A Calgary-based oil and gas company says it has proven there is shale oil in the Sahtu region of the Northwest Territories.

MGM Energy Corporation drilled its first well into the Canol shale this winter. It released its results Tuesday.

President Henry Sykes said the presence of high quality oil is a good sign.

mi-norman-wells

The Town of Norman Wells, N.W.T., is located close to where MGM is exploring for oil and gas. (CBC)

"How much oil is in place? We have some broad ideas. But we have taken core samples and once we have finished the analysis of those core samples we'll have a pretty good idea of what the pore space is in the rock and how much of it is full of oil. So we will be able to calculate to a greater degree of certainty the amount of oil that is in place," he said.

Sykes said it will take several months to analyze the results, and they won’t know if it's economically viable until a horizontal well is drilled. 

The company says at this time it has no plans to do that. Last November, it withdrew an application to drill a horizontal well after the project was referred to an environmental assessment.

MGM said it couldn't afford to spend years waiting for a review, not knowing the resource's value.

Exploration companies estimate billions of barrels’ worth of oil exist in shale rocks in the Sahtu.