With more and more companies eyeing Canadian oil and gas takeover opportunities, some regions are coming under increased investor focus than others. While the country hosts some of the world's most impressive energy reserves, one play in particular is gaining a solid reputation among producers.
The Viking oil play, located in central Alberta and spread over most of Saskatchewan, has fast become one of the country's most desirable energy-investor hotspots.
History and geologyThis play has an established reputation in that it has produced both oil and gas from conventional reservoirs as far back as 1957. In contrast to the formations that surround it, it is a well-known, low-risk conventional light oil play, second only to the Cardium formation in the Western Canadian Sedimentary Basin when it comes to original oil in place (OOIP). Investors will also be pleased to hear that at an estimated 4 percent, the Viking play's recovery rate is one of the lowest. Recovery rate refers to the percentage of reserves that have been extracted. The Viking play has been delineated by over 8,000 vertical wells to date and consists primarily of fine- to coarse-grained sandstone located between two marine shales. It is divided into two separate zones — an upper and lower zone. The play's upper zone ranges from 2 to 3 meters thick and, through conventional vertical wells, is the main space where oil was produced in the past. The lower zone is estimated to be 3 to 9 meters thick and was largely uneconomic until the recent advent of horizontal drilling and advanced completion techniques, such as multistage fracturing (fracking). Most of the formation's land has already been locked in by oil and gas majors; however, a select number of juniors have managed to accumulate notable land positions.