Well spudding marks beginning of Canadian shale oil venture

ASX-listed oil and gas explorer and producer Petsec Energy has announced the spudding of its initial commitment well in its shale oil project in Alberta, Canada.
The well is targeting a depth of 2700m and drilling is expected to take six weeks. Results will be extensively evaluated within a three to four month period.
To earn a 24.5 per cent working interest in leases covering 17,280 acres, Petsec will pay 35 per cent of the cost of the initial well and potentially contribute 35 per cent of expenditure toward the drilling of up to three optional wells.
Petsec’s net cost for the initial well has been estimated at US$0.7 million. Private companies will fund the remaining 65 per cent of costs.
Petsec announced its participation in the project in mid-February and originally planned to spud the well before the end of that month.
“This is a significant step in the company’s transition to securing and developing unconventional oil assets,” Petsec chairman Terry Fern said in a statement. “Success in the initial drilling is expected to result in the acquisition of further acreage
within the play which holds the potential for a sizeable shale oil project.”
The project lies in the Western Canadian Sedimentary Basin, which contains one of the world’s largest reserves of petroleum and natural gas. According to Petsec, its production had exceeded 13.7 billion barrels of oil and 47 trillion cubic feet of
natural gas since the first discovery was made in the basin in 1883. As Canada’s largest hydrocarbon producing province, the Western Canadian Sedimentary Basin has been reported to account for about 90 per cent of the oil and gas produced in the country.

 

By Danica Newnham

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