There is a lot of buzz about the Duvernay Shale Basin.

The potential for a multibillion-dollar liquid gas development southwest of Whitecourt is causing a lot of excitement in Alberta oil and gas circles, and many big-name companies are already on the ground with exploratory wells in various stages of completion.

So, why should Whitecourt care?

The Duvernay Shale Basin is in this town’s back yard and, if successful, will very likely make Whitecourt a boomtown.

Brad Herald of the Canadian Association of Petroleum Producers (CAPP) spoke with the Star about the area’s potential and what it might mean for Whitecourt.

“It’s a big play,” Herald said.

A play is an industry term used to describe an area where oil and gas can potentially be found and extracted.

The Duvernay Shale Basin encompasses a vast swath of land southwest of Whitecourt, encompassing the town of Edson and extends southwest of Edmonton.

The basin is known to be rich in liquid gas, which can also contain other marketable gases such as propane, ethane and butane, all of which can be processed and sold separately.

This adds up to a very profitable mix for both resource companies and surrounding towns.

“You get more money than you would for just natural gas, which has been quite low recently,” Herald explained.

Another important aspect to the play is the high potential for diluent production.

Oil produced from northern Alberta oil sands are very thick and require diluent to help it flow easily through pipelines.

Herald says diluent that could potentially be produced from the basin makes it an extremely sought after commodity.

Exploration is already underway according to Herald, with several dozen companies currently operating in the play.

Herald said that some of the major companies in the area include Shell, Encana, Talisman, Chevron and Canadian Natural Resources Limited (CNRL).

Exploration, he says, helps companies in the area perfect their techniques due to the unconventional nature of the field, which has a higher net overall cost at the onset of production.

“Our understanding of it is increasing with every well that goes down” Herald said. “It really is a multibillion dollar opportunity, if it proves up.”

Herald said it is too early to know for sure if the play will be as productive as people hope, and if the money being put into exploration and early production will pay off.

“Our goal, as we move into the 2013-2014 winter season, and probably next, is to bring those per-well costs down, perfect the completion techniques and that gets your production up, so the wells become more economical,” Herald said.

If the play proves to be profitable, Herald sees Whitecourt as being the main regional hub for the industry.

“Those wells are, on the low end, probably $12-13 million to $20-22 million,” Herald said. “The completions crews are big and there will be gas processing, which will have permanent employment.”

He said Whitecourt could see a spike in demand for drilling and construction, which could trickle down to the rest of the economy.

“Once you see that kind of pulse of economic activity you see uplift on your service industries and hotels.”

Herald also suggested that production in the area could be long term.

“It’s not like a shallow gas well that is up and down in three years,” Herald said, suggesting that production wells could remain productive for many years to come.

Early assessments suggest that Duvernay will have a high initial production and then tail off, but remain viable for several decades.

While these assessments are indeed optimistic, Whitecourt residents may not want to max out their credit just yet.

Herald cautioned that even though indicators do indeed look favourable, companies do not yet have the comfort level to move forward into full development.

“It hasn’t quite plateaued where we have the comfort from the companies that are drilling it that it will move into a full development scenario,” he said. “But it’s looking very, very good.”

Herald said the companies currently working on exploration in the play will make decisions on whether or not to go ahead with full development within in the next two years.

celia.ste.croix@sunmedia.ca

On Twitter: @WhitecourtStar