Paramount makes headway in NWT

Company brings new oil and gas production on, acquires land

Gary Park

Petroleum News Calgary Correspondent

Paramount Resources is continuing to extend its footprint in the Northwest Territories, bringing oil and natural gas wells into production, engaging in one of the region’s most active drilling programs and building a land base at the Arctic Circle.

The Calgary-based company reported May 15 that new wells are being brought on stream in the lower Northwest Territories, with oil production from Cameron Hills and gas from the Chevron et al Liard 2K-29 (I-40) Nahanni well.

With completion of a C$5 million oil processing plant at Cameron Hills, oil started flowing on April 7, although operational snags have delayed achieving the 1,500 barrels per day target until mid-May.

The Nahanni well flowed at 30 million cubic feet per day on production test and came into production at 20 million cubic feet per day at the end of April.

At Colville Lake at the Arctic Circle, Paramount has acquired about 650,000 acres over three years, believing the area has “significant potential for large-scale gas and condensate reserves.”

Having taken on Apache Canada as a 50 percent partner for all of its Colville Lake lands, Paramount participated in two wells of about 4,750 feet each at the Nogha prospect.

The first, Nogha C-49, was drilled, cased and completed as a gas well and Nogha M-17 was drilled and cased, although completion was suspended due to spring thaw.

The Paramount-Apache partnership also purchased and reprocessed two-dimensional trade seismic data at the Nogha Block and carried out a 2D survey over about 100 miles of a federal exploration license.

The data will be evaluated this spring to define future drilling locations.

Anadarko Canada also drilling

Two were suspended because of spring break-up and three will resume drilling next season once freeze-up permits access to the site.

Of the remaining wells, three have been classified as gas discoveries. Two wells discovered hydrocarbons and require further evaluation ands one shallow gas well was abandoned.

Anadarko and Paramount have submitted applications to the National Energy Board for six significant discovery licenses.

Under a 2002 farm-out in the Liard area, Anadarko shot a three-dimensional seismic survey over a federal exploration license last year and spud the Liard P-16 well in February.

The well reached a total depth of 10,250 feet and encountered gas within the Nahanni formation.

Anadarko now plans to test the capability of the well once spring break-up ends.

Following its sale of northeastern Alberta assets to Paramount Energy Trust in February, Paramount is forecasting 2003 production from the NWT, Alberta, Saskatchewan, Montana and North Dakota of up to 160 million cubic feet per day of gas and 7,000 barrels of oil, generating cash flow of about C$200 million.

Its capital spending program for the year is C$150 million-$175 million.

The company views itself as a growth-oriented intermediate producer, focused on upstream oil and gas and holding 3.6 million acres of undeveloped land.