December 06, 2004 --- Vol. 10, No. 110December 2004

Devon Canada trims Beaufort well costs

Devon Canada is “ready to roll” on the first gas exploration well in Canada’s Beaufort Sea since 1989, after completing 30 months of groundwork and lowering well costs substantially below its initial estimate of C$80 million, said Michel Scott, the company’s vice president of government and public affairs.

He told Petroleum News Dec. 6 that Devon’s decision to “manage its risks” has lowered cost projections to C$55 million to C$60 million because the targeted water depths are only about 40 feet. The well depth contained in Devon’s comprehensive study submitted to the National Energy Board is 11,500 feet.

Pending final regulatory approvals and a corporate go-ahead the well will be drilled in the 2005-06 winter as the first of four Devon must drill by 2008-09 to retain its four exploration licenses.

Scott said the door is still open to prospective partners but Devon has decided it “can’t wait forever” with the first well. Depending on results, others might be attracted to the program, he indicated.

In partnership with Petro-Canada, Devon has posted one Arctic gas discovery in the onshore Mackenzie Delta, which could contribute volumes to the proposed Mackenzie Valley pipeline.

Scott said his company is encouraged by the filing of major applications by the Mackenzie Gas Project and now feels that negotiations with the Delta gas owners on the size of the pipeline and access policies for independent producers are “moving along OK.” Also contributing to Devon’s optimism for the Beaufort were the results of 3-D seismic programs in 2001 and 2002 over 466 square miles that generated some “very attractive” prospects, he said.

Devon holds 846,000 acres in the Beaufort that carry C$225 million in work commitments in a region that is estimated to hold 50 trillion cubic feet of resources.

During the 1970s and 1980s, exploration supported by hefty Canadian government incentives completed 91 wells in the Beaufort, yielding 26 significant discovery licenses.

Based on those results, the National Energy Board has rated the marketable gas resources at 4.1 tcf in the Beaufort, plus the 5.8 tcf on the Delta that is controlled by the Mackenzie project’s four anchor gas owners.


There were two typos in the Dec. 3 news bulletin, which have since been corrected in Petroleum News’ archives. The bulletin, headlined “Governor wants roads to rev up resource economy in 2005,” said Alaska Gov. Frank H. Murkowski made the announcements on Dec. 4. The announcements were made on Dec. 3. Among other things, Murkowski said his administration planned to build a 50- to 60-mile road from Prudhoe Bay east to the gas-rich Point Thomson field. The Dec. 3 news bulletin reported this as an “upgrade” when, in fact, there is currently no road to Point Thomson.

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