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Jim Letourneau's Blog

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Utica Shale Gas Players - Needing News to Move

Utica Shale gas players have been getting more attention as drilling results from Forest Oil (FST) and Talisman (TLM) will be released soon. Estimates of the size of this unconventional play range from 2-69 TCF (trillion cubic feet).

Here are comments from Michael Binnion, Questerre's (QEC.TO) CEO:

Drilling results on St. David were very positive as we saw promising gas shows in the Utica and Lorraine. The pilot programs in the lowlands are rapidly ramping up with several operations under way simultaneously. All these operations are designed to provide extensive technical data critical to assessing the commerciality of the play. We are very pleased that the operator does not compromise in this regard. We believe we remain on track to have an adequate sample of quality results to make a preliminary assessment of the commerciality of the Quebec shales in 2009.

Questerre is a partner with both Forest Oil and Talisman Energy. There is a laundry list of juniors that would benefit from positive news on this area play - they had amazing runs in April-June 2008 on the backs of Forest Oil's April 1 announcement that two vertical pilot wells were tested at rates of up to 1 MMcfe/d.

It will take multiple wells to get the optimal drilling and completion procedures down but these succesful vertical wells are key - poor results from an individual well do not condemn this play. In fact longer term players may find some bargains out there.