While the Fort Worth Barnett, Woodford and Fayetteville shales may well be headed toward an aggregate daily production level of 4- to 5 billion cubic feet in just a matter of a few years-assuming $6-plus gas prices-the Canadian Maritimes could be the next hot shale trend in North America.
This is the view of Irene Haas, Houston-based E&P research analyst for investment banker Canaccord Adams.
While her initial focus for the next big shale play in various basins around the world had originally been in Western Canada, she now believes the Canadian Maritimes could be ahead of the pack as the hot new shale play.
The analyst reports that in New Brunswick and Nova Scotia, Corridor Resources Inc. (Toronto: CDH) and Triangle Petroleum (OTCBB: TPLM) are doing cutting-edge work, in terms of drilling new wells to test the concept of Mississippian-age shale gas on prospective acreage that's close to the Maritimes and Northwest Pipeline.
In late September, Corridor successfully placed three small fracs in the Frederick Brook shale at the McNully F-58 in New Brunswick. The well flowed at a rate of 0.32 million cubic feet equivalent per day.
Across the Bay of Fundy in Nova Scotia, Triangle Petroleum recently completed the first well of its two-well program in the Kennetcook Basin and should have test results at year-end 2007.Says Haas, "In both basins, we believe that it is possible to find multiple trillion cubic feet of gas in place, but these plays are still in the incubation stage and more wells are needed to prove these play concepts."
The analyst finds the Canadian Maritimes area intriguing for two reasons: First, its proximity to the U.S. East Coast, the largest consumer of natural gas; second, the attractive royalty regimes.She notes the Maritimes and Northeast Pipeline was built in 1999 to transport gas from offshore developments in Nova Scotia to Massachusetts, where it connects with Algonguin Gas Transmission's Hubline and the North American pipeline grid.
The current capacity of the pipeline is 420 million cubic feet per day in the U.S. and 530 million per day in Canada, with an expansion of the U.S. portion now under way.
Concludes Haas, "We expect very interesting and crucial news from both producers [Corridor and Triangle.
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