Thanks, Reg.
Once again, it's my pleasure to be here as well.
I would refer you to the global map on the second page of your handout. As we've mentioned before, Talisman is a worldwide independent oil and gas producer. We have operations in the North Sea, Southeast Asia, and North America. That's where the focus of the rest of my prepared comments will be, on our North America portfolio.
In the last several years, we have transitioned from a conventional gas and oil player to a predominantly shale gas player due to its significant long-term growth potential and low-cost structure. We have four shale plays in North America, each at different stages in their evolution. I'll talk about those specifically in a moment.
The fourth part of our portfolio is our exploration that handles exploration worldwide.
Referring to the next page, Talisman has approximately 1.8 million net acres of leases of shale gas portfolio in North America that consists of the four plays. Within that acreage position, we have original gas in place of 238 trillion cubic feet of gas. Referring to the pie diagram on the right part of the page, our contingent resource is estimated at 57 trillion cubic feet of gas. To put that in context, Canada consumes about 3.5 tcf, or trillion cubic feet, of gas every year, so this contingent resource from Talisman alone has the potential to fuel the country for 16 years.
As I mentioned earlier, we have four plays. The first and most mature is the Marcellus shale in Pennsylvania. We've grown that resource from basically zero production to over 270 million cubic feet of gas production in the last two years. It is one of the best returning shale plays in North America.
Second most mature is in northeast British Columbia, the Montney shale. This is a play that's distinguished by the thickness of the shale. It's up to 1,400 feet of gas-charged shale, as compared with 250 feet in the Marcellus. The project in B.C. is about 12 to 18 months behind the Marcellus, but results to date have been encouraging. To date, we've only drilled about 35 wells, and that's the major key in unlocking this play. It's to getting our costs down.
Our most recent entry is the Eagle Ford play in south Texas, because of the liquids content of the shale.
The fourth part of our portfolio is in the Utica formation in Quebec, where we have a very large acreage position of about 760,000 net acres. But I must stress, it's very early days in Quebec exploration, as there has only been a handful of wells drilled in Quebec.
You might ask, why shale gas?
The next slide actually has seven points I'd like to address.
First, shale gas provides a sustainable, long-life resource base to North America. These wells will have lives as long as 50 years.
Second, it's scalable. These are very large accumulations, some as large as 100 miles in length. Total shale production in North America in the year 2000 was essentially zero. It has ramped up to 10 billion cubic feet per day in 2010, or 15% of North America natural gas production. Analysts expect that shale gas will grow to over 25 bcf per day by 2015 and will supply as much as 50% of the total North America production by the year 2020.
Third, shale gas is developed using proven technologies of horizontal drilling and advanced fracture stimulation.
Fourth, these resources are very predictable. There is little variance in well-to-well performance.
Fifth, shale gas has a reduced carbon footprint relative to competing fuels. It emits 40% less greenhouse gases than coal, 30% less than fuel oil, and 22% less than conventional gas resources.
Sixth, it is low cost relative to other opportunities. This is because there is less geologic risk in drilling the wells, and the drilling and completion process is repeated potentially thousands of times, resulting in operational efficiencies.
The last point is the liquids potential. Recent successes in liquids-rich areas have resulted in a shift to developing liquids-rich areas to take advantage of higher commodity prices.
My last slide illustrates some of Talisman's best practices that we utilize in the development of this resource.
First is what we call our good neighbour program. This is where we proactively address impacts of shale development and set clear behaviours for our staff and contractors.
Second is our secondary containment and our environmental protection. We recycle 100% of the water we use in developed plays like the Marcellus. We proactively list on our website all the chemicals we use in fracture stimulation.
The last bullet point is actually probably the most important. We focus on safe operations. It's a cornerstone of our company philosophy.
In conclusion, there is a tremendous opportunity for Canada to develop its natural resources in a sustainable, responsible manner, which furthers our energy security and returns dividends to Canadians.