It's been a brutal last few years for the oil and gas industry in Alberta, but there have been some positive news stories of late, including a decision by OPEC to boost prices by curbing production and the Canadian Government's approval of three pipeline projects.
How will this affect exploration and production in the Drumheller area? We asked Doug McIntyre, a communications officer for Encana, which started to cut back on its central Alberta assets about two years ago.
"At this point, we continue working existing working interests in the area, however our primary focus continues to be on four core assets that are really the centre of our portfolio," he told 99.5 Drum FM. "Those are the Montney, which straddles northeastern BC and northwestern Alberta; the Duvernay in west central Alberta; and the Eagle Ford and the Permian, which are both down in Texas."
Encana sold most of its properties in the Clearwater Basin of south central Alberta to Ember Resources in 2014, although it still owns title to more than one million acres, including close to half a million in east Wheatland County.
"We recently announced a five year plan based on a flat $55 (per barrel) oil price and $3 (per cubic foot) natural gas price," noted McIntyre. "It's really not a prediction of prices, but more consistent with the strategy we rolled out some three years ago. We've built a business that we feel is not dependent on a price recovery to succeed."
"By the end of 2020-21 we expect around half our production would be liquids, the majority (of it) crude and condensate, and total production would be up around 60 per cent over that five year time," he continued. "2017 is going to be a critical year to increase investment in our four core assets and it's the beginning of our five year plan so we plan to hit the ground running."
The fall forecast of the Oil and Gas Quarterly Update says natural gas production, particularly from shale, will continue to rise in 2017 as the industry starts to recover from one of the worst recessions in Alberta history.