The Duvernay – Reincarnation of the Leduc and Nisku Play

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With the price of natural gas (NG) at an all-time low and oil exceeding historical levels, are the economics there to have another look at the Devonian reef?  Has modern technology allowed the Leduc and Nisku source rock (Duvernay) to be produced with an acceptable level of payback and profit? The Nisku and Leduc formations had provided many prolific oil and gas wells in years gone by, so why no further development?

Step forward a few years...

  • Restrained gas prices, yet high oil prices

  • Horizontal drilling

  • Multi-stage fracturing

Fortunate operators with land holdings in the Kaybob area, are in a win-win situation in today’s market. Development of the Duvernay is both feasible and economically viable, providing short term payback. A quick description of the Duvernay, will outline why this formation is an ideal candidate to develop. An abbreviated description of the Duvernay includes:

  • An organic-rich, massive to laminated, calcareous shale

  • Mature source rock, in the condensate- rich gas zone

  • High kerogen, due to limited oxygen and lack of grazing organisms

  • Abundant detrital quartz and calcite sized grains, with minor feldspar and dolomite grains

  • Inter-granular porosity is filled with organic material, clays, and carbonate and silica cement

  • Not fluid sensitive

  • Good porosity (avg. 7.5%), and permeability (1.86E-02 mD)

What does this all mean?

  • Organic, hot spots easily identified with a spectral gamma ray; for optimizing fracs

  • Brittleness, ideally suitable to fracturing

  • Not fluid sensitive to water; simple frac proppants can be utilized

  • A prolific source of natural gas and condensate

  • Gas can be re-injected to enhance condensate recovery

The Duvernay looks good on paper, however, has it lived up to its expectations? Despite the difficulties in reaching its depth, and then going horizontal, initial evaluation indicates that the Duvernay in the Kaybob area, contains 120 BCF/section of free gas, and 14 BCF/section of absorbed gas, for a total of 134 BCF/section of gas in place.

The condensate is now getting a 10% premium over light oil, and has a fast growing local market, being used to dilute the heavy oil from the oilsands. This brings it up to pipeline specification, so that it can flow into a conduit system.

The Duvernay looks to be the next big play in the Western Canadian Basin, currently generating premium dollars for its condensate, and having substantial natural gas available for re-injection?, conversion to LNG (liquid natural gas)?, or natural gas (NG) as pricing returns. With potential from eight other producible zones in the Kaybob field, why would any operator with land within the liquids rich area, not consider Duvernay wells.

What are three points to back up your recommendation?

Consider the following information released by Celtic Exploration Ltd., on their Joint Venture well with Trilogy Energy Corp., and Yoho Resources Inc.:

  • 7.5 million cubic feet per day of gas

  • 75 barrels of liquid condensates and 56° API oil for every million cubic feet of gas

  • Total of 1,250 barrels of oil equivalent per day

With production numbers, and calculated reserves from Logs as noted; the Duvernay should play an important part in the Western Canadian Oil Industry for years to come.