The Quebec shale play, which involves drilling for gas by fracturing dense rock, focuses on an area south of the St. Lawrence River between Montreal and Quebec City.
Interest has grown in the region since April, when Forest Oil Corp., a Denver-based oil and gas company, announced a significant discovery there after testing two vertical wells.
Forest Oil said its Quebec assets may hold as much as four trillion cubic feet of gas reserves, and that the Utica shale has similar rock properties to the Barnett shale in Texas - the largest U.S. onshore gas field.
Quebec has been known to have natural gas reserves, but advanced horizontal drilling techniques and higher gas prices are now only making the play potentially economically viable, observers say.
Forest Oil, which has several junior partners in the region, will drill three horizontal wells in Quebec this summer. It has targeted its first production for next year, and full-scale drilling for 2010
Montreal-based Gastem ( GMR on Vancouver )is partnered with Forest Oil, Questerre
( QEC on Toronto ) and Epsilon Energy Ltd. in the Yamaska permit of the St. Lawrence lowlands.
An important catalyst for Gastem's stock could come from results of the drilling of two of Forest Oil's wells this summer, Mr. Vallance said. Forest's third well is in partnership with Junex Inc.
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