Plains Belly River & Edmonton Group
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The Plains Belly River play is an under pressured, essentially water-free, multi-sand zone that averages 450 metres in thickness and totals over 900 metres including the overlying Edmonton, sand, coal Group. Compton has over one hundred low risk development locations surveyed and licensed in this area. The entire section is comprised of multiple Belly River sands, silts, shales, and coals, overlain by the Edmonton/Horseshoe Canyon coals that similarly include sands, silts, and shales. With control of 1,190 sections of land at an average 90% working interest, this land base translates to a significant multi‑year, low risk drilling inventory at four wells per section.
In 2008 Compton drilled 160 gross Belly River development wells. At year-end, we were producing 45 MMcf/d from 750 wells. We currently have ample infrastructure in the area for future production increases with 32,500 horsepower of compression and approximately 1,300 kilometres of pipeline.
In 2009, Compton will focus on optimizing existing pipeline systems and compressors, while initiating workovers, licensing additional drilling locations and undertaking re-completions on select wells. We will be focused on reducing operating costs wherever possible in order to improve the economics of this play in the current low commodity price environment. The Alberta Crown royalty changes made effective Jan 1, 2009, are expected to have a positive impact on this type of shallow gas play as royalties are reduced from 15% to as low as 5%.
Once gas prices improve, we can commence infill drilling to fill existing compression. On a go forward basis, Compton anticipates that the majority of its lands will be developed at the government approved spacing of four wells per section on this shallow low risk gas play.
