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Gold/Mining/Energy : Shale Natural Gas, Oil and NGLs and ESA -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (1484)	9/3/2009 3:00:49 PM
From: jrhana	1 Recommendation Read Replies (1) \| Respond to of 6160

Questerre shale reserve equivalent to 1B barrels calgaryherald.com Estimate 66% higher than thought By Shaun Polczer, Calgary HeraldSeptember 2, 2009 Quebec's St. Lawrence Lowlands could hold as much as eight trillion cubic feet(tcf)of natural gas trapped in shale rock, Calgary-based Questerre Energy said Tuesday. The tiny company released the big numbers after an independent reserve engineer said the company's Utica discovery could hold a range of 2.2 tcf to eight tcf, with a best estimate of recoverable reserves pegged at 4.3 tcf--equivalent to almost a billion barrels of oil. It was the first time Questerre has released detailed estimates of the discovery, which is being developed in partnership with Talisman Energy Inc., and the numbers are about 66 per cent higher than previous estimates. "We are very pleased the report confirms the significance of our discovery in Quebec," said company president Michael Binnion. "The independent estimates are materially higher than past industry figures, which we believe reflects the additional data, technical work and advancement on the learning curve." On Monday, Questerre announced that its latest Quebec well tested at 2.6 million cubic feet per day and that it would spud its first horizontal shale well this fall. Full-scale development could follow a commercial pilot program. Utica joins other major deposits such as Horn River in British Columbia and the Marcellus and Haynesville shales in the United States that have dramatically altered the natural gas supply picture. According to the U. S. government's Energy Information Agency, new drilling technology has unlocked a 99-year supply of potential gas reserves. Mike Dawson, president of the Canadian Society for Unconventional Gas, said the natural gas industry is approaching a "new dawn," thanks in part to the shale plays, but said it remains to be seen if the initial optimism will bear out. "This is a pretty positive sign," he said in reaction to Questerre's results. "However, there's not enough production history to say if we'll have these hyperbolic production curves everybody is talking about." All the surplus gas has pushed gas futures to multiyear lows as storage inventories fill to record levels. Gas prices lost another five per cent in New York on Tuesday, falling 16 cents to close at $2.82 US. According to a report by FirstEnergy analyst Martin King, prices are expected to head lower this fall before gradually recovering in winter. "We expect that a bottom for natural gas prices will be put in place in the next few weeks as the market comes to grips with storage sites that are effectively full in many parts of North America, resulting in a backing up of supply and a final plunge in prices," he wrote. "Picking the exact day is impossible, of course." But Dawson said the natural gas industry would eventually come to grips with the new economic reality as it relates to supply and demand fundamentals. He said the "oversupply" situation is an opportunity for countries like Canada to reduce carbon emissions by converting vehicles to run on gas and switching electrical power generation from dirty coal to the cleaner-burning fuel. "The gas industry has been very, very good at developing technology on the supply side, but it hasn't been very good at looking at the demand side," he said. "Clearly, there's a world of opportunity to look at alternative uses for natural gas that we haven't even thought of." spolczer@theherald. canwest.com © Copyright (c) The Calgary Herald