The increasingly busy Montney play that straddles the northern Alberta-B.C. border is the only area in Canada where tight oil production is increasing, according to data released last week by the National Energy Board (NEB).
The Montney has been compared to the booming Permian Basin play in Texas due to its stacked resource potential, prolific wells, relatively low costs and ongoing improvement potential through technology development.
“The Montney Formation was the only formation that had its production grow since 2014, from 60,000 bbls/d to 95,000 bbls/d. This was largely due to increased production of condensate, which is considered a form of oil,” the NEB reports.
“Montney condensate is obtained from tight gas wells and sells for a higher price than crude oil in western Canada because it is in high demand as a diluent that allows bitumen to be shipped by pipeline.”
Overall, thanks to low oil prices since mid-2014, Canadian tight oil production decreased from a peak of about 425,000 bbls/d to about 345,000 bbls/d at the end of 2016, the NEB said.
“The main reductions came from the Cardium Formation of Alberta, which fell from 85,000 bbls/d to 50,000 bbls/d, and the Bakken Formation of Saskatchewan and Manitoba, which decreased from about 60,000 bbls/d to 40,000 bbls/d.”
The drop in production is a direct result of fewer wells being drilled, as in tight oil new wells must continually be added to balance out high decline rates.