by canadian standards its commercial already

Now here is an interesting and current article on Gas, featuring an interview with an Oil and Gas expert, and based on facts. It contains a graphic and compelling sentence that backs up GDN Managements assumptions re the commerciality of the Paradox #1 well - already! No if's, but's, or maybe's.
As stated initially, I am into GDN for the vast Uranium potential and IPO (and I was most impressed with the grades presented by the way, thank you for asking, and also for some new cheap shares to boot) -but obviously any commercial success in the Gas side for Paradox #1 would be most welcomed. See if you can spot the specific detail/sentence. Article as follows:


June, 2007
Bill Gwozd: Canada Must Act Now Or Face A Painful Gas Pinch
By Mike Byfield

Canada's natural gas production capacity is shrinking while North American demand continues to escalate. A supply crunch is inevitable, warns Bill Gwozd, vice-president of gas services for Ziff Energy Group, unless governments and industries react aggressively. "Politicians should create intelligent incentives for higher-risk gas activity as well as favorable policies toward clean coal and nuclear power," Gwozd says. "These issues are bound to be controversial. In fact, our biggest risk is political paralysis."

The gas specialist has coined a term - NIMTO, Not In My Term of Office - in reference to politicians who avoid difficulties rather than seriously seek solutions. In the case of the gaspatch, according to Gwozd (shown here), the national interest is at stake. "Many industries depend on ample, affordably priced energy," he says. As the gas supply tightens between now and 2015, he adds, different types of gas customers will respond in different ways:

* Given Canada's climate, residential and commercial gas consumption cannot diminish by a large percentage with current technologies although marginal improvements are possible.

* Most gas-fired electricity generation, which continues to grow on this continent, cannot switch fuels. Unfortunately, large generating plants which consume uranium or coal take five to ten years to bring on line.

* Gas leakage and other "parasitical" factors in production and transportation account for eight percent of gas production. These losses cannot be decreased dramatically without new technology.

* Gas demand can be most readily curtailed by energy-intensive industries. One possibility is new efficiency-enhancing technology. But the most easily applied solution is shifting operations to foreign jurisdictions where energy remains available and less expensive.

"We're already seeing fertilizer plants moving offshore and that trend could deepen a great deal in other industries," Gwozd says. "Improving our energy efficiency and developing new sources of energy will require long lead times. If Canada allows itself to simply drift into a deepening energy squeeze, we could run out of time to adapt and we'll forfeit a lot of jobs from coast to coast."

No Canadian is more deeply versed in natural gas than Bill Gwozd. A professional engineer, he attended university in Calgary. He joined Amoco Canada for eight years, then moved to the ATCO Group just before the federal government deregulated gas marketing in 1986. His work focused consistently on gas supply, marketing, storage and processing, including managing flows into and out of ATCO's pipeline network. In 1992, he recalls, gas prices suddenly lurched upward to $3 per thousand cubic feet from $1, creating pandemonium among buyers. "By the time I joined Ziff in 1998, I understood how the continental gas system works under all sorts of conditions," the specialist comments.

Historically, Western Canada has enjoyed an abundance of natural gas, with producers often suffering from surpluses and virtually never from shortfalls. So what has changed?

The removal of federal gas export restrictions in 1986 prompted construction of more pipeline capacity to the gas-hungry markets of the United States and Central Canada. Producers, responding to strong demand, escalated their drilling. Between 1990 and 2005, the annual count of new wells in Canada moved from 6,000 to 27,000. And an increasing percentage of that drilling targeted gas, in part because Canada's crude oil production from conventional wells has been in steady decline since 1973.

In Ziff's outlook, natural gas production will now decline as well. In a study released last week, the consulting group forecast that annual output from conventional and unconventional sources will decrease from 16.6 billion cubic feet per day in 2006 to 13.1 bcf in 2015. "The best prospects have been drilled," Gwozd says. "Our discoveries are now grape-sized, not apples and oranges. The average successful well produces 0.2 mmcf per day, whereas it was 0.75 mmcf/d just a decade ago. The best news in our report is that the decline will slow down, to 0.17 mmcf /d per well by 2015. The bad news is that Canada's gas production overall will go down."

Ziff will soon release a North American natural gas demand study which forecasts rising consumption in both Canada and the U.S. through to 2015. "In Canada, demand will increase by over three percent per year on average. A good deal of that demand will be for oilsands production but Ontario will also need more," Gwozd says. "By 2015, Canadian production will be down by at least three bcf per day while demand will be up by three bcf per day." Further, the North American Free Trade Agreement does not permit Canada to discriminate against gas buyers in the U.S. and Mexico. If the Ziff scenario proves accurate, Canadians will find themselves competing for gas in a much tighter continental market with little or no protection from governments.

Ziff has been forecasting an impending gas deliverability decline for several years. In its recently released short-term gas outlook, the National Energy Board reinforced that message, shifting from a flat supply forecast to a decline.

Alberta Energy Minister Mel Knight, on the other hand, remains much more upbeat. Last week, he told a conference in Calgary that 100 trillion cubic feet of conventional gas remains untapped in Alberta (while 125 tcf has already been produced). "That's a different number than the one you'll see generally... I'm optimistic," the minister said. Beyond the conventional resource, there are vast unconventional gas deposits locked in coalbeds, shales and tight rock. "Is Alberta losing its role as a North American leader in natural gas?" Knight queried. "The answer for me... is absolutely and unequivocally 'no.'"

The energy minister has spent a working lifetime in the oilpatch himself (see this article) and he shares the industry's characteristic optimism. Also, his government is in a position to act in ways that might well alter the NEB and Ziff forecasts. Virtually everyone agrees Alberta's unconventional gas potential is enormous while its remaining conventional resource is far from negligible. The challenge is deliverability. How quickly can the gas resource be transformed into actual production at affordable prices?

To compile its annual production forecast, Ziff combs through historical well outputs from seven individual regions in Western Canada plus coalbed methane and tight gas. Ziff analysts also weigh technological and economic factors. All regional and technical data is then merged to form total estimates. On the demand side, every province and state is assessed with reference to five consuming sectors, and continental totals are compiled. "Our figures are not macro guesswork based on general assumptions. We do our homework thoroughly and we believe Canadian production will decline unless significant policy changes are introduced promptly," Gwozd says.

Arctic gas cannot save the day, at least initially. In the first place, Gwozd says, the volume of delta gas shipped on the proposed Mackenzie pipeline would only amount to 1.5% of Canadian daily production. Secondly, delta gas would cost twice as much as imported LNG (liquid natural gas) on the basis of current costs. "That's a huge differential," the Ziff vice-president comments. Even so, he personally would endorse federal support for the pipeline's construction. A transport link to market, in his judgment, would spark exploration and development along the vast Mackenzie River valley as well as further north in the Beaufort Sea and High Arctic.

Beyond Arctic development, what other policies should governments initiate to ensure that Canada remains well-supplied with energy? Gwozd advocates a range of solutions:

* Provincial incentives should encourage high-risk exploration in the Rocky Mountain foothills, where wells capable of 30 million cu. ft. per day can still be found.

* Producers willing to experiment with substitutes for natural gas demand in bitumen production and upgrading should receive tax or royalty incentives for taking on that risk.

* Gas-fired power generation should be avoided in favour of nuclear and clean coal technologies which reduce or eliminate greenhouse gas emissions.

* On the demand side, the federal ban on energy-wasting light bulbs and similar efficiency-enhancing measures should be imposed to the degree that voters and consumers will accept them.

* In general, governments should improve their financial support for research and development that targets improved energy efficiency and minimizes the environmental footprint.

"Canadians idealistically want energy that's clean, green and cheap," Gwozd counsels. "Those solutions won't appear automatically. We need to get started as soon as possible."

© 2007 Copyright Nickle’s Energy Group. All rights reserved.
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NB:- "The average successful well produces 0.2 mmcf per day,"

* So Paradox #1 has already achieved current 'average successful well' proportions by Canada's standards. Could still be something more than worthwhile, especially if some of the upper zones come through, even slightly - food for thought! Gee, does this mean that management might actually know what they are doing, and what they have, and yes indeed, it is commercial just like they alluded to. I'm still unashamedly leaning towards that theory. And while the Pied Piper and Noddy are bashing the eardrums of all and sundry that they were right, you'll forgive me if I hoot and holler, and raise my arms in my own afterglow by pronouncing that I was right when I did say that it WAS a commercial discovery well. YIPPEE, YEEHAH - so who is wrong, you ask? Well obviously the one/s who STILL don't know what they are talking about - anyone figured that out yet! As I stated earlier today, it was apparent that buyers today knew what they were buying and why - the sellers were too busy following the Pied Piper Brigade to know the difference, ask questions, or understand.
The Truth is out There!

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