Tight gas refers to natural gas in underground reservoirs with low permeability. A generally accepted industry definition is reservoirs that do not produce economic volumes of natural gas without assistance from massive stimulation treatments or special recovery processes and technologies, such as horizontal wells. Low permeability is primarily due to the fine-grained nature of the sediments, compaction, or infilling of pore spaces by carbonate or silicate cements. Our tight gas resource play features a variety of properties in northern British Columbia and the foothills of Alberta and B.C. where these reservoirs are typically found.

In 2009 at Tommy Lakes we completed a 13-well program spending about $30 million. Approximately $40 million was invested to acquire 29 net sections of prospective land and on seismic and assessment drilling activities in the Deep Basin region of Alberta and B.C. targeting the Montney, Nordegg, and Manville formations.

Given the current outlook for natural gas prices, we are not planning a development program at Tommy Lakes in 2010. We have plans to drill a number of assessment wells along with some seismic work on our newly acquired lands targetting formations with potential for multi-frac horizontal drilling.

Key Statistics:

• 2010 expected production: 85,200 Mcf/day (17% of total production)
• 2010 development capital plan: $56 million, 7 net wells
• 17% of proved plus probable reserves
• Reserve life index of 11.1 years

For further information on all of our resource plays, click here.

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