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Bulletin
Volume 5, Number 2
July 1998

The 1997/98 winter operating season has been the busiest the North has seen for many years. Exploration was focussed on exploration licences issued since 1995 in the southern Northwest Territories and in the central Mackenzie Valley.

Companies Announce Gas Finds Near Fort Liard

In the Fort Liard area, three new wells were commