Transeuro Energy Corp. - Canada - Shale Gas in British Columbia

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Shale Gas in British Columbia

Substantial evidence exists to suggest that the shallow shows at Beaver River are in fact due to the presence of a substantial shale gas reservoir. The pursuit of shale gas fields in northeast British Columbia has seen a huge increase in activity during 2007, particularly in the Horn River basin, located just to the East of Beaver River. The same Muskwa shales there are present in Beaver River as the deeper of the 3 potential horizons and are the target of the A5 workover in September 2008. While shale gas resources are not much in production in Canada, this non-conventional reservoir is being successfully developed in a number of areas of the USA, including the Barnett shale in Texas and the Lewis shale in California. Transeuro is currently at the leading edge of this technology in Canada and is able to produce the wells as the export pipeline is located on the lease.

The reservoirs are being characterised by Transeuro as an 'enhanced' shale gas prospect as the presence of sand and clays in the shale increases the porosity to the range of 4-7%, somewhat higher than conventional shale gas plays, thereby allowing for a greater gas saturation. Additionally, the field is located in the foothills of the Rockies, in a region of historically high rock stresses that have generated a high density of natural fractures in the shales. These natural fractures are essential in shale reservoirs to increase the overall permeability in the rock that allows the gas to flow towards the wells. The higher density of fractures suggests that the wells will flow at a higher rate and will drain a larger area around the wellbore. Overall cumulative recovery of gas in place should also be enhanced.