Dec. 7 (UPI) -- Australian energy company Calima Energy said it built up its holding in a shale formation in British Columbia by 4 percent through a government auction.
Through the latest government land auction, the company said it increased its holdings in the Montney shale formation by 2,738 acres, or about 4 percent.
"The company now holds interests in 70,645 acres of drilling rights over acreage that is prospective for the Montney formation," the company said in a statement.
The shale bed straddles the provincial borders of British Columbia and Alberta and Calima's position was secured in a northwest section of the reservoir. A joint provincial and national study from 2013, the first of its kind, found the shale basin holds at least 449 trillion cubic feet of marketable natural gas and 1.1 billion barrels of marketable oil.
Targeted in the 1950s, the Montney shale was relatively untouched until advances in hydraulic fracturing and horizontal drilling made exploitation more feasible starting in 2005.
From a cash flow perspective, Calima said the Montney shale has one of the most competitive break-even costs in North America. In an independent assessment of the reservoir in October, the company said Montney would deliver "excellent returns at current prices."
Last year, the Canadian subsidiary of Royal Dutch Shell, trimmed down after a merger with British energy company BG Group, shed some of its assets in the country for $1 billion. All told, Shell said the acreage was producing about 24,850 barrels of oil equivalents per day
For Calima, the grab is part of a broader strategy to build up its position in Western Canada.
"This most recent acreage award moves us close to completion of our acreage acquisition strategy," Managing Director Alan Stein said in a statement.