Stratas Advisors is a Hart Energy company.

The Cardium Formation has traditionally been developed using conventional drilling and completions techniques. Pembina Field, the largest onshore field in Canada, has been a producing conventional oil field since the 1950s. Conventional Cardium production continued to increase until it reached a peak of 200,000 barrels of oil equivalent per day (boe/d) in the early 1970s. Production then began to steadily decline until it reached a nadir of 50,000 boe/d in 2008.

In the latter portion of 2008, the unconventional development of the Cardium began in earnest. Since 2008, development has spread radially outward from the center of Pembina Field to reach the peripheral areas of the formation that were once deemed uneconomic.

Horizontal well counts also have increased, from seven in 2008 to 673 in 2013. The continual rise in the annual horizontal well count helps to quantify the resurgence of drilling and completion activity and the revival of the Cardium Formation. While the 2013 total well count appears to be less than in 2012, this is due to a one-year lag in reporting requirements rather than a decline in drilling activity. It appears that the 2013 number will be adjusted higher than the count for 2012, and 2014 will continue the upward trend.

The accompanying figure displays several data points. First, the average true vertical depth (TVD), measured depth (MD), and implied lateral length (horizontal) of a composite well on an annual basis is displayed on the vertical left axis of the graph. Operators, on average, are targeting the Cardium at roughly the same depth. The greatest difference in the wells on an annual basis is the average measured depth and the implied lateral length. From 2009 onward there is an average annual increase of 570 feet in the measured depth and an average annual increase of 470 feet in the implied lateral length. Operators continue to extend lateral lengths to access greater volumes of Cardium reservoir.

Shown are the average true vertical depth, measured depth and implied lateral length of a composite well alongside the 30-year EUR of a well coming on production during the time period.

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