Trilogy has been active in the emerging Duvernay shale play for approximately two years. Since its initial involvement in the play, Trilogy has participated in the drilling of ten horizontal Duvernay wells and three vertical stratigraphic test wells. In 2012, Trilogy spent approximately $57 million to drill 7 (3.4 net) wells targeting the Duvernay and plans to spend approximately $75 million in 2013 to drill an additional 8 (5.6 net) wells. Trilogy has accumulated approximately 200 net sections of land on the play and will be managing the land base as the play develops.
Results to date on the play have been encouraging, however further delineation is required to determine well productivity and liquids yield which are ultimately needed to determine the economic potential of the play. Once drilling, completion and production best practices have been determined to maximize recoverable reserves per well, the industry will be in a better position to drive down costs to ensure the maximum rate of return is achieved.
The Trilogy-operated well at 3-13-60-20W5, drilled on the joint venture block with Celtic Exploration Ltd. and Yoho Resources Inc, has produced approximately 0.8 Bcf of natural gas and 75 MBbl of condensate in approximately 18 months. This well was drilled in 2010 to test the production potential of the Duvernay shale in the gas condensate window, and has proven the shale play to be viable. The 3-13 well was a starting point for maximizing production and reserve potential of the Duvernay shale reservoir. Trilogy believes that the industry has made significant progress in delineating the liquids yield in the Duvernay and the next step will be to determine the best completion practices to maximize gas and liquids production in each area.
In 2012, Trilogy drilled 3 (2.5 net) Duvernay wells on expiring acreage in the Kaybob area. Each of these wells was drilled with intermediate casing and approximately one mile horizontal laterals completed using a ball drop system. Results from the first well, 4-3-64-21W5, were encouraging, however only 10 of the planned 30 stages were successfully fracture stimulated. Based on the results from this completion Trilogy was able to adjust the fracture stimulation program to successfully fracture stimulate the second and third wells at 5-3-60-19W5 and 5-8-62-18W5.
Based on the partial success of the 4-3-64-21W5 well, Trilogy proceeded with the drilling of two additional wells in this area during the first quarter of 2013 at 4-11-64-22W5 and 4-15-64-21W5. Trilogy plans to utilize a plug and perforation technique to complete these wells, to increase the number of fracture intervals along the horizontal and maximize the ability to clean the well bore out in the event of completion issues. These completion operations are expected to take place during the first and second quarters of 2013.