Eight early insights into next year's Montney spending

Image: Seven Generations Energy

As oil and gas producers wind down the reports of their operating and financial results for the third quarter of 2016, we take a look at some of the early announcements for expected capital spending in the Northeast B.C./Northwest Alberta resource play next year.

  1. Seven Generations Energy plans to spend up to $1.6 billion in 2017, targeting a 50 percent increase in its Montney production. The spend will include operating an average nine rigs and drilling about 100 wells in its core Nest 2 area in the Alberta Montney.
  2. This is an increase from Seven Generations’ capital spending in 2016, which is expected to come in at between $1.05 billion and $1.1 billion.The 2017 capital program will also include engineering and partial construction of the company’s third natural gas processing plant at the north end of the Kakwa field.
  3. Tourmaline Oil is planning $1.35 billion in capital spending in 2017, which includes development work on the properties it recently acquired from Shell Canada.Tourmaline plans to operate a 17-rig program next year, up from 12 rigs previously.The capital spend includes drilling of 300 wells (gross), completion of the Doe BC 2-11 gas plant, completion of the Spirit River 3-10 gas plant expansion, compressor expansion at the Wild River 14-20 gas plant and construction of the new Sundown pipeline lateral. Approximately 45 of the 300 planned wells in 2017 will be on the Shell Canada assets, the company says.
  4. ARC Resources says its planned $665-million capital spend in 2017 is focused on keeping its core Montney areas at or near capacity, in a program weighted to crude oil and liquids-rich natural gas development. The company plans to drill 79 wells across its Montney portfolio next year; 59 in Northeast B.C. and 20 in Northwest Alberta. ARC’s capital spend will also include about $175 million on gas processing and liquids handling, completing a new facility at Dawson, and proceeding with plans for a facility expansion at Parkland/Tower.
  5. Painted Pony plans a capital program of approximately $319 million in 2017, which includes the acceleration of construction of a 100 mmcf/d expansion at the AltaGas Townsend processing facility that was originally expected to occur in 2018. Painted Pony plans to drill and complete 61 net wells on its Montney acreage next year.
  6. Paramount Resources plans to drill up to 24 and complete up to twelve two-mile Montney wells at Karr-Gold Creek by mid-2017, with the first of the new wells scheduled to be brought on production in the first quarter of 2017.Capital costs to drill, complete and equip these wells are expected to average approximately $10.5 million.
  7. Kelt Exploration has announced an initial capital expenditure budget of $134 million for 2017, which includes drilling 16.5 net Montney wells.However, the company expects to complete 24.3 net wells next year, as there are estimated to be 7.8 net drilled but un-completed wells from 2016.Kelt plans to commence development pad drilling and continue delineation testing on its Montney assets next year.
  8. Delphi Energy recently announced a $40-million Montney joint drilling program with an unnamed “existing working interest industry partner” to speed up development in its liquids-rich natural gas play at Bigstone in northwestern Alberta.The deal, which is expected to be completed before the end of 2016, would see the drilling of 5-6 wells before July 15, 2017.
  9. Chinook Energy plans a first quarter 2017 capital program of $9.7 million to complete and tie-in three new Montney wells that are expected to be drilled by the end of 2016.

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