Yesterday I took my students to tour the EOG site at Max Hamish in the Horn River Basin.
Right now they have no active drilling happening and they were stacking up these oak planks that get laid out like a massive blanket for the heavy equipment to drive over and put stuff on during drilling activity in the non-frozen times of year. From what I understand they really do prefer everything to be frozen as the heavy equipment doesn't sink into the mud that way. And, they have had to shut operations early a couple times since I have moved north due to things warming up faster then expected.
There were 4 new wells at the site, which each are estimated to give off 8 million cf of natural gas each. Over the life of the well the gas flow rate will decline, but they expect to get gas out of the wells for about 15 years and have plans to put 12 more wells in when the market price for natural gas improves.
I learned more about the fracking process. I thought it was breaking up the rock quite a bit more then it does. It really just puts cracks into the rocks to allow a passage for the gas to escape.
They have a camp that sleeps 279 workers at the site. Right now it is fairly empty, and stacking up those oak planks is definitely a sign of a slow down. They have no plans to drill this next year. I suppose that means the roads will feel safer this winter with less trucks on them.
Water is huge to these sites. It requires 40,000 cubic meters of water to frack the wells and only half the water is recovered. This site wasn't bad in that they were able to access water within a couple kilometers. A worker I was chatting with on my drive back this summer was telling me about the one frac where they built about 100 kilometers of piping to access water. That is actually fairly big business in that the pipes, or hoses are laid out, and then taken apart and rolled back up. When we were driving back from Spectra last week there was about 20 kilometers of hosing that had been rolled and tied up waiting to be picked up by a truck. I am not sure which site was using that hose.
They do a very simple cleaning of the gas before they compress it to ship it through the pipeline to Spectra, who then process it for the open market. They mostly just compress it to squeeze most of the water out of the gas before shipping,. I am not sure if they dehydrate all the gas before shipping, or if the dehydrating process was just for the natural gas they use in the base.
Normally there is about 3 trillion cubic feet of gas being stored in North America. Currently there is over 5 trillion cubic feet being stored, hence the price is way down as there is a massive supply out there right now.
I haven't had time to look at or dig through the financial reports of EOG, or any gas company, but I think this is the stage that squeezes out the weak players as natural gas prices are so low. Some companies also have hedges at much higher prices, so I think one needs to be careful to figure out what the actual prices the companies are getting for their gas and whether they are strong enough to ride out a couple years of bad prices.