The Montney dominates the Canadian oil and gas landscape due to its size and superior economics. Although not a true shale play, the Montney shares reservoir characteristics with some of the prominent plays in the Lower 48. The Canadian play is productive across all fluid windows much like the Eagle Ford Formation in the Gulf Coast Basin, and the Montney has multiple productive zones similar to the stacked zone potential of the Delaware and Midland basins of West Texas and New Mexico. Similar to operators in plays in the Lower 48, Montney operators have been experiencing well failures within parent-child well relationships. Understanding the cause of these well failures is vital to optimizing completion techniques to maximize resource recovery. This has become extremely topical for both operators and investors because as the Montney and shale plays in the Lower 48 move further into development, evaluations will become more dependent on operations over the resource assessment.
While the Lower 48 has been the focus of most drilling activity in recent years (i.e., Midland, Delaware, Anadarko and Appalachian basins), increased drilling rates and improved completion designs have helped make the Montney one of the cheapest plays in North America to drill and complete on a lateral foot basis. Despite challenging market conditions, Montney operators have demonstrated resiliency and innovation, evident in the play's competitive breakevens shown in Figure 1, arguably making it some of the cheapest gas in North America.
This study evaluates the different factors that keep the Montney competitive to peer plays in the Lower 48: completion designs, well costs and productivity. In our analysis, proppant intensity has the greatest correlation to well performance and therefore was the primary focus. While the trend of increasing proppant intensity has been made evident in both the Montney and Lower 48 plays, operators have also noticed an increase in well interference and frac hits.
