About
Progress Energy is a mid-sized natural gas producer, but the true scale of the company is told by other metrics. Ultimate potential of Progress assets is measured in billions of cubic feet per day of gas production.
Progress holds some 900,000 acres of land in the prolific Montney fairway, showing 300 metres (1,000 feet) of gas-saturated, high-pressure pay zone, as confirmed by third-party evaluation. And we are, by far, the largest landholder in the Montney trend.
The Montney formation of northeast British Columbia is the natural gas equivalent of the oil sands. As with the oil sands, we know the gas is there in abundance and it now becomes a challenge of operational excellence to continuously improve extraction efficiencies. See Operations.
The other great challenge facing Progress is to successfully capitalize this massive asset base. We are currently an intermediate producer, with 45,000 boe/d of gas production and an enterprise value of over $3 billion, confronting an assembled asset base with a potential value counted in tens of billions of dollars.
As a modest beginning, we aim to double production in the next five years.
In order to fund our opportunities, we are growing cash flow through the development of multiple Montney production ‘pods’ using modular, high-efficiency design methods on our first six Montney developments. Additionally, we’ve made four parcels of our Montney lands available for joint ventures, which we expect to conclude in coming months. We expect these deals to provide significant short-term cash to increase our capital expenditure budget, as well as funding the lion’s share of medium-term development costs on the joint venture assets.
With our land costs behind us, Montney production is commercially viable at current low gas prices. Development modules called ‘pods’ will each produce 50 MMcf/d of gas and deliver capital payouts in 18 to 36 months, against project life expectancies of 10 years.