In its latest report the Energy Resources Conservation Board records a 14 per cent increase in production in 2012 and 9.5 per cent increase in reserves over 2011 levels, due to the higher production rates from horizontal wells.
Alberta's crude oil production totalled 556,000 barrels of oil per day with a yearly total of 204 million barrels.
"We saw the trend start in 2010, but with the price environment and with the successful use by industry of multi-stage fracturing technology in horizontal wells it's definitely a great success story from that perspective," said Carol Crowfoot, chief economist for the ERCB.
Prior to that she said there had been a "flattening" in production because of the maturing of reserves in the oil basin.
Hydraulic fracturing, or fracking, injects sand, water and chemicals to break apart rock and free the oil or gas inside.
"In the province certainly natural gas prices have been in the doldrums for quite some time so industry is focusing on producing other commodities that bring a better rate of return obviously - crude oil being one of them," Crowfoot added.
The ERCB forecasts Alberta's annual raw crude bitumen production will total 3.8 million barrels per day for a total of 1.39 billion barrels per year by 2022. It says since 1967 Alberta has produced about 8.8 billion barrels of raw crude bitumen from the oil sands and 16.7 billion barrels of crude oil since 1914.
Crowfoot said the forecast is dependent on oil prices, access to capital and whether the market flattens out or is in decline.
Alberta's total remaining established crude bitumen and crude oil reserves amount to 169.6 billion barrels, consisting of 167.9 billion barrels of crude bitumen and 1.7 billion barrels of crude oil.
"It's in the range of about eight or nine years. That means if we don't find more reserves and we keep production at current levels that will last us eight or nine years. But of course we find more reserves," explained Crowfoot.
"You have to remember we're in a maturing basin and on the conventional oil side even though we're seeing a definite change in trend from a decline in production - it's a diminishing pie of remaining reserves."
Conventional natural gas reserves in the province stood at 33 trillion cubic feet in 2012 which is down three per cent from 2011. Reserves of natural gas liquids were 1.6 billion barrels which is virtually unchanged from the year previous.
Despite the diminishing pie of reserves Crowfoot said that doesn't include what people commonly refer to as shale oil, shale gas, and shale natural gas liquids.
"If development occurs on the shale side then there is tremendous resources. For shale, we have a treasure trove of resources under the ground, then of course we would have significantly more reserves than we do now."
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