Nexen Inc. (NXY) - Horn River Basin Update

By Andrea: http://oilshalegas.com

During the third quarter, Nexen Inc.(NXY) completed a 144 frac program on their eight-well pad in the Horn River at an industry-leading pace of 3.5 fracs per day with a 100% frac success rate. Earlier this year, they completed their drilling campaign here at an average rate of under 25 days per well. Compared to their previous program, these wells were drilled in 35% fewer days and were 80% longer. They recently started production testing these wells and expect to reach peak production rates of 50 mmcf/d this winter. They plan to follow up this successful program with a nine well pad that would start drilling this winter. The wells would be fraced and completed next summer with first production in the fourth quarter of 2011. This allows them to advance their Horn River play while they progress their plans for an 18-well pad to be drilled next winter with first production expected in late 2012.

"Our performance in the Horn River continues to be top quartile with the successful execution of our drilling and frac strategies. This type of execution will lead to higher returns on this business," commented Romanow. "This play is expected to earn a ten percent rate of return with gas prices at US$4/mcf."

Nexen has approximately 90,000 acres at Dilly Creek in the Horn River basin. As previously announced, their Dilly Creek lands contain between 3 and 6 trillion cubic feet (0.5 to 1.0 billion barrels of oil equivalent) of recoverable contingent resource, assuming a 20% recovery factor. Following their success at a June land sale, they now have over 300,000 acres of highly prospective shale gas lands in the Horn River, Cordova and Liard basins in northeast British Columbia.

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Penn West Energy and Mitsubishi Corp. - Horn River Shale Update

By Andrea: http://oilshalegas.com

Penn West Energy Trust (PWE) and Mitsubishi Corp. (MC) recently announced that they will enter into a joint venture to develop Penn West's Horn River Shale assets. This will be a 50-50 joint venture and involves 30 million cubic feet per day of natural gas sitting on 550,000 net acres of land. Press release below:

Penn West Energy Trust (PWE) is pleased to announce it has entered into an agreement with a wholly owned subsidiary of Mitsubishi Corporation (MC), forming a 50-50 joint venture to develop Penn West's shale gas assets in the Cordova Embayment area and certain of its conventional gas assets in the Wildboy area of northeastern British Columbia. Penn West will serve as operator of the Assets.

Strategic Rationale
Since 2006, Penn West has accumulated a significant shale gas position in the Cordova Embayment. Penn West's initial drilling results in the area have been promising and we have expanded the size of our land base. It is Penn West's view that the Joint Venture will accelerate the exploration and development of this significant unconventional gas asset. The Joint Venture supports our corporate strategy, which recognizes the importance of maintaining a balanced exploration and development portfolio as we assess and develop the full potential of our diverse resource plays. This Agreement is the foundation for a long-term relationship with MC, who has world-wide experience in major project development.

Cordova Joint Venture
As part of the Agreement, MC will commit approximately $850 million to the Joint Venture. Under the terms of the Agreement, Penn West will sell MC 50% of its working interest in its Wildboy conventional gas assets including current production of approximately 30 million cubic feet per day of natural gas, 550,000 gross acres of land including approximately 120,000 acres targeting shale gas in the Cordova Embayment, the Wildboy gas processing facility, a sales gas pipeline connecting the area to the TransCanada gathering system in Alberta, and associated infrastructure.

At closing, MC will pay Penn West approximately $250 million in consideration for the existing assets and additionally will fund approximately $600 million of the first $800 million of exploration and development capital expenditures in the Joint Venture.

Closing
The closing of the transaction and the formation of the Joint Venture is expected to occur on or about September 23, 2010, subject to MC's final board approval at a meeting to be held in September 2010, the receipt of regulatory approvals and the satisfaction of customary closing conditions.

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Horn River Shale - Nexen ( NXY ) Canada Shale Update

This morning, Nexen ( NXY ) has come out with earnings and updated investors on their Horn River Shale.

Following the success of last winter's drilling program in the Horn River basin in northeast British Columbia, we decided to drill two horizontal wells this summer. The wells have been drilled and are being fraced. The results from these wells will be taken into consideration as we plan our upcoming winter program for the area.This shale gas play has the potential to become one of the most significant shale gas plays in North America. It has been compared to the Barnett Shale in Texas by other operators in the area as it displays similar rock properties and play characteristics.
We have approximately 88,000 acres in the Dilly Creek area of the Horn River basin with a 100% working interest. As previously announced, we estimate these lands contain between 3 and 6 trillion cubic feet (0.5 to 1.0 billion barrels of oil equivalent) of recoverable contingent resource which could double our total proved reserves. Further appraisal activity is required before these estimates can be finalized and commerciality established.

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Haynesville Shale: Encana ( ECA ) 10/23/08 - Operational Update

Encana ( ECA ) has come out with their earnings report as well as their operational report including the Haynesville Shale and Horn River Shale. Operating earnings up 40 percent to $1.92 per share or $1.4 billion

Haynesville Shale: In the third quarter of 2008, we strengthened our position in the Haynesville gas resource play by acquiring 25,000 net acres, increasing ourland position to about 400,000 net acres, plus 63,000 net acres of mineral rights. We continue to see great potential in this promising shale play,"Eresman said. "EnCana, along with our partner, Shell Exploration & Production,has an industry-leading land position in this area of Louisiana. We currently have six rigs running with a focus on cost reduction and completion optimization. We will target drilling and completing the first well in themid-Bossier shale in the fourth quarter.

Horn River Shale: At HornRiver in British Columbia, EnCana and partner Apache Corporation have completed seven wells this year, with one of our most recent wells delivering encouraging results, flowing for the first 30 days at an average of almost8 MMcf/d."

Montney Shale: In northeast British Columbia and northwestern Alberta, our already strong land position in the Montney play hasexpanded to more than 700,000 acres. With that, EnCana has the largest disclosed land base in this emerging unconventional gas field.

USA Shale Plays - Canada Natural Gas Fields

Below is a link to all the major shale gas fields in the United States and Canada. The Haynesville Shale has most of the shale buzz, but Horn River Shale could be just as large one day!


http://www.haynesvilleshales.com/shalefields.html

Also check out:

www.bakkenshale.net
www.marcellusshales.com
www.oilshalegas.com

Montney Shale - British Columbia Natural Gas Field

The Montney Shale is attracting bids for land by large companies. Located just below the Horn River Shale in British Columbia....energy giants such as Encana are scopping up land like we are running out of natural gas.

A record 610 million dollars of land leases were made at an auction in July.

Stay tuned to see how much the August auction raises! If you thought the Haynesville Shale was hot....Canada has their own shale plays!

Horn River Shale bigger then Haynesville Shale & Barnett?

Is the Horn River Basin Shale in B.C, Canada bigger then the Haynesville Shale in Louisiana & the Barnett Shale in Texas?

The Horn River Shale located in the North East section of British Columbia, Canada is the newest and possibly the biggest shale play in North America to hit the stage. Not to many people know about this shale as they do about many of the other American Shales.

Geologists estimate the Horn River Shale could hold 250 trillion cubic feet of Natural Gas reserves. Only 10-20% would be recoverable leaving this shale play with the potential to hold 25-50 TCF's of natural gas.

Recently Wood Mackenzie, a research firm, also back up the figure above.

For more on the Horn River Gas Shale and companies involved in drilling operations.....go to this site.

http://www.oilshalegas.com/hornrivershalebasin.html