As of Dec. 31, 2016, British Columbia’s remaining raw gas reserves were 52.5 tcf, a 1.2 per cent decrease from the 2015 remaining reserves.

The decrease in reserves occurred due to a natural decline and as a result of a significant drop in the number of wells drilled in 2016 from the previous year (353, compared to 531). This was highlighted in the B.C. Oil and Gas Commission (OGC) reserves report released on Friday.


Well drilling activity was concentrated in the Montney. Of the 353 wells drilled in 2016, 94.5 per cent were drilled in the Montney. The remaining 5.5 per cent of wells drilled in 2016 include Liard Basin (five wells) and others.

As of Dec. 31, 2016, the remaining gas reserves for the Montney are 29.8 tcf (raw), which represents a 1.8 per cent recovery of the total basin GIP of the Montney resource estimate.


The top operators in the Heritage field by production (Encana Corporation, Royal Dutch Shell plc and ARC Resources Ltd.) differ from those in the Northern Montney (Progress Energy Canada Ltd., Painted Pony Energy Ltd. and Storm Resources Inc.). Operators focus within specific areas to optimize on operating, infrastructure and facility costs, the OGC stated. Production for most operators increased significantly in 2016, supported by improved completion techniques and new facilities.


Liard Basin

Exploration in the Liard Basin started in 2008. Initial raw gas reserves are 0.1 tcf based on production from six existing non-confidential wells (two vertical and four horizontal wells). A total of five wells were drilled in 2016 in the Laird Basin.

The Exshaw-Patry shales within the B.C. portion of the Liard Basin, while depositionally similar, are significantly deeper, ranging from 3.5 to five kilometres depth, than the productive shales of the adjacent Horn River Basin. Net pay ranges from 30 metres near the Liard Basin's eastern edge to over 250 metres in the basin interior. The reservoir pressure is at approximately double the value of normal hydrostatic pressure gradient. The brittle nature of the siliceous shales allows them to be effectively stimulated by hydraulic fracturing which, combined with the elevated reservoir pressure, yields high initial gas production rates.

The pay zone depth and remote location have resulted in high costs which has limited activity in the current low gas price environment.

The fracture stimulations performed in 2015 and 2016, using flow-through bridge plug technology, resulted in the highest initial production rates to-date in the field. The well b-B3-K/94-O-12 (WA 29747) commenced production in December 2015 at an initial rate of 56 mmcf/d. A year later the well was producing at a rate of 25 mmcf/d.

Horn River Basin

Production from the Horn River Basin was 280 mmcf/d in December 2016, down five per cent from the previous year (December 2015). Operators continued to shut-in wells no longer economic to produce (27 and seven wells were shut in throughout 2015 and 2016, respectively). No new wells were completed in 2016 as activity slowed in the area. Continued production without new drilling resulted in a decrease in remaining recoverable reserves from the previous year.

Cordova Basin

Development activity in the Cordova Basin ceased in 2016 as there were no new wells drilled.

Oil

Oil remaining reserves decreased 6.3 per cent in 2016 for total remaining reserves of 103.7 million bbls. This reserves drop is due to a combination of increased production, reserves revisions and lack of new discoveries.