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Quebec renews search for hydrocarbons Talisman, Questerre to drill for gas this year; juniors partner with provincial utility, hoping for first commercial oil find Gary Park For Petroleum News
From shaky beginnings, Quebec is staging a renewed push to join Canada’s hydrocarbon producing provinces.
Talisman Energy has linked up with Calgary-based junior Questerre Energy to drill a gas well this year and two other juniors — partners with Hydro-Quebec, the provincially owned utility giant — have raised hopes of Quebec’s first commercial oil find.
Talisman and Questerre plan to drill their well in the St. Lawrence Lowlands between Montreal and Quebec City, targeting a structure that is an extension of Talisman’s highly successful Trenton Black River play in the U.S. Appalachian region where the big Canadian independent is investing heavily and producing about 115 million cubic feet per day.
Other targets identified by the partnership are a deeper sandstone structure and a tight gas play.
Each holds the prospect of yielding gas in the billions of cubic feet, supported by Quebec government fiscal terms that Questerre Chief Executive Officer Michael Binnion rates as some of the best anywhere.
Talisman, which could spend up to C$6 million in Quebec this year, has a farm-in arrangement with Questerre to pay for the cost of drilling up to four wells to earn an interest in Questerre’s land holdings. Two wells with potential Hydro-Quebec was an early partner with Questerre before dropping out, but is partnered with Junex and Gestion Bernard Lemaire in drilling three wells on the Gaspésie Peninsula.
Of the three wells on the Galt block, two have shown some potential, according to Jean-Sebastien Marcil, exploration chief for Junex. They were drilled to depths of 7,700 feet and 8,850 feet and indicated the presence of oil, gas and condensate without any water from depths of 2,600-9,800 feet.
Initial production tests in fall 2004 yielded about 185 barrels of clean light oil from one well, prompting the partners to undertake a “stimulation” job at a depth of 7,200 feet.
Depending on results of the extended production test, Junex hopes to raise as much as C$10 million to support the drilling of at least two more wells, a company spokesman said.
Junex will also continue work on a prospect west of Montreal and is preparing to drill three to six new shallow wells in partnership with Petrolia.
Exploration in the Gaspésie Peninsula started over a century ago with the drilling of 100 shallow wells along oil seepage areas, while companies such as Shell Canada and Husky Energy explored for hydrocarbons 50 years ago. Two commercial gas finds in the 1970s have since been produced.
Junex has spent the last 10 years working in the Gaspésie Peninsula, starting with the development of an oil well drilled in the 1980s and, in partnership with Petrolia, has accumulated 3.5 million acres of exploration land, identifying prospective zones that the company says are “considered favorable for hydrocarbon discovery.”
As with major oil and gas producing areas, the latest hunt in Quebec is buoyed by advances in exploration technology.
Binnion is emphatic that there is gas to be found, noting that 90 percent of wells in Quebec have encountered gas, but the challenge is to find a pool that is big enough to support a commercial undertaking.
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