The Energy Resources Conservation Board (“ERCB”) of Alberta has ordered 158 natural gas wells which produce approximately 33 million cubic feet of gas per day, to be shut down pending a full investigation expected early next year. The board says continued production from the wells, about 100 kilometres northwest of Fort McMurray, could put future oil sands projects at risk. The ERCB order, which is effective Oct. 31, affects wells licensed to Canadian Natural Resources Ltd (CNQ.TO), EnCana Corp (ECA.TO) and Paramount Energy Trust (PMT_u.TO).
According to the ERCB press release:
“Gas production from these wells may lead to a risk to bitumen recovery. The geological strata at issue contain natural gas that is in contact with potentially recoverable bitumen.”
The decision comes as a result of applications by Sunshine Oilsands Ltd and French oil major Total SA (TOTF.PA).
The ERCB has ordered similar shut-ins before stating the value of the oil sands to the province of Alberta is higher then the value of natural gas. Back in 2004, the ERCB ordered 835 wells which were producing ~123 million cubic feet per day shut down after similar debates between natural gas producers and oil sands producers.
ERCB Press Release: ERCB Issues Interim Bitumen Conservation Decision
I would hope that 835 wells producing only 123,000 cubic feet would be shut down for economic reasons. That is only an average of 147 cubic feet a day per well.
Should be 123 mmcf… or 123 million cubic feet per day. Thanks for the catch Bill. Its been corrected.