Montney Part 2: The Full Montney
Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy.
The evolution of the Montney has varied significantly between Alberta and BC. A good comparison of these provinces would be a long distance runner vs a sprinter. Alberta’s production has been quite steady since 1996, with slight deviations from its average production of 263 mmcf/day (peaking at 406 mmcf/day in Aug 2010). BC however has come out of the gate like a sprinter, averaging an 80% increase in production year over year since 2006. BC production rates surpassed Alberta for the first time in Feb 2009 and continued to grow to 3.5 times that of Alberta in May 2011. However, Alberta is ahead in terms of the total gas produced to date in the Montney, accounting for 69.4% of the 2,456 bcf of cumulative gas produced. So, if both provinces were to sustain the May 2011 rates how long would it take for BC to surpass Alberta in terms of cumulative Montney production? The answer is September 2014.
The big game changer in all of this is horizontal drilling technology. The 801 horizontal wells account for 89.6% of current production rates. 70% of the horizontal wells currently producing are in BC. The number of producing horizontal wells has had an average increase of 221% since 2007. Will 2011 numbers keep up with this pace?
So let’s take a look at the full Montney in a series of charts…
The Growth of Horizontal Wells
May 2011 production summary:
801 horizontal wells producing 1306 mmcf/day (89.6% of production)
455 vertical wells producing 87 mmcf/day (6.6% of production)
266 deviated wells producing 60 mmcf/day (4.1% of production)
26 crooked wells producing 5 mmcf/day (0.3% of production)
The first Montney wells came on stream in July 1977 in Alberta. The most pronounced jump in production (in Alberta) started in November 1995 growing to 274 mmcf/day a year later. Total Montney production has grown to 1457 mmcf/day in May 2011.
- Total number of Montney wells that have produced = 2261 (excludes commingled wells)
- 89% of that production came on stream since Sept 2008
- First horizontal wells came on stream in Sept 2001 in Alberta
- 70% of the horizontal wells are in BC
- 21% of current (May 2011) Montney gas production came on stream in 2011
- 62% of current (May 2011) Montney gas production came on stream since Jan 2010
- Biggest growth in Production was in 2010, contributing 635 mmcf/day by Dec 2010
- Total BC Production in May 2011 (884 wells) = 1130 mmcf/day (78%)
- Total AB Production May 2011 (778 wells) = 327 mmcf/day (22%)
The chart above shows a comparison of production and producing well count in AB and BC. Alberta’s well count has grown steadily since 1996 while sustaining a fairly constant production rate. BC’s well count and production have both grown rapidly since 2006. I superimposed the Henry Hub and Intra AB gas prices on this chart for your references (courtesy of GLJ). A collegue said this to me today, “There are a lot of factors driving Montney drilling over the last several years, including changes in Alberta royalties, drive to prove up reserves at any price … price of gas is only 1 factor, but obviously an important one.”
- Cumulative Montney gas produced to date = 2,456 bcf
- Cumulative Alberta Montney gas produced to date = 1,704 bcf (69.4% of total)
- Cumulative BC Montney gas produced to date = 752 bcf (30.6% of total)
Stay tuned over the next week or two for more on the Montney. As always we welcome your feedback and suggestions about what you would like to see in upcoming blogs.
Disclaimer of Analysis Results
It is important to note when doing any of this kind of analysis that the selection of wells be scrutinized for meaningful results. The results presented are intended to fuel your understanding of VISAGE capabililties with gDC data. We would be happy to run analyses for specific well lists that you may have. Please feel free to contact us.
Data Disclaimer: gDC is the data source for the information presented in this blog post. If you see issues with the data or have concerns about the well list used for this posting please contact us.