Canada’s URs Offer Opportunities

Canada’s unconventional resources continue to excite the imaginations of geoscientists, as Canadian companies – with operators and investors from North America, India and Southeast Asia – are doggedly working to unlock the country’s unconventional resource play potential.

Resource plays represent significant new opportunities to expand production across Canada:

  • Repeated successes in the Horn River and Montney formations in British Columbia are supported and encouraged by established governmental regulation and incentive programs, pipeline infrastructure and a planned export facility connecting western Canada production to markets in Asia.
  • Additional shale-gas resource plays are being evaluated in the Devonian Duvernay of central Alberta, and Exshaw in southern Alberta, both of which have oil potential.
  • In Eastern Canada, the Ordovician Utica Shale and the Mississippian Albert Formation in New Brunswick are getting attention.
Where the Action Is

Although not the first region to capture new reserves from the Devonian Bakken Formation, Canada is continuing to develop new technologies and concepts to maximize recovery from this huge and prolific resource play.

Production in January averaged 75,000 boepd from 1,776 wells in Saskatchewan, where test water-flood/pressure maintenance schemes have demonstrated increased hydrocarbon recoveries.

However, it is not only the Bakken that has captured the attention of small and large exploration companies – new resource plays are consistently being identified and exploited. To date, these include:

  • Numerous oil projects, such as the Cretaceous Cardium and Viking Formations, plus the Jurassic Nordegg, Shaunavon and Amaranth Formations, along with Devonian Swan Hills and Pekisko reefs.
  • Liquid-rich gas projects include the Triassic Montney, along with the Cretaceous Glauconite, Bluesky, Wilrich, Nikanassin and Notikewin formations.

Shale gas exploitation in British Columbia’s Horn River Basin has been on-going for several years. Here, the Devonian Muskwa and Otter Park shales are the main targets.

This Devonian interval – if the Cordova Embayment and extensions into the Northwest Territories are included – is potentially the largest shale-gas resource in North America.

As in most shale gas plays, horizontal well completions along with multi-stage fracture stimulations are the key to effective recoveries, with typical completion costs topping $9 million (C), according to the Daily Oil Bulletin. Initial production rates can exceed 10 mmcf/d.

If land sale prices are any indication, interest remains high in Canadian shale gas resource plays despite depressed North American natural gas prices. In fact, in 2010 British Columbia recorded its fourth-highest annual land bonus ever. The record-setting bonus totaled $844.4 million (C) for 381,132 hectares – an average of $2,215 per hectare.

The 2010 bonus followed on the heels of a 2009 bonus of $892.9 million for 389,664 hectares – in this case, an average price of $2,291 per hectare. Top bids have exceeded $5,000 per hectare.

Many operators have indicated a reduction in drilling activity in the basin, however, as a result of low gas prices.

Gaining Momentum

The Triassic Montney tight gas play of northeastern British Columbia and North central Alberta continues to be attractive due to its generally shallower depths and, in some areas, higher natural gas liquids (NGL) content.

This play varies, from traditional “shale-gas” along the Alberta/British Columbia border to tight calcareous siltsone and sandstone in central Alberta.

In Alberta, more than 400 horizontal wells, most with multi-stage hydraulic fracture stimulations, have been drilled since January 2008. As in the Horn River Basin shales, the Montney can be quite prolific, with initial production rates exceeding 10 mmcf/d.

Current production is 1.36 bcfe/d from 749 wells.

The Cretaceous Cardium tight-sand oil resource play in central Alberta has gained real momentum following some early miscues after numerous un-economic horizontal wells were drilled.

The majority of successes there have been along the flanks of Canada’s largest oil field at Pembina, with conventional reserves estimated at 7.8 billion barrels of oil-in-place.

Since the first well was drilled there in December 2009, over 370 wells have been rig-released on the field’s flanks. Production in November 2010 averaged 22,000 boepd from 213 wells.

“Efforts are under way in Alberta to update resource-appraisal and forecasting methods for both conventional and unconventional resources,” said AAPG member Fran Hein, chief geologist for the Energy Resources Conservation Board of Alberta, “and to move the regulatory framework to a play-based approach.”

Eastern Expansion

Moving eastward, finding economically viable prospects means solving new challenges. And the exact combination of drilling and completion methods needed to yield economic oil and gas production from unconventional resource plays can be elusive – particularly completion methods that yield consistent replicable results.

Canada’s newest shale gas plays are found in the eastern Canadian provinces of Quebec, New Brunswick and Nova Scotia.

Early estimates of recoverable gas in place from the Utica Shale in Quebec bode well for the economic viability of this emerging resource play.

Challenges, however, remain. Since the January 2010 EXPLORER article by correspondent (and AAPG member) Susan Eaton on Quebec’s exciting Utica shale gas trend, Quebec has yet to implement environmental regulations.

Some advancement toward regulation was made at the end of August, when Quebec’s minister of Sustainable Development, Environment and Parks mandated BAPE (Bureau d’audiences publiques sur l’environnement – Public hearings on the Environment Board) to propose a new regulatory framework for shale gas exploration and development in the province.

The impact on industry activity was felt by mid-January, when Questerre Energy Corporation delayed its Utica shale gas development program in the St. Lawrence Lowlands of Quebec, pending receipt of the BAPE regulations.

Release of the regulations was anticipated by end of February.

Any offshore drilling and assessment of Quebec’s resource potential will likely be delayed even longer. At present, there is a moratorium on oil and gas exploration in the Gulf of St. Lawrence pending a federal government review.

Comments (0)


Regions and Sections

Regions and Sections Column - Carol McGowen
Carol Cain McGowen is the development manager for AAPG's Regions and Sections. She may be contacted via email , or telephone at 1-918-560-9403.

Regions and Sections Column

Regions and Sections is a regular column in the EXPLORER offering news for and about AAPG's six international Regions and six U.S. Sections. News items, press releases and other information should be submitted via email or to: EXPLORER - Regions and Sections, P.O. Box 979, Tulsa, OK 74101. 

View column archives

See Also: Book

Desktop /Portals/0/images/_site/AAPG-newlogo-vertical-morepadding.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 4550 Book

See Also: Bulletin Article

Understanding the distribution and geometry of reservoir geobodies is crucial for net-to-gross estimates and to model subsurface flow. This article focuses on the process of dolomitization and resulting geometry of diagenetic geobodies in an outcrop of Jurassic host rocks from northern Oman. Field and petrographic data show that a first phase of stratabound dolomite is crosscut by a second phase of fault-related dolomite. The stratabound dolomite geobodies are laterally continuous for at least several hundreds of meters (sim1000 ft) and probably regionally and are one-half meter (1.6 ft) thick. Based on petrography and geochemistry, a process of seepage reflux of mesosaline or hypersaline fluids during the early stages of burial diagenesis is proposed for the formation of the stratabound dolomite. In contrast, the fault-related dolomite geobodies are trending along a fault that can be followed for at least 100 m (328 ft) and vary in width from a few tens of centimeters to as much as 10 m (sim1–33 ft). Petrography, geochemistry, and high homogenization temperature of fluid inclusions all point to the formation of the dolomite along a normal fault under deep burial conditions during the Middle to Late Cretaceous. The high 87Sr/86Sr ratio in the dolomite and the high salinity measured in fluid inclusions indicate that the dolomitizing fluids are deep basinal brines that interacted with crystalline basement. The dolomitization styles have an impact on the dimension, texture, and geochemistry of the different dolomite geobodies, and a modified classification scheme (compared to the one from Jung and Aigner, 2012) is proposed to incorporate diagenetic geobodies in future reservoir modeling.
Desktop /Portals/0/PackFlashItemImages/WebReady/linking-process-dimension-texture-and-geochemistry.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 3772 Bulletin Article

See Also: DL Abstract

IODP Expedition 313 (New Jersey shallow shelf) cored a 3-hole transect across Miocene seismic clinothems (prograding sigmoidal sequences) in topset, foreset, and bottomset locations, providing an opportunity to integrate seismic, log, and core data into a sequence stratigraphic framework. Our interpretations of sequences and systems tracts are made independent of any preconceived relative sea-level curves. Rather, we use basic seismic, core, and stratigraphic principles to recognize sequence boundaries, Maximum Flooding Surface, transgressive surfaces, and facies successions within sequences.

Desktop /Portals/0/PackFlashItemImages/WebReady/sequence-stratigraphy-of-new-jersey-miocene-transect-hero.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 11667 DL Abstract

See Also: Online Certificate Course

Unconventional Resources is an online course that enables participants to learn about shale gas, shale oil and coalbed methane.

Desktop /Portals/0/PackFlashItemImages/WebReady/oc-cc-unconventional-resources.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 1473 Online Certificate Course

See Also: Online e Symposium

Gas hydrates, ice-like substances composed of water and gas molecules (methane, ethane, propane, etc.), occur in permafrost areas and in deep water marine environments.

Desktop /Portals/0/PackFlashItemImages/WebReady/oc-es-predicting-gas-hydrates.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 1441 Online e-Symposium