The Grande Prairie area accounted for approximately 7 percent of Trilogy’s production and 12 percent of the capital expenditures in 2010 and will continue to receive a similar amount of capital in 2011. Production from the Grande Prairie area declined from 1,943 Boe/d in 2009 to 1,668 Boe/d in 2010. Trilogy has been impacted by the tight control on the existing infrastructure that has been exercised by the larger operators in the area. Trilogy continues to be challenged by limited access to non-operated facilities; however, Trilogy is focusing its capital spending in the Wembley area and on the Montney and Doig developing plays in the Valhalla area, where it believes a critical mass can be developed to justify expansion of the existing infrastructure in 2011.
Trilogy’s 2010 capital spending in the Grande Prairie area totaled $22.2 million for the year. Trilogy participated in the drilling of 10 (4.7 net) wells resulting in 4 (2.3 net) gas wells and 6 (2.4 net) oil wells. Of these wells, 7 (2.3 net) were drilled horizontally and 3 (2.4 net) vertically.
Trilogy remains optimistic regarding the future development of the Grande Prairie area and believes that its growing prospect inventory and land base will provide significant opportunity for future development using horizontal drilling and completion techniques on the tight oil and gas reservoirs in the area. Trilogy has budgeted capital to participate in the drilling of a number of vertical and horizontal wells in the Grande Prairie area to further develop liquids-rich gas and oil plays in the Montney, Doig, Nikanassin and Doe Creek formations in 2011.