Considerations for Reserves Recovery Within the Heritage Montney Play, British Columbia

SPE#-149201-PP

Kelly Okuszko, P.Eng.Mark Hayes, P. Geo.

PURPOSE

Study Focus: Report on Heritage Montney reservoir &

completion data to support technical learning and encourage best practices

data available online

Challenge: Grouping analogous wells to make “Apples to

Apples” comparisons

Lack of flowing pressure data to analyze true deliverability on rate restricted wells

Fort St John

Dawson CreekChetwynd

Hudson’s Hope

Heritage Field

543,434 hectares

As of June 2011:669 producing wells,1.3 bcf/d

2005-052006-022006-112007-082008-052009-022009-112010-080.227.3817.8235294114.5526315812.0157894711.510526326.7058823539.421428571

37.9193548428.212518.73516.8857142913.3606060614.01818182

56.0551724144.4061538529.6175675722.4957142920.39714286

72.9588235359.4841121536.2601307231.0835443

9.963.5291139260.34509804

0

20

40

60

80

100

120Well Performance by spud year – all wells

2010 2009 2008 2007 2006 2005

Avg

Daily

rate

e3m

3/d

2006

20072008

2009

2010

HZ drilling, multi-stage fracs

Future improvements to learning curve ?

Vertical drilling

2005

Heritage Montney AMajor Operator areas

As of March 201112 Operators

Grouping the Data: “Apples to Apples” Comparisons

Sub Areas(localized reservoir quality)

Well Placement(Upper/Middle/Lower)

On Production Year(technical learning & technology)

Completion Technique(cased/openhole, frac fluid, HZ length)

Sub Areas within the Heritage Montney A Play

54 wells

224 wells

11 wells

31 wells

85 wells

30 wells

59 wells

46 wells

DAWSONSWANSUNRISE PARKLANDSUNDOWNGROUNDBIRCH

Upper Montney

Lower Montney

Well Placement: Upper Montney Isopach

Thin <75 m

Thick >200 m

Thin <50 m

25m contours

Well Placement: Lower Montney Isopach

Thin < 75m

Thick > 275m

25m contours

Swan

Sundown

Heritage Condensate

Trend

Septimus

Sunrise

Sub Areas: HZ Well Typecurve

Sub Areas within the Heritage Montney Play

0 1000 2000 3000 4000 5000 6000 70000

1

2

3

4

5

6

7

Swan Upper MontneyBy On Prodn Year

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

2007 (29 wells) CO2 7 fracs, 848m3 wtr, 673T sand

2008 (24 wells) N2 8 fracs (↑),1312m3 wtr (↑), 822T sand (↑)

2009 (32 wells) N2 8 fracs,1112m3 wtr (↓), 763T sand (↓)

2010 (6 wells) N2 11 fracs (↑), 1807m3 wtr (↑), 1108T sand (↑)

Swan – Montney Reservoir Comparison c-3-Hc-56-A

Blue – Upper Montney wellsPurple – Lower Montney wells

Upper Montney

Lower Montney

c-3-H

c-56-A

0 1000 2000 3000 4000 5000 60000

1

2

3

4

5

6

7

Swan Lower MontneyBy On Prodn Year

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

2007 (7 wells) CO2, 7 fracs

2008 (18 wells) CO2, 8 fracs (↑)

2009 (43 wells), CO2, 7 fracs (↓), 50% OH

2010 (47 wells), 60% CO2, 40% N2 or Slickwater, 9 fracs (↑), 90% OH

2011 (15 wells), 60% CO2/N2, 40% CO2, 9 fracs, 60% OH

0 200 400 600 800 1000 1200 1400 16000

1

2

3

4

5

6

7

8

9

10

2011 Lower MontneySWAN

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

MURPHY 2010 (19 wells)

CO2 (70%)

9 fracs, 2676m completed, 1559m3 wtr, 70% OH ENCANA 2010 (27 wells)

Mix of CO2, N2, slickwater10 fracs, 1590m completed, 4165m3 wtr, 96% OH

ENCANA 2011 (7 wells)

