Alberta Bakken : the Next Big Play
Alberta Bakken generates buzz as the 'next big play'
Alberta Bakken generates buzz as the 'next big play'
By Gary Lamphier, Edmonton Journal December 9, 2010 10:42 AM
If you've never heard of the Alberta Bakken light oil play, you're not alone.
Although it has gotten some attention in industry publications, it has yet to make a big splash in the mainstream media.
Beyond the usual army of penny stock speculators and a handful of energy analysts, few people outside of Alberta's tightly knit oilpatch are tracking it.
Keith Schaefer, editor and publisher of the Oil & Gas Investments Bulletin -- and a big believer in the Alberta Bakken's potential -- recently dubbed it the "stealth play" of the year.
Unlike Saskatchewan's prolific Bakken play -- an extension of the Williston Basin, which extends into North Dakota and Montana and ranks as North America's largest onshore oil find in decades -- the Alberta Bakken has yet to produce any oil.
"Some big companies on both sides of the 49th parallel have spent millions buying thousands of acres of land -- with almost no well data," Schaefer wrote in a commentary last month.
"This flurry of activity says the industry is convinced the Alberta Bakken could be North America's next big play."
Maybe they're right. Or maybe not. In reality, it's just too early to say, asserts Brian Kristjansen, an energy analyst with Canaccord Genuity in Calgary.
"I'd say the Alberta Bakken is fairly well-known (among industry geologists), but it's extremely undeveloped. There's basically no real data out there in terms of well productivity," he says.
"There are 14 wells that are drilling or being completed that I'm aware of, involving companies like Crescent Point, Rosetta Resources, Newfield Exploration, Primary Petroleum, Bowood Energy, DeeThree Exploration, Argosy Energy and Murphy Oil. And this week we've seen Legacy Oil & Gas entering a farm-in deal with Bowood Energy."
Global energy giant Royal Dutch Shell has also reportedly begun a drilling program in the area.
Still, if one considers the 1,000-plus wells drilled in Saskatchewan's Bakken over the past five years, where reserve estimates have ballooned to roughly five billion barrels of oil, it's clear that the saga of the Alberta Bakken is still in its infancy.
Even so, Kristjansen says producers believe the innovative horizontal multistage fracturing technology that opened up Saskatchewan's Bakken to early players like Mission Oil & Gas -- then led by Trent Yanko, who sold out to Crescent Point in 2007 and formed Legacy last year -- will also unlock the riches of the Alberta Bakken.
"It's a black shale formation with the same depositional geological time sequence as the Williston Basin. It's highly oil-saturated and the expectations are that it could be a Bakken analogue, which is why they're calling it the Alberta Bakken. It's like a twin," he says.
Schaefer, citing recent reports on the Alberta Bakken by analysts at BMO Nesbitt Burns, Macquarie Securities and Haywood Securities, says prospects for rapid production growth look promising. "(They) have all acknowledged that the Alberta Bakken is a deep, overpressured formation. This leads them to believe that the deliverability (economics) may be superior to the main (Saskatchewan) Bakken play in Viewfield, but lower than the North Dakota Bakken," he says.
"Like most horizontal, multi-fracked wells in the Bakken, it is assumed that the initial flow rates of the Alberta Bakken will be high, with high decline rates and a relatively large total amount of oil recovered."
The momentum behind the Alberta Bakken only shifted into high gear in September, when Crescent Point -- the biggest player in Saskatchewan's Bakken -- disclosed that it had assembled more than one million net acres of undeveloped land south of Lethbridge that it regards as prospective for light oil.
At the time, CEO Scott Saxberg said the play could have a huge impact on Crescent Point's output. "We have the potential to more than double our company, if it hits. The area is so massive, and if it truly is similar to the Saskatchewan Bakken, then it's pretty significant."
Crescent Point acquired the bulk of the land from financially troubled, privately owned Darian Exploration for $96 million.
"There are lots of rumours on the street about what their wells have actually done. There have been photos sent around of their well flares, trying to judge how big the oil well is, based on the flare. So there's just a real vacuum of information right now. But I'm sure any positive information that comes out will float all boats immediately."