With news still awaited on the results of a Central Mackenzie Valley well drilled last winter, one of the small partners is stirring interest in the region by raising further exploration funds.
International Frontier Resources said Oct. 5 it will issue 2.3 million units at C$1.35 per unit, plus an option to sell an additional 230,000 units, with proceeds going to its Northwest Territories exploration.
The hope is for the first major oil find in almost 85 years since Imperial Oil discovered the Norman Wells field, which had 660 million barrels of original oil in place and is still pumping.
Norman Wells crude is shipped to northern Alberta on an Enbridge pipeline that has capacity of 34,000 barrels per day that could be expanded to 50,000 bpd, but is currently carrying only 23,000 bpd.
Calgary-based International Frontier is a 5 percent partner in the Wilma Summit Creek B-44 well that was drilled to a total depth of almost 10,000 feet in late March, logged and drill stem tested.
International Frontier and Pacific Rodera, two minor partners in the Northrock Resources-operated well, have since seen their share prices rise on speculation of a find.
Geologists theorize oil find possible
Two geologists told a Canadian Society of Petroleum Geologists’ conference in June that an oil discovery is possible, based on geologic interpretations, the level of activity and the absence of a gas pipeline.
The B-44 partners heightened speculation in June when they bid C$24.8 million for 224,000 acres 75 miles south of Norman Wells, while Paramount Resources, Petro-Canada, BP Canada Energy and Chevron Canada Resources were involved in picking up four other exploration licenses for a combined C$100 million.
Adding to the momentum, Husky Energy has listed the Central Mackenzie as a focus area for its upstream operations.
In a September report to shareholders International Frontier said it will pay 5 percent of the gross well costs of about C$18 million to drill Big Bear K-71, testing a new structure about 3 miles from the B-44 well.
It said the decision to preserve title to the land was necessary before information is released on B-44.
International Frontier also said a preliminary estimate puts the cost of completing B-44 at C$16 million to provide extended production flow rates for one or more prospective reservoirs. The testing program is scheduled to start in January and last 80 days.
The company said this winter’s drilling and completion program “will be a major undertaking,” including construction of a 50-mile access road.
It cautioned that the timetable for B-44 testing and drilling K-71 will be tight because of uncertainty over the duration of the winter freeze-up.
