An earlier-than-usual Mackenzie Delta/Beaufort Sea freeze-up has put the final piece in place that allows a Chevron Canada Resources-BP Canada Energy partnership to lead off this winter’s program in Canada’s North that could see up to a dozen wells drilled.
Having already barged equipment and supplies to the drill site, operator Chevron hopes by Dec. 21 to spud the exploratory Olivier H-1 gas well, about 60 miles northwest of Inuvik, Northwest Territories.
Exploration License 422 was acquired in mid-2004 with a work expenditure bid of C$62 million, including a C$15.5 million deposit.
Chevron is not disclosing the targeted well depth or the projected drilling time.
But spokesman Dave Pommer told Petroleum News that the company hopes to build a long-term business in the region given that the North American gas outlook suggest the Delta will be a source of needed supplies.
He said Chevron is also encouraged that progress is being made on the Mackenzie Gas Project, with the recent filing of regulatory applications for a Mackenzie Valley pipeline.
Barge in place to house employees
To gain an early start on the winter drilling, the company has already towed the John Wurmlinger barge from Vancouver to the Beaufort Sea, where it is anchored less than a mile from the well site and will house 40 employees.
Purpose built for the Beaufort in the 1980s, it is operated by a Northwest Territories-based company, Beaufort Oilfield Support Services, and its BOSS Marine operations.
The barge, backed by 14 support vessels, allows an early start on ice road construction and stretches the drilling window by more than seven weeks, Pommer said.
Chevron also has a license for the Olivier H-2 well, but plans only one well this winter.
Seismic acquisition also planned
However, it is ready to proceed with two 3-D seismic programs when regulatory approvals are obtained. One, including significant discovery licenses, will cover about 27 square miles at Garry Island in partnership with ConocoPhillips Canada, Mosbacher Operations, Arctic Coast Petroleums and Nytis Exploration.
The other, a joint undertaking by Chevron Canada and BP Canada, is a 52-square-mile program at Cape Farewell.
Rod Maier, Chevron’s northern program manager, told a forum in October that the company expects to spend about C$100 million in the Delta this winter.
Group committed to C$900 million on license work
Chevron and BP are two of seven companies making up the Mackenzie Delta Explorers Group, which has collectively committed to spending C$900 million on exploration licenses.
Exploration success by the group is vital to helping the Aboriginal Pipeline Group gain a one-third equity stake in the pipeline by securing volumes of up to 400 million cubic feet from E&P companies outside the main Delta gas owners, Imperial Oil, ConocoPhillips, Shell Canada and ExxonMobil Canada.
Chevron, with BP and Burlington Resources as partners, made a breakthrough two winters ago with their North Langley K-30 discovery that tested at a restricted 18 million cubic feet per day.
A dozen winter wells in works
For the entire Northwest Territories, Canada’s National Energy Board is counting on about a dozen winter wells from the Delta to the Central Mackenzie Valley and Fort Liard in the lower Northwest Territories.
Activities are expected to include:
• EnCana, with Anadarko Canada and ConocoPhillips as partners, drilled the Umiak N-16 well to a depth of about 10,200 feet in early 2004 at Richard’s Island and it will be tested this winter to assess its commercial value. The same partners are gearing up to spud the Umiak N-5 well in the Burnt Lake area of the Delta before year’s end.
• Having acquired Fort Liard assets earlier this year from ChevronTexaco, Paramount Resources re-entered the K-29 gas discovery a month ago.
• Purcell Energy has obtained a drilling rig and now needs partner approval to proceed with the E-25 well at Fort Liard some time in 2005.
• Devlan Exploration was unable to find commercial hydrocarbons after drilling its Moose Lake D-07 well to a depth of almost 3,000 feet in late summer, but plans to use the site 165 miles northwest of Norman Wells as a staging area for future activities, starting with a seismic program. It believes the Grandview Hills area has the potential for accumulations of 100 million barrels of oil and gas finds in the 1 trillion cubic foot range.
• Northrock Resources drilled the Summit Creek B-44 wildcat earlier this year about 50 miles south of Norman Wells. The well was logged, drill-stem tested and production cased to a total depth of almost 10,000 feet. International Frontier Resources, with a 5 percent stake in the well, has disclosed plans to conduct extended production testing at a cost of up to C$17.5 million starting in January. International also intends to participate in an 11,800-foot well in January at the Big Bear prospect to test three formations at a cost of about C$19 million.
