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Canadian North stops downward trend with six NWT winter wells scheduled
By Gary Park For Petroleum News
Ending a four-year slide, the Northwest Territories is staging a modest turnaround in winter drilling this year.
The schedule includes six wells after two dry holes last year and five in 2006, but still a far cry from the record 36 wells in 2003, 18 in 2004 and 10 in 2005, when hopes of an early start on the Mackenzie Gas Project were at their peak, but starting to falter.
Leading the pack is MGM Energy, which has completed the first of three planned wildcats in the western region of the Mackenzie Delta and has two more wells on its schedule, with a budget of C$60 million for the drilling.
In addition, the northern explorer has earmarked C$35 million for seismic testing this year in the Central Mackenzie Valley at Nogha.
Husky drilling two wells Husky Energy is gearing up for two wells costing about C$40 million on Exploration License 423 in the Central Mackenzie with partners International Frontier Resources, which is increasing its holding in the Summit-Keele area to 15 percent from 5 percent and Pacific Rodera Energy, with a 10 percent stake.
Pacific Rodera said Feb. 11 that the partnership has spud the Dahadinni B-20 well (formerly named Haywood B-20) and is drilling into the Devonian and Silurian formations. Based on seismic results, it estimates the structure is double the size of the Summit Creek B-44 well, which tested in 2006 at rates of about 20 million cubic feet per day of natural gas and more than 6,000 barrels per day of 55 degree light oil and condensate. That well recently received a Significant Discovery License, which carries indefinite tenure of the land.
Pacific Rodera expected the second well, Keele River L-52 (formerly Cloverleaf B-44), would spud using a second rig about mid-February to evaluate a shallow Cretaceous-aged reservoir which is believed to be oil bearing.
The well is within tie-in distance of the Norman Wells, Northwest Territories, to Zama, Alberta, pipeline, which has 30,000 bpd of spare capacity, opening the way to early production if a significant oil reservoir is discovered.
Drilling of those two wells will fulfill the work commitment on Exploration License 423, extending the license for a second term of four years.
Petro-Canada also drilling Petro-Canada is operator of the sixth well, which Chief Executive Officer Ron Brenneman told a conference call earlier in February is still on track.
The 100 percent-owned Kwijika gas well on Exploration License 433 is part of the company’s review of its options for the Northwest Territories.
As with Petro-Canada’s joint venture in Alaska with Talisman Energy, development hangs in the balance until decisions are made to build pipelines, Brenneman said.
International Frontier President Pat Boswell shares that view, but is hopeful that a couple of major discoveries could spur some action on the pipeline.
MGM Chief Financial Officer Rick Miller told the Calgary Herald that his company is optimistic about the future of the Mackenzie project, saying that if it didn’t believe a pipeline would be built it wouldn’t be drilling.
In the NWT, Petro-Canada has interests in eight blocks covering about 1 million gross undeveloped acres (600,000 net acres) in the Mackenzie Delta Corridor, six exploration licenses, two Inuvialuit land concessions and is operator of five licenses.
As well, it has a 100 percent stake in 73,000 acres embracing two Significant Discovery Licenses in the Colville Hills area of the Mackenzie Corridor.
On the seismic front, Kodiak Energy said Feb. 8 it has all of the required permits for its winter program on Exploration License 413, known as Little Chicago.
Work, involving about 25 miles of two-dimensional seismic, is now under way and is due for completion by March 31.
The license comprises 200,000 acres, of which Kodiak has a majority working interest of 56.25 percent and is operator.
It said work continues to “define the drilling program with its partners.”
Last winter, the company completed a successful seismic acquisition program of more than 50 miles on the properties.
Two, maybe three Kodiak acquired the license through its takeover of Thunder River Energy last year. According to its own management discussions of the license and a petroleum engineering report, Little Chicago has two definitive prospective target reservoirs identified by seismic and gravity surveys done last year, plus a further deeper target, yet to be quantified.
The Bear Rock prospect, located at a depth of 2,300 feet, was initially thought to be a single pool, but the new seismic indicates it is distributed throughout the project as a series of pools.
The engineering report identified 13 possible drill targets and has estimated initial production for these wells at about 1,000 bpd from each well. When extrapolated, the current “best estimate” for the drill targets points to oil in place of about 500 million-600 million barrels.
Following initial testing, the company believes preliminary development could achieve production of 10,000 bpd from 10-plus wells, enough for construction of a pipeline from Norman Wells by a third-party pipeline company in the 2011-2012 period.
Taking a longer-term view, ConocoPhillips views the Canadian government’s posting this month of four large exploration parcels in the Beaufort Sea as “really significant in terms of acreage size,” said the company’s Canadian President Kevin Meyers.
But he would not say whether ConocoPhillips will be among the bidders, citing industry competition.
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