CO2

12 fracs, 1641m completed, 2494m3 wtr, 40% OH

MURPHY 2011 (8 wells)

CO2 /N2

8 fracs, 2676m completed, 1199m3 wtr, 70% OH

0 100 200 300 400 500 600 700 8000

1

2

3

4

5

6

7

8

9

10

2011 Lower MontneySwan & Sundown

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

SWAN - CO2/N2 (8 wells)

8 fracs, 2676m completed, 1199m3 wtr

SUNDOWN - CO2/N2 (8 wells) 13 fracs, 1525m completed (↓), 1114m3 wtr

SUNDOWN - CO2 (13 wells)

SUNDOWN - Slickwater (4 wells)

0 500 1000 1500 2000 2500 30000

2

4

6

8

10

Dawson Upper MontneyBy On Prodn Year

2007

2008

2009

2010

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

2007: 5 fracs, 1196m completed, 1298m3 wtr, 617T sand, 604m3 CO2, 2m3/min

2009: Bigger CO2 Fracs, Higher Pump Rate 10 fracs(↑), 1606m completed(↑), 1578m3 wtr(↑), 960T sand(↑), 1246m3 CO2(↑), 6m3/min(↑)

↑rate restricted

0 1000 2000 3000 4000 5000 60000

1

2

3

4

5

6

7

8

Sunrise Upper MontneyBy On Prodn Year

2008

2009

2010

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

New operators - learning curve and infrastructure

0 200 400 600 800 1000 1200 1400 1600 18000

1

2

3

4

5

6

Sunrise Upper Montney2010 - By Operator

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

TOURMALINE (6 wells)

ENCANA (17 wells)

SHELL (19 wells)

HURON (4 wells) More water & sand, Higher pump rateSmaller completed interval

All slickwater, except ENCANA N2

0 200 400 600 800 1000 1200 14000

1

2

3

4

5

6

7

8

Septimus Upper MontneyBy On Prodn Year

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

2008 (8 wells) 50% CO2, rest N2, CO2/N2 or slickwater

2009 (7 wells)

60% N2 (CNRL), 40% slickwater (Crew)

2010 (17 wells)

100% slickwater

0 200 400 600 800 1000 12000

1

2

3

4

5

6

7

8

Septimus Upper Montney2010

Cumulative Gas Production (MMscf)

Op

Gas R

ate

(MM

scfd

)

CREW(6 wells) 5 fracs, 1268m completed, 4952m3 wtr, 1020T sand, 10.7m3/min

CNRL (10 wells) 9 fracs, 1564m completed, 6582m3 wtr, 963T sand,10m3/min

Both slickwaterCNRL –↑ fracs, ↑ water, ↑ HZ

Observations

Frac ≠ Frac ≠ Frac

Reservoir trumps completion

Notable improvement in gas recovery:

2010 Slickwater fracs (CNRL)Upper Montney at Septimus

2011 Binary CO2/N2 fracs (Murphy)Lower Montney at Swan & Sundown

More to come?

OPEN FOR STUDY

Heritage Montney Completions Database available online:http://www.bcogc.ca/industryzone/forms/resourceconservation.aspx

Electronic submission of frac reports coming soon !

ACKNOWLEDGEMENTS

BC Oil & Gas Commission Mark Hayes – Co-author, Petroleum Geologist Travis Mercure – Engineering Analysis Verna Kazakoff – Completions Analysis Richard Slocomb & Ron Stefik – Engineering Guidance

Fekete Associates Inc. Harmony Software – generating typecurves

Canadian Discovery Ltd. Frac Database – detailed frac data including costs

Operators in Heritage Montney – Excel completions dataCNRLMurphyCrewEnCanaShell TourmalineHuronStormARC

Considerations for Reserves Recovery Within the Heritage Montney Play, British Columbia

More Information:

Kelly Okuszko, P. Eng Mark Hayes, P.

Geo

BC Oil and Gas Commission

250-419-4433 250-419-4431

www.bcogc.ca Kelly.Okuszko@bcogc.ca Mark.Hayes@bcogc.ca

Nov. 2011