We have about 1,500 mineral leases in Canada, mainly in Alberta and British Columbia. We produce and market natural gas, natural gas liquids, synthetic crude oil and bitumen. In addition, we have significant exploration acreage offshore.
We have around 1,200 mineral leases with more than 2.6 million net mineral acres. Our position is primarily in the Duvernay play in Alberta and the Montney play in British Columbia. Activity includes drill-to-fill of our existing infrastructure and an investment focus on our liquid-rich shale acreage. As part of our Shales focus, we sold all of our in-situ assets in May 2017. Our share of shales production averaged 129 thousand boe/d in 2017.
In 2017, we drilled 86 wells. We have interests in 882 productive wells. We operate four natural gas processing and sulphur-extraction plants in Alberta and four natural gas processing plants in British Columbia.
Bitumen and synthetic crude oil
Synthetic crude oil is produced by mining bitumen-saturated sands, extracting the bitumen from the sands and transporting it to a processing facility where hydrogen is added to produce a wide range of feedstocks for refineries. In May 2017, we sold all of our in-situ and undeveloped oil sands interests and sold our share in the Athabasca Oil Sands Project (AOSP). Separately, we acquired a 50% interest in Marathon Oil Canada Corporation, which holds a 20% interest in the AOSP, and we continue to operate the upgrader.
Carbon capture and storage
As part of AOSP, we operate the Quest CCS project, which captured and safely stored more than 1 million tonnes of carbon dioxide (CO2) in 2017.
We have a 31.3% interest in the Sable Offshore Energy project, a natural-gas complex off the east coast of Canada, and other acreages in deep-water offshore Nova Scotia and Newfoundland. We have relinquished all licences for the Shelburne exploration project offshore Nova Scotia. We have a number of exploration licences off the west coast of British Columbia and in the Mackenzie Delta in the Northwest Territories.
We have nearly 32,000 mineral leases in the USA. We produce oil and gas in deep water in the Gulf of Mexico, heavy oil in California and oil and gas from shale in Pennsylvania, Texas and Louisiana. The majority of our oil and gas production interests are acquired under leases granted by the owner of the minerals underlying the relevant acreage, including many leases for federal onshore and offshore tracts. Such leases usually run on an initial fixed term that is automatically extended by the establishment of production for as long as production continues, subject to compliance with the terms of the lease (including, in the case of federal leases, extensive regulations imposed by federal law).
Gulf of Mexico
The Gulf of Mexico is our major production area in the USA and accounts for around 57% of our oil and gas production in North America. We have an interest in around 180 federal offshore production leases and our share of production averaged 247 thousand boe/d in 2017.
In January 2018, we announced one of our largest US Gulf of Mexico exploration finds in the past decade from the Whale deep-water well. Whale is operated by Shell (60%) and co-owned by Chevron U.S.A. Inc. (40%). It was discovered in the Alaminos Canyon Block 772, adjacent to the Shell-operated Silvertip field and approximately 16 kilometres from the Shell-operated Perdido platform. Evaluation of the discovery is ongoing.
We are the operator of eight production hubs – Mars A, Mars B, Auger, Perdido, Ursa, Enchilada/Salsa, Ram Powell and Stones – as well as the West Delta 143 Processing Facilities (Shell interests ranging from 38% to 100%). We also have non-operating interests in Nakika (Shell interest 50%) and Caesar Tonga (Shell interest 22.5%). Our operated interest in Coulomb (100%) is tied into Nakika.
We continue with development of the Appomattox project, with first oil expected in 2019. In 2018, we completed the purchase of the Turritella FPSO for the Stones deep-water development. The FPSO has a daily production capacity of approximately 60 thousand barrels of oil and 15 million standard cubic feet of natural gas.
Kaikias is a subsea tie-back to the Shell-operated Ursa platform. In 2016, Shell began the drilling campaign for Kaikias Phase 1 (Shell interest 80%). In February 2017, Shell fully sanctioned Phase 1 of the Kaikias deep-water project and Phase 2 was approved in April 2017. Phase 1 will include three wells and Phase 2 will add an additional well, which collectively will be system constrained at the peak production of approximately 40 thousand boe/d. First oil is expected in June 2018 for both Kaikias Phase 1 and Phase 2.
We have approximately 30,000 mineral leases with nearly 1.5 million net mineral acres. Our activity is focused in the Permian Basin in West Texas and the Marcellus and Utica plays in Pennsylvania. We also have a non-Shell-operated interest in the Haynesville shale gas formation in Northern Louisiana.
In 2017, we drilled 153 wells. We have interests in more than 2,300 productive wells and operate four central processing facilities. The USA represents nearly 70% of our shales proved reserves and 88% of our shales liquids proved reserves. Our share of shales production averaged 137 thousand boe/d in 2017.
We have a 51.8% interest in Aera Energy LLC, which operates around 15,000 wells in the San Joaquin Valley in California, mostly producing heavy oil and associated gas.
In 2017, we relinquished our last remaining federal lease in the Chukchi Sea and have no further plans for frontier exploration offshore Alaska. With the exception of two remaining positions in the long-established North Slope area, we have exited all other leases. We retain a non-operating interest in 13 federal leases, operated by ENI, which was increased from 40% to 50% at zero cost. An exploratory drilling operation for this joint venture was permitted by ENI and is under way. We continue to evaluate our 18 state leases at nearby Western Harrison Bay, which have geologic affinity with recent discoveries announced by other North Slope operators.
Rest of North America
We also have interests in Honduras and Mexico.