Canadian natural gas players have taken a big hit in the wake of the U.S. shale boom. Now companies like Encana (NYSE:ECA) and its partner PetroChina (NYSE:PTR) are looking to the Duvernay shale and its wet-gas window as the possible savior of Alberta's natural gas industry. The Duvernay play is still developing, but advances in multi-pad drilling and attractive liquids as well as oil-rich production are making the formation an important growth asset.

The good news
Major players are interested in Duvernay and many have invested enough to get a good understanding of its potential. At the end of 2012, PetroChina bought a 49.9% stake in Encana's Duvernay formation in exchange for $1.18 billion Canadian dollars and CA$1.1 billion in development costs over the following four years.

Encana is working hard to throw off poorly preforming assets. By highlighting Duvernay as one of its major growth assets, it is taking concrete steps to try to turn the company around. Bringing in PetroChina only sweetens the pot by decreasing Encana's capital expenditure requirements.

Not only are PetroChina and Encana involved, Chevron (NYSE:CVX) has 325,000 net acres in the Kaybob region of Duvernay. Chevron has already completed its initial exploration program and has seen promising results, with liquids production being 30% to 70% of total production. From 2012 to 2013 Chevron's worldwide net oil and gas production fell slightly from 2.610 million barrels of oil equivalent per day to 2.597 mmboed, but management has made it clear that they want to thoroughly understand Duvernay before they bring it into full production mode.

Smaller producers like Talisman Energy (NYSE:TLM) are also active in the Duvernay. In the third quarter of 2013, it was able to bring its well costs down 16% year over year. Its total acreage in Duvernay is 347,000 acres. Talisman is interested in a joint venture or selling off its North Duvernay assets so that it can focus on South Duvernay. Thanks to falling drilling costs and the established economics of wet-gas shale, Talisman Energy should not have too difficult a time spinning off part or all of North Duvernay.

The really good news 
Thanks to its acreage being focused in the liquids window of the Duvernay, Encana expects that $4 MMBtu natural gas and $90 per barrel WTI will give it rates of return up to 100% once configured in a hub mode. Such returns are a welcome change from its dry-gas legacy production, and Encana expects that the formation will be able to produce around 50 mboed.

These results point to success for PetroChina and other players in the region like Chevron and Talisman. PetroChina is a massive company with the backing of Beijing, so providing the capital to fund growth will be no challenge. Talisman's acreage is focused in the liquids windows, so it can expect high-margin production.  

Chevron's massive Gorgon project in Australia is already 76% complete. As Gorgon comes closer to completion, Chevron will have more freedom to direct capital toward emerging North American plays like Duvernay. Given the attractive economics in Duvernay's liquids-rich window, we can expect that Chevron will be able to start developing the formation relativity soon.

Bottom line
The North American shale revolution is expanding to new areas. Canada's experience with the natural resource extraction industries will help avoid the governmental complications seen in emerging markets like Poland. With PetroChina, Encana, Chevron, and Talisman Energy all active in Duvernay the formation is becoming an established part of the North American shale industry.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.