Quebec to Open up Shale Oil & Gas Reserves
Quebec passed hydrocarbon legislation that is likely to open up Shale Gas and Oil reserves to energy companies operating in the Province.
Bill 106, introduced in June, passed by a margin of 62 to 38. It creates a new agency to promote Quebec’s transition to cleaner energy but also includes the Petroleum Resources Act, which may clear the way for more exploration.
Shares of companies that hold exploration rights, including Calgary-based Questerre Energy Corp. (TXV:QEC) and Junex Inc. (TXV:JNX) ,based in Quebec City, surged in heavy trading last week as passage of the legislation looked likely.
Questerre holds about 1-M acres and has drilled test wells in the Utica Shale formation along the St. Lawrence River, according to its website.
Questerre’s shares rose the most in more than 8 years Thursday and inched up again Friday. Junex’s stock increased 30%, the most in almost 2 years. The company announced last month that its Galt No. 4 horizontal well has produced a total of 17,798 bbls of light, sweet Crude Oil in the Province.
Bill 106 establishes a system for licensing and authorizing the exploration and production of oil and gas, which had been governed by the province’s Mining Act. It also creates an energy transition fund for the payment of petroleum royalties.
Passage of the bill was “a necessary and critical pre-condition” for oil and gas exploration in Quebec, Questerre CEO Michael Binnion said in an interview last week.
While Canada’s National Energy Board does not record Quebec as producing any marketable hydrocarbons of its own, the province holds enough Nat Gas alone to meet its own needs for about 100 years.
Most is locked up in the Utica Shale formation along the St. Lawrence River or in deposits beneath Anticosti Island, according to the Canadian Association of Petroleum Producers.
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