Crescent Point buys big stake in Alberta’s East Shale Duvernay

CALGARY — A little-known light oil shale play in central Alberta is getting plenty of attention after Crescent Point Energy Corp. quietly amassed a total of 142,000 hectares of drilling rights there.

The Calgary-based company said it spent about $112 million to build its position as one of the largest landholders in the East Shale Duvernay play (a group of oil fields).

It said it added property through a series of transactions over the past year after entering the play by buying Legacy Oil + Gas Inc. in 2015.

“This play is real and it’s meaningful in scale to us with over 500 sections of land,” said CEO Scott Saxberg in an interview Wednesday.

“We’re pretty excited about the future of that play, with positive results to come.”

He said the East Shale Duvernay could grow to rival Crescent Point’s production from Saskatchewan, where it is the province’s largest oil producer, as well as its fast-growing oil operations in Utah.

Crescent Point’s entry into the play has likely tied up most of the available remaining land, said Bruce Baynon, president of Raging River Exploration Inc., which is considered the second-largest landholder with 100,000 hectares of drilling rights.

Raging River has drilled four wells in the play and expects to drill three more this year, he said.

The Alberta Geological Survey estimated in a report last year that the Duvernay formation, which underlies most of central Alberta, contains about 820 trillion cubic feet of natural gas, 95 billion barrels of natural gas liquids and 208 billion barrels of oil, though not all of that can be recovered.

The northern two-thirds of the play is better known and has attracted most of the attention from drillers, said geologist Brad Hayes, president of Calgary-based Petrel Robertson Consulting.