ARCHIVED - Bids Sought on Four Mackenzie Delta Parcels

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Bulletin
Volume 6, Number 2
May 1999

Postings Received

Following a call to industry for nominations which closed April 16,1999, bids are now invited on four land parcels on Crown lands in the Mackenzie Delta region of Canada's Northwest Territories. Lands being offered total 293 451 hectares (725 133 acres).

The single bidding criterion is the dollar value of exploration in the first five year period of the nine year term. The terms and conditions for the licences include a single well drilling requirement in the first period of the licence. Competitive generic royalty rates apply.

This is opportunity for industry to bid on lands with high exploration potential close to major gas fields at Taglu and Niglintgak and several other gas and oil discoveries onshore the Mackenzie Delta. These parcels are strategically placed for future offshore oil and gas development in the Beaufort Sea.

Total discovered resources of the Mackenzie Delta region are currently estimated by Canada's National Energy Board at 1.01 billion barrels (1.61 x 1010 m3) of oil and 9 trillion cubic feet (2.55 x 1011 m3) of gas (mean values). The Geological Survey of Canada place potential estimates of undiscovered resources at 5.39 billion barrels and 53.3 trillion cubic feet. Natural gas from the Beaufort-Mackenzie Basin is hosted in high productivity Tertiary and Cretaceous sandstone reservoirs.

About half of discovered Mackenzie Delta fields contain wet gas with significant condensate fractions. (Condensate resources from onshore Mackenzie Delta fields are estimated At 66 million barrels/10.7 x 106 m3.) The gas is sulphur free. The region is currently an untapped producing region with potential for high output and long term deliverability. The volume and quality of the resource is likely to signify in North American gas supply equations early in the next millenium.

Licences issued in this round will run until September 2008, subject to drilling commitments being met.

Parcel Descriptions

Parcels 1 to 3 adjoin or surround twelve existing onshore discoveries retained under significant discovery licences. Earlier this year, the National Energy Board (NEB) published estimates of discovered resources in these discoveries totalling 2.8 trillion cubic feet of gas (79.0 x 109 m3) and 70 million barrels of oil (11.2 x 106 m3) at the mean. The largest discoveries are Taglu (mean marketable gas resources of 58.6 x 109 m3) and Niglintgak (13.6 x 109 m3). The largest oil pool is Unipkat, drilled by Shell in 1990 and estimated by the NEB to contain 34 million barrels of oil ( 5.5 x 106 m3).

Map of the Beaufort Sea - Mackenzie Delta Parcels

Parcel 1

(72 474 ha) includes North Point on Richards Island and shallow offshore areas immediately to the west. The parcel abuts significant discovery licences over oil discoveries at Ivik K-54 and J-26, and includes onshore areas of Richards Island between existing discoveries at Taglu and Mallik. Parcel 1 lies west and northwest of existing exploration licence 384 issued to Husky Oil in 1997 for a nine year term.

The Mallik site has been of recent interest as the location of an internationally backed scientific research program to investigate gas hydrates. A test well was drilled as an offset to the existing Mallik gas discovery which tested natural gas from a deeper conventional reservoir.

Parcel 2

(73 155 ha) configured in an east-west strip is contiguous with the southern boundary of parcel 1. It includes lands bordering the Middle Channel, one of the principal distributaries of the Mackenzie Delta.

The block envelopes significant discoveries at Kumak and Yaya (P-53,A-28), and abuts Shells Niglintgak (gas) and Unipkat (oil) discoveries. The lands adjoin EL384 to the east and the southeast corner touches Inuvialuit lands.

Parcel 3

(72 311 ha) adjoins parcel 2 to the south and Inuvialuit lands (surface and subsurface) of the Inuvik block to the east. Inuvialuit surface-owned lands are included within the parcel along its eastern margin. Parcel 3 surrounds the gas discovery at Titalik K-26 and adjoins significant discoveries at Reindeer (gas) and Unipkat (oil and gas).

Parcel 4

(75 511 ha) is the most southerly parcel offered. It lies in a relatively little drilled area of the southern Mackenzie Delta between the Inuvik and Aklavik land blocks (surface and subsurface mineral rights held by the Inuvialuit). The eastern margin of the parcel is about 10 kilometres from the gas development at Ikhil, scheduled to start flowing gas to Inuvik later this year. The south edge of the block is about equidistant from the towns of Aklavik and Inuvik. A fringe of Inuvialuit surface lands are included within the parcel.

Bids must be received in the form specified in the Call for Bids document by Noon Mountain time, on September 9, 1999.

For the parcel winners, consultation with Inuvialuit organizations and the communities of Aklavik and Inuvik will be necessary on matters ranging from access across Inuvialuit lands, to determining environmental sensitivities and to the implementation of northern benefits requirements.

Inuvialuit Claim

Bidders should note that the Inuvialuit are an important land owner in the immediate vicinity of the blocks offered. Bidders are advised to familiarize themselves with the Inuvialuit Final Agreement which describes the rights of the Inuvialuit within the Inuvialuit Settlement Region.

The Inuvialuit claim was accepted for negotiation on May 13, 1976, and the final agreement, signed in June 1984, was effective July 1984.

The settlement provided the Inuvialuit with approximately 91,000 square kilometres of land (of which 13,000 square kilometres includes mineral rights). It also includes wildlife harvesting rights, socio-economic initiatives, and participation in wildlife and environmental management.

Reminder

Our last Bulletin contained an article on the National Energy Board's recently released estimates of resources by discovery for the Mackenzie Delta/Beaufort sea region. Reference: National Energy Board, 1998. Probabilistic estimate of hydrocarbon volumes in the Mackenzie Delta and Beaufort Sea discoveries. This reference is available on the National Energy Board's web site

For More Information on this Call

Please contact us by phone, fax or e-mail: the Director: Fortierm@ainc-inac.gc.ca

Rights Issuance: Desjardinsm@ainc-inac.gc.ca

Rights Administrator: Boothg@ainc-inac.gc.ca for information re financial requirements.

Geological and/or technical information is available from the Sr. Petroleum Geologist Morrellg@ainc-inac.gc.ca

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For further information

Call or write the Northern Oil and Gas Directorate, Natural Resources and Environment Branch, Indian and Northern Affairs Canada

Ottawa, Ontario Canada K1A 0H4

(This is the mailing address)

Fax: (819) 953-5828

Telephone: (819) 997-0878

Comments

Comments on this Northern Oil and Gas Bulletin and suggestions for future issues are welcomed. Please call or write: Director, Northern Oil and Gas, at the above noted address.

Telephone: (819) 997-0878

Fax: (819) 953-5828

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