celtic exploration’s core focus is in the Kaybob
region of west central alberta.
After high school, Wilson went straight to the rigs. Then he
returned to get an education as a petroleum technologist at
the Southern Alberta Institute of Technology. He worked for
three years as completions engineer for Computalog, which
eventually was swept up into Weatherford, before striking out
on his own to form a private oil and gas company. In 1993, he
started Genesis Exploration, sold it in 2001 for $898 million, and
launched Celtic in 2002.
So how does a junior with 75 per cent of its production in gas
manage to grow 20 to 30 per cent a year at a time of economic
chaos and floundering gas prices?
“The majority of our program is in Kaybob, where we’re getting very good liquid yields,” Wilson explains. “That’s propane and
butane and, more importantly, condensate. So even though you
have low gas pricing, we’re getting good revenue from the liquids.”
To get a sense of just how much liquids volume these assets
yield, Wilson draws a comparison to the Montney, where a well
with reserves of 2. 5 billion cubic feet produces about 70,000
barrels of liquids, whereas a three-billion-cubic-foot Bluesky
well in the Kaybob field yields almost 140,000 barrels of liquids.
“And 140,000 barrels is about as good as an average Cardium
oil well, and we’re getting the gas for free [in the Bluesky well],”
Wilson says.
Initially, Celtic went into Kaybob chasing gas, since it had a
fantastic hedged gas price, but the liquids grew in importance
later as gas prices tanked and the hedges expired.
Then, during the slowdown last year, Celtic took advantage of
its strong balance sheet and became very active at Crown land
sales, buying up a lot of land in and around Kaybob.
“We were tying up lands 50 to 150 miles to the west and
north,” he says. “We’re taking the same play type that we’re
working in the Montney, the Bluesky, and Notikewin and just
moved it a little farther out. It’s the same porosity, the same
permeability, same liquid yields, and, in most cases, the same
pressures and depths, just that nobody’s looking for it there.
With the same ingredients and same cook, we should get the
same results.”
This year is a bit of a breakout in these new areas, where
Celtic will drill nine exploration wells–exploration for lack
of better word, because Celtic is relatively sure the resource
is there; it’s more a matter of productivity and avoiding
operational problems.
