Gas Exploration And Development Strategies In the Western Canada Sedimentary Basin

Abstract

Abstract The Western Canadian Sedimentary Basin (WCSB) is a major source of natural gas supply for the North American market, with year 2000 basin productivity at more than 450 e6m3/d (16 Bcfd). Significant natural decline requires that in excess of 84 e6m3/d (3 Bcfd) of new supply must be added each year simply to maintain constant basin deliverability. In addition, the average rate added per well continues decreasing and the initial decline rate increasing. During the decade of the 1990s, over 700 e6m3/d (25 Bcfd) of new western Canadian gas deliverability was added, from over 42,000 new producing well events. Based on the year of pool discovery and the year that the area was first connected to the delivery system, there are four definable strategies. Each of the four strategies (Exploration, Connection, Development, and Renewal) contributed a significant amount of gas rate additions. What role will exploration and development strategies play in future gas supply? This paper provides an illustration of the trends in gas supply additions over the last decade, including a view of the geographic distribution, as well as other attributes. There is also a comparison of the portfolios of E&D strategies that operators employed. A brief synopsis of the methodology being followed to determine a consistent measurement of gas rate-additions is also presented. Careful analysis of the historical results has yielded useful insights for operators as they make their choices about future activities. Introduction The Western Canadian Sedimentary Basin (WCSB) is a critically important source of natural gas supply for Canada and the United States. In the year 2000, the WCSB produced over 23% of the gas consumed in these nations. Gas supply from the WCSB has increased substantially over the past decade. From a level of 225 e6m3/d (8 Bcfd) in the mid- 1980s, marketable natural gas deliveries increased to over 450 E6m3/d (16 Bcfd) in 2000. To achieve this growth in production, and compensate for the natural decline in production from existing wells, operators in Western Canada added significant new deliverability. Over 42,000 gas wells were brought onstream during the 1990s, contributing, in aggregate, 703 e6m3/d (25.1 Bcfd) in rate additions. Supply replacement in the WCSB will be a challenge as natural decline creates a large gap in productivity each year. At 1999 production levels and decline rates, 93 e6m3/d (3.3 Bcfd) must be added yearly simply to replace decline. The production gap is growing larger each year because the total decline rate is increasing. The average decline rate has risen from 17 - 18% per year in the early 1990s to over 26% per year at the end of the decade. The increase in the decline rate was basin-wide and was observed to increase in all sources of new gas supply (by strategy employed, by geographic region, by stratigraphic group, and by reservoir depth). In addition, the supply contribution of the average new well to fill the production gap has been decreasing.