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Devon, Petro-Canada score first ‘significant’ gas discovery in Mackenzie Delta in 30 years
Gary Park, PNA Canadian correspondent
Devon Energy Canada Corp. and Petro-Canada have made a quick breakthrough on the Mackenzie Delta, reporting the first significant gas discovery in the area in 30 years.
With recoverable reserve potential up to 300 billion cubic feet, the find gives an added lift to hopes of bringing the Delta into commercial production.
The Devon-operated partnership said the Tuk M-18 field delineation well, about 15 miles south of Tuktoyaktuk, was drilled to 9,850 feet and tested at restricted rates up to 30 million cubic feet per day, with sustained deliverability rate at 60 million to 80 million cubic feet per day, or 30 times the average well.
Devon Canada President John Richels said in a statement that Tuk M-18 “firmly establishes Devon and Petro-Canada as legitimate Mackenzie Delta producers with proven reserves.”
The last gas discoveries in Canada’s Arctic were by Gulf Canada Resources Ltd. (now Conoco Canada Inc.) which made the 1.8 trillion cubic foot Parsons Lake find in 1972 and Imperial Oil Ltd.’s discovery of the 3 trillion cubic foot Taglu field in 1971. M-18 trouble-free Brian Kergan, Devon Canada’s engineering manager for frontiers, said drilling M-18 was trouble-free, coming in ahead of schedule, under budget and using technologies that were not previously available. The partner companies have used purpose-built rigs owned by Akita/Equtak Drilling Ltd., a joint partnership of the Inuvialuit Development Corp. and Akita Drilling Ltd.
Of the three other wells drilled by the partner companies over the last two winters, Kurk M-15 reported gas shows after reaching a depth of 10,100 feet, but not in “commercially viable quantities”; Tuk B-02 encountered hydrocarbons, but was abandoned following drilling and testing; and Kugpik L-46 was unsuccessful.
But Graeme Phipps, Petro-Canada’s vice-president of exploration, said the wells “advanced our knowledge of the regional prospectivity, which will benefit our future drilling program.
“Chances of success are always less with wildcat wells, but we’re still confident in the area’s gas potential,” he said. More than 1 million acres Devon and Petro-Canada are now turning their attention to next winter’s drilling and exploration program and the overall objective of establishing enough reserves to secure space in any pipeline out of the region.
Devon, which inherited its Delta interest from its takeover last year of Anderson Exploration, and Petro-Canada hold combined rights to more than 1 million acres of exploration leases — the largest landholding in the region — and gathered seismic data from about 173,000 acres.
But they operate outside the Mackenzie Delta Producers Group — Imperial Oil Ltd., Shell Canada Ltd., Conoco Canada Inc. and ExxonMobil Canada — which announced in February it was embarking on the C$250 million project definition phase as a possible build-up to filing regulatory applications to bring their combined 5.8 trillion cubic feet of reserves into production as early as 2008.
Initial volumes from the group would be 800 million and 1 billion cubic feet per day, with the prospect of the Mackenzie Valley Aboriginal Pipeline Corp. taking a one-third Native equity stake in a pipeline if it can secure another 500 million cubic feet per day in supplies from producers outside the Delta group. Others shooting seismic In addition to Devon and Petro-Canada, attention is focused on a partnership of Chevron Canada Resources, BP Canada Energy Co. and Burlington Resources Canada Energy Ltd., which has previously indicated its intention to drill exploration wells next winter without yet announcing detailed plans. To date the three companies have spent the past two winters gathering seismic data, which is now being evaluated.
Other exploration and discovery license holders in the Delta, where total drilling commitments stand at about C$650 million (US$416 million), are EnCana Corp., Anadarko Petroleum Corp., Canadian Natural Resources Ltd., Canadian Forest Oil Ltd. Murphy Oil Co. , Paramount Resources Ltd. and Suncor Energy Inc.
With two-thirds of the gas resources in the Western Canada Sedimentary Basin, Canada’s dominant supply source, either booked as reserves or produced, northern Canada — where estimates of total potential resources are as high as 172 trillion — is poised to become a major new petroleum region.
Gerry Reinson, of Reinson Consultants, told a recent conference in Calgary that a gas pipeline along the Mackenzie River Valley could be the spur to new discoveries in the Northwest Territories and Yukon.
Once the infrastructure is in place areas such as Peel Plain, with an estimated potential of 4.4 trillion cubic feet; Eagle Plain, with 1 trillion cubic feet; and the producing Fort Liard field of the lower Northwest Territories, could be “highly economical,” he said.
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