According to a new report by business intelligence expert GlobalData, operators have been making significant investments in competing for valuable areas in Canada’s Montney shale play. Decreasing conventional resources in North America and the increased focus on developing unconventional resources have contributed to the increase in production in the region in recent years and the Montney shale area is currently attracting the majority of unconventional development in Canada.
Previously overlooked due to low reserve levels in the play and low natural gas prices, the Montney shale play is expected to attract greater numbers of investments as drilling activity increases as a result of the Alberta government’s reduction in royalty rates.
With the efforts being made by oil and gas operators to strengthen production portfolios and reserves, the unconventional resources in Canada are attracting many mergers, acquisitions and asset transaction deals to the country such as Petronas’s acquisition of a 50% working interest in Progress Energy Resources for an estimated US1,103.8m last year. Over 25 major operators are currently operating in the area.
Natural gas production in the Montney shale play began in 2006 with an approximate production of 6.94billion cubic feet of natural gas through the 46 issued drilling permits. Throughout 2006-2010 production increased at an average growth rate of 61.3% to 80.4bcf from 159 wells. The play produced a record of 98.3bcf of natural gas between January-October 2011.