Birchcliff’s operations are concentrated within its one core area, the Peace River Arch, which is centred northwest of Grande Prairie, Alberta, adjacent to the Alberta/British Columbia border. The Peace River Arch is considered by management to be one of the most desirable natural gas and light oil drilling areas in North America.
The Peace River Arch is one of the most prolific natural gas and oil producing areas of the Western Canadian Sedimentary Basin and is generally characterized by multiple horizons with a myriad of structural, stratigraphic and hydrodynamic traps. There is an abundance of prolific resource plays, related in part to the proximity of the area to the deep basin, where generation and trapping of hydrocarbons preferentially occurs. The Peace River Arch provides all-season access that allows the Corporation to drill, equip and tie-in wells on an almost continuous basis.
The Corporation’s strategy is to continue to develop and expand these two existing and very large resource plays in the Peace River Arch while maintaining low capital costs and operating costs. These resource plays are large enough to provide Birchcliff with an extensive inventory of repeatable, low-cost drilling opportunities that we expect will provide production and reserves growth for many years. To date, the Corporation’s finding costs and operating costs are some of the lowest in the industry and Birchcliff’s strategy is to continue to seek opportunities and solutions that reduce its costs further. Birchcliff’s strategy is based on its current ownership of large contiguous blocks of high working interest land in the Corporation’s operating areas and its 100% ownership of the majority of its major facilities and infrastructure in proximity to its drilling operations. Birchcliff’s land position and infrastructure ownership gives it a competitive advantage over others in its areas of operation and supports its low operating cost structure that helps Birchcliff maintain profitability in a low commodity price environment. The PC Gas Plant is the cornerstone of Birchcliff’s strategy to develop its Montney/Doig Resource Play to control and expand its production and to further reduce its operating costs on a per boe basis.
The Corporation has excellent control of and access to infrastructure in the Peace River Arch to process its light oil and natural gas production. In 2010, the Corporation commenced processing natural gas through the PC Gas Plant, which is a 100% owned and operated facility located on the Montney/Doig Resource Play. The PC Gas Plant currently has a licensed processing capacity of 180 MMcf/d.
At December 31, 2016 the Corporation held 454,002 (421,111 net) acres of undeveloped land in the Peace River Arch, with a 93% average working interest.