Discoveries

Calgary-based explorer Talisman Energy Inc. is embarking on a major shift in strategy. At a recent investor day, the company said that it planned to spend up to C$420 million on pilots in five unconventional plays, four in Canada and one in the U.S.

It is focused on multi-zone Outer Foothills reservoirs in Alberta and British Columbia, Montney gas in B.C., Bakken light oil in southern Saskatchewan, Utica/Lorraince shales in Quebec and Marcellus shale in New York.

The latter play was of particular interest to me. Talisman is the #1 producer of gas in New York State, and has been successful in the Trenton-Black River hydrothermal dolomite play around the Finger Lakes region. Now much of that same acreage is prospective for Marcellus. The company has 800,000 gross (640,000 net) acres of lands in New York and northern Pennsylvania.

Since 2006, the company has drilled 13 vertical Marcellus wells. Results have been encouraging: its most recent vertical well tested at an average rate of 800,000 cubic feet per day. Talisman thinks that it will likely develop the Marcellus with horizontal wells, however. 

A significant horizontal Marcellus test will be completed in the second quarter, and Talisman’s first operated horizontal well will be completed in the third quarter. It expects to have drilled four vertical and 20 horizontal wells in five pilot areas in New York by year-end 2009. 

The company reported original gas in place values of 20 to 100 billion cubic feet per section. It is assuming well costs of $4.3 million and estimated ultimate recoveries of 2 to 3 Bcfe per well.

by Peggy Williams, Senior Exploration Editor, Oil and Gas Investor

Contact me at pwilliams@hartenergy.com

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