Apache, the second-largest U.S. independent oil and natural gas producer by market value, says the find in the Liard Basin in northeast British Columbia contains enough gas to match Canada's entire current output for almost a decade.
Apache estimates the Liard to contain 210 trillion cubic feet of natural gas, 48 trillion cubic feet of which is "sales gas" for production and sale.
That compares with 5.3 trillion cubic feet produced by western Canada in 2011, and a BP PLC report released this week showing proved gas reserves in the United States totaling 300 trillion cubic feet and a total of 70 trillion cubic feet in Canada.
"This is enormous," Gordon Currie, senior oil and gas analyst at Salman Partners told the Vancouver Sun newspaper. "Those are big, big numbers."
Based on Apache's estimates, Currie said, the Liard should provide British Columbia with enough gas to export "for many, many years to come."
Apache is one of three partners in the proposed $4.5 billion Kitimat LNG pipeline and terminal 643 miles north of Vancouver that would connect natural gas from Canada to LNG markets in the Asia Pacific region.
Apache began exploring the shale gas play in 2007 and has since secured about 430,000 acres of land in the Liard, The Globe and Mail newspaper reports.
The well, when drilled in 2009, produced 21 million cubic feet of gas per day during its first month, requiring only six fracks -- the hydraulic fracking technique used to free shale gas -- compared to 18 fracks or more usually needed for gas to flow.
G. Steven Farris, Apache's chairman and chief executive officer in announcing the Liard Thursday at the company's annual investor day, called it "one of the best shale wells we've seen in any play."
"Our analysis indicates that the formation characteristics are remarkably consistent across this large basin," Farris said.
The Liard, however, poses some challenges for Apache. Because of its remote location, it will require substantial infrastructure and Apache is likely to face opposition from First Nations groups.
"It really seems to be the challenges are stakeholder-involved," said Robert Fitzmartyn, managing director of institutional research with FirstEnergy Capital Corp., in Calgary.
In announcing resource estimates for Liard and other plays including the Anadarko Basin in western Oklahoma and the Texas Panhandle, Farris said, "For Apache, this is the time to drill more wells."
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