Northern Canada exploration ends low-key winter, despite major gas find

Petro-Canada/Devon discovery being assessed against three earlier failures to determine next moves; other exploration results and winter plans still under wraps

Gary Park

PNA Canadian Correspondent

With the future of northern Canada hanging in the balance, pending development and pipeline decisions, another blotch has surfaced on the horizon.

Other than the breakthrough natural gas find in the Mackenzie Delta by the partnership of Devon Canada Corp. and Petro-Canada, results have been meager from a just-concluded winter drilling program consisting of only four exploration wells, down from seven in the 2000-01 season.

Devon and Petro-Canada seized the headlines with the Delta’s first gas discovery in 30 years, but is taking a cautious line in developing its plans for the coming winter.

Petro-Canada chief executive officer Ron Brenneman said the joint venture needs the summer to “understand what we’ve been successful at,” why it had failed with three earlier wells and what its next moves will be.

Anadarko may releases results in June

EOG Resources Canada Inc. and a number of partners drilled to about 8,180 feet in the Northwest Territories, about 22 miles west of the producing oilfield at Norman Wells.

The well was rig-released in mid-March and listed as dry. Beyond that EOG said it needs time to evaluate the information provided by the well before deciding on a plan for the 2002-03 winter, but it has indicated that another exploration well is unlikely.

EOG, along with Anadarko Canada Energy Ltd., Duvernay Oil Corp., Northrock Resources Ltd. and Pacific Rodera Ventures Inc., has an interest in four other northern exploration blocks in the Bovie Creek area.

Anadarko said it may release by mid-June results from its Netla A-68 exploration well drilled to 6,670 feet and rig-released in mid-March.

Anadarko also has an interest in the Bovie J-76 and F-66 test holes drilled by Paramount Resources Ltd. which Canada’s National Energy Board lists as development holes.

The Bovie project area in the Northwest Territories is about 20 miles north of the British Columbia border and has been estimated by Paramount to have reserve potential of 100 billion to 200 billion cubic feet, with deliverability up to 20 million cubic feet per day. Production is expected in April 2004.

Paramount had planned a winter exploratory well in the Colville lake area of the Mackenzie Valley, but postponed those plans to the 2003 season.

Seismic shot in Fort Liard area

Anadarko has indicated it will drill a test well next winter season with the potential to earn an interest, via rolling options, in up to 71,000 acres.

In the Mackenzie Delta/Beaufort Sea region, Anadarko participated in two winter seismic programs. It holds about 400,00 net acres and started acquiring 130 square-miles of seismic in January covering a block where Anadarko had a 37.5 percent interest and its partners Alberta Energy Co. Ltd. and Conoco Canada Ltd. conducted a two-dimensional seismic survey over 620 miles in early 2001.

Calgary-based Devlan Exploration Inc. took a break after drilling three exploration wells in the 2000-01 winter to develop a program to complete the wells in 2002-03 and drill a deeper pool test.

In the meantime, Devlan has completed a survey of its exploration licenses and nearby land parcels, as well as purchasing a new license covering 201,160 acres.

Amid this quiet period, there is hope, with Canadian Natural Resources Ltd. announcing that it will look to the Mackenzie Valley to boost its gas reserves.

Chairman Allan Markin said the first test wells will be drilled near Colville Lake in the Northwest Territories in the coming winter at a shallow prospect the company believes may hold 200 billion to 300 billion cubic feet.

Markin said the company is confident a pipeline will be built from the Delta, regardless of concerns that U.S. tax credits could strand the resource, and suggested a start-up is possible in the 2007-2010 period.