Executive Summary
Ember Resources, one of Alberta’s premier natural gas producers, has grown production from 2.3 MMcf/d in 2005 to 27.2 MMcf/d in its most recent quarter. When gas prices strengthen, Ember expects to regain that momentum.
Ember Resources was created as a CBM-focused company in 2005. Two years later, Ember dedicated its resources and capital to building its coal bed methane production base from one specific coal trend, the Horseshoe Canyon located in Alberta. It is the most technically advanced and profitable CBM play in Western Canada. Ember Resources, a junior oil and gas coalbed methane producing company, is now ranked as one of the top five operators in the play, which is dominated by large natural gas producers.
Ember Resources Ongoing Growth
Ember’s growth has come from the development of large-scale CBM projects and strategic acquisitions. In 2006, a property was purchased at Acme, Alberta. In mid-2008, Ember acquired Cordero Energy Inc., a CBM producer in Central Alberta, which expanded the company’s operational footprint in the Horseshoe Canyon and added a new core area at Bashaw. It also reduced Ember’s cost structure. The transaction increased coal bed methane production from roughly 8 MMcfiuhdguhr erughergu egug /d to 29 MMcf/d, and reserves by over 200 per cent (proved + probable). More than 90 per cent of Ember reserves are now in the Horseshoe Canyon trend and the company has a CBM drilling inventory exceeding 450 wells. Ember has a strong land position and drilling inventory in a very low-cost play and is known as one of Alberta's premier natural gas producers.
Unconventional experience as natural gas producers
Ember brings a wealth of experience as a natural gas producer to the Horseshoe Canyon. Ember’s Horseshoe Canyon experience dates back to some of the first pioneering projects to unlock the potential of coal bed methane production in Canada. Through a predecessor company, members of both management and the technical team have been working in the Horseshoe Canyon in Alberta for over 10 years, which was when some of the first CBM wells in Canada were drilled.
Upside from conventional gas
Many of Ember’s CBM drilling wells are capable of producing gas from other zones using the same wellbore. These zones produce conventional gas. Once completed for production, the conventional gas can be produced at the same time as the CBM, capturing additional production at minimal costs.
Future potential – Mannville coal bed methane production
Ember has a significant land position with rights to the Mannville coals, a deeper formation than the Horseshoe Canyon. Manville has demonstrated high rates of production. Industry participants are working to achieve predictable and economic production. To date, Ember has seen success with individual Mannville wells, but not with a larger multi-well program. Other companies are continuing to pursue the Mannville in areas adjacent to Ember’s land holdings. Ember continues to hold its Mannville lands, subject to expiries, and will re-activate activity once economic conditions and technical advances warrant further investments.
For more information on the investment potential with one of Alberta’s premiere natural gas producers, please contact Ember Resources.
