Producers pile into Alberta oil play with green appeal
November 1st 2023
A hot spot for Canadian oil drillers is emerging in a tiny corner of eastern Alberta, drawing companies including Canadian Natural Resources Ltd. and Baytex Energy Corp. in search of cheaper, lower-emissions heavy crude.
Oil drillers have applied for 81 licences to drill into the so-called Waseca formation so far this year, 30 more than in all of 2022. That’s the biggest increase in any oil and gas formation in the province this year, according to regulatory data.
The formation holds heavy oil about 400 metres beneath the soil near the oilsands region of Cold Lake. But, unlike the oilsands, the Waseca can be tapped with conventional drilling gear that costs less and generates lower emissions because steam isn’t needed to make the crude flow.
While the oilsands can require billions of dollars of upfront investment and years to establish production, a conventional heavyoil well can be brought online in a few months at a fraction of the cost. They’re also more environmentally friendly than the oilsands, which produce some of the highest carbon emissions in the world per barrel.
“It’s much cheaper oil to extract, which is why companies are attracted to it,” Jonah Resnick, a Calgary-based research analyst for Wood Mackenzie, said by phone.
The Waseca is similar to the Clearwater formation, also in Alberta, which has been the most heavily drilled play in the province for the past several years. Unlike Clearwater, Waseca is in its early days, Resnick said. A total of 69 wells have been drilled there so far this year in the formation versus 62 in all of last year and just 12 in 2021, Alberta Energy Regulator (AER) data show. Production from the formation totalled just over 5,000 barrels a day in August.
Canadian Natural Resources has been the most active, drilling 64 wells since the start of 2021, AER data show.
Credits to National Post, Robert Tuttle
nationalpost.com
Photo Credit to ARMBRUSTERBIZ
pixabay.com
Oil drillers have applied for 81 licences to drill into the so-called Waseca formation so far this year, 30 more than in all of 2022. That’s the biggest increase in any oil and gas formation in the province this year, according to regulatory data.
The formation holds heavy oil about 400 metres beneath the soil near the oilsands region of Cold Lake. But, unlike the oilsands, the Waseca can be tapped with conventional drilling gear that costs less and generates lower emissions because steam isn’t needed to make the crude flow.
While the oilsands can require billions of dollars of upfront investment and years to establish production, a conventional heavyoil well can be brought online in a few months at a fraction of the cost. They’re also more environmentally friendly than the oilsands, which produce some of the highest carbon emissions in the world per barrel.
“It’s much cheaper oil to extract, which is why companies are attracted to it,” Jonah Resnick, a Calgary-based research analyst for Wood Mackenzie, said by phone.
The Waseca is similar to the Clearwater formation, also in Alberta, which has been the most heavily drilled play in the province for the past several years. Unlike Clearwater, Waseca is in its early days, Resnick said. A total of 69 wells have been drilled there so far this year in the formation versus 62 in all of last year and just 12 in 2021, Alberta Energy Regulator (AER) data show. Production from the formation totalled just over 5,000 barrels a day in August.
Canadian Natural Resources has been the most active, drilling 64 wells since the start of 2021, AER data show.
Credits to National Post, Robert Tuttle
nationalpost.com
Photo Credit to ARMBRUSTERBIZ
pixabay.com
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