CALGARY — Oil producers are breathing new life into a long-dormant shale gas play in Alberta, southwest of Edmonton.Bloomberg reports that companies including Obsidian Energy Ltd. and Yangarra Resources Corp. are now targeting the Basel Belly River formation, located in the Willesden Green area along the Eastern Slopes of the Rocky Mountains, for oil production.The formation was once one of Alberta’s busiest natural gas plays, particularly during the mid-2000s when gas prices approached $16 per MMBtu.At the time, companies including Ovintiv (then Encana) and Ember Resources drilled extensively in the area.In 2005, more than 1,000 wells targeting or terminating in the Basel Belly River were drilled, with approximately 95% focused on natural gas production.However, activity sharply declined following the US shale revolution in 2009, which unlocked vast new gas supplies, pushing prices lower, and by 2014, the number of wells drilled into the formation had fallen to single digits annually and remained at those levels until recently.Now, with advances in drilling and completion technology, combined with stronger oil market economics, the play is seeing renewed interest..Conoco CEO says US oil growth at risk as ‘lower-for-longer’ prices threaten shale.Alberta Energy Regulator (AER) data shows 15 drilling licences targeting or terminating in the formation were issued during the first half of 2026, the highest number in 14 years.The renewed interest gained further momentum in June when Obsidian announced it would acquire 35 sections of land in the field from Highwood Asset Management Ltd. for $105 million.Those assets include production of approximately 2,500 bpd — about 75% of which is light oil.“You started to see some initial wells drilled in the Belly River that had good success on the backs of those that we licensed,” Obsidian chief executive officer Steve Loukas said.“Our initial well was drilled in the fall of 2024, and we’ve had constructive results that have carried through into 2025 and ultimately 2026.”Obsidian is planning to drill six additional wells as it looks to increase production from the acquired assets to roughly 3,000 barrels of oil equivalent per day, with Loukas estimating each well can be developed for approximately $5 million.With the Highwood acquisition and planned development program, Obsidian expects its total production from the Belly River could reach approximately 7,000 bpd and estimates that total production from the Willesden Green area currently ranges between 10,000 and 13,000 bpd.
