A new study has identified immense oil and gas resources in Alberta's emerging shale prospects, suggesting a string of recent takeovers and land buys will yield impressive production gains for some of the world's largest oil companies.
The Western Canadian province's shale formations, including the Duvernay, Montney and Muskwa, could contain 3,324 trillion cubic feet of natural gas, 58.6 billion barrels of gas liquids and 423.6 billion barrels of oil, Reuters reported, citing research conducted by the Alberta Energy Resources Conservation Board and Alberta Geological Survey.
The numbers show Alberta, already Canada's largest oil and gas producing province, has huge potential even beyond its oil sands. They are currently seen as the world's third-largest crude deposit with about 170 billion barrels of proven reserves and ultimate potential of as much as 1.7 trillion barrels.
The Duvernay and Montney have been the targets of a boom in energy deal-making, with companies such as Encana, Chevron and Talisman amassing land positions to unlock its liquids-rich reserves.
Last month, Exxon Mobil agreed to buy Celtic Exploration for C$2.6 billion ($2.6 billion), locking up its reserves in both the Duvernay and Montney.
The companies have had success in accessing the previously tough-to-tap oil and reserves with horizontal drilling and hydraulic fracturing technology that had been developed in large scale for use in shale gas formations in the United States and Canada.
According to the ERCB/AGS study, the Duvernay, a formation that cuts across much of north-central Alberta, contains 443 trillion cubic feet of total gas in place, 11.3 billion barrels of natural gas liquids and 61.7 billion barrels of oil, at the midpoint of the estimates.
The Muskwa, located in Northwestern Alberta, has an estimated 419 trillion cubic feet of gas, 14.8 billion barrels of gas liquids and 115.1 billion barrels of oil.
The Montney, in Western Alberta, is also a major exploration area in neighboring British Columbia. On the Alberta side, natural gas resources are estimated at 2,211 trillion cubic feet, gas liquids at 28.9 billion barrels and oil at 136.3 billion barrels.
Others, including the Basal Banff/Exshaw, North Nordegg and Wilrich formations, have preliminary estimates.
The authors cautioned that the numbers represent "endowment of hydrocarbons" and that geological and engineering constraints as well as economic, social and environmental considerations will ultimately determine the volumes that will be recovered.