One hundred kilometres south of Grande Prairie, you will find one of the hottest shale plays in North America: the Kakwa Montney. The play is home to one of the fastest growing Canadian O&G companies, Seven Generations. As discussed in a recent BOE Report article, Seven Generations has been one of a few companies that has continued to grow in spite of low commodity prices.
Exploration in the Kakwa area started in the 1950s, but it wouldn’t be until the 1980s when companies began producing in the area. The Montney in Kakwa was rarely tested due to its depth of 3,000m and there were many conventional zones up-hole. Some of the early vertical wells drilled in the Montney did hint at the potential of the field. For example, 100/07-28-063-05W6/00 was a vertical well drilled in 1997 and by 2015 it had produced close to 1 bcf (billion cubic feet) and 250,000 bbl (barrel) of oil. The full potential of the Montney would only be revealed through horizontal drilling and multi-stage fracturing.
Table 1- Drilling activity by Company in Kakwa Montney between 2013 to Present using BOE Report’s Activity Tracker
|SEVEN GENERATIONS ENERGY||166|
|XTO ENERGY INC||5|
|HUSKY OIL OPERATIONS||2|
Since 2013, Seven Generations has been the most active driller of the Kakwa Montney. They have drilled 166 of 309 wells, or 53% of all Kakwa Montney wells during this period according to the BOE Report Activity Tracker. Their most active competitor was Paramount, who drilled 86 wells in Kakwa. Seven Generations recently grew its presence in the play by acquiring Paramount Resources assets in Kakwa.
How strongly are these wells performing? We reviewed the Kakwa Montney wells based on cumulative gas produced in the year 2015. The interactive chart below allows you to look through the wells and compare production rates. All top 10 performing Kakwa Montney wells for 2015 were Seven Generations wells. The top well was 102/16-19-063-04W6 , which averaged 6.5 mmcf/day (million cubic feet equivalent per day) over the 2015 calendar year, cumulating 2.37 bcf. The top 20 wells for the Kakwa field can be found by clicking on this Petro Ninja List.
To demonstrate the performance of these Kakwa Montney wells, consider the impact of the top performing well can have on the industry. The peak production rate of 102/16-19-063-04W6 was 9.9 mmcf/d (averaged over a month). This is greater than the combined rate of all 1,400 active gas wells in Ontario, which produce 9 mmcf/d.   In 2015, the same well produced enough gas to power nearly 100,000 Albertan homes for one year. 
Both of those comparisons simplify the story. Kakwa Montney wells are rich with natural gas liquids, or condensate. Seven Generations uses an average condensate gas ratio (CGR) of 118 bbl/mmcf over the first year in their economic models. Using that CGR for 102/16-19-063-04W6’s would indicate about 280,000 bbl of condensate in 2015.  That’s the real economic driver in these wells.
Petro Ninja is a free O&G mapping application with well and production data for Alberta, B.C., and Saskatchewan. Register for a free account to view production data, well data, and directions to well sites.
Note 1 – Reference from National Energy Board
Note 2 – The gas volumes reported in Western Canada are raw gas, which include non-combustible components like nitrogen and hydrogen sulfide.
Note 3 – Conservatively assuming the gas is dry with a heating value of 1,032 BTU/scf.
Note 4 – Condensate is not always allocated back to the well. The gas volume that is recorded includes the condensate in gas phase. The condensate is later split out at a processing plant.
Submitted by Petro Niche Technology Ltd. with assistance from Alexander Cook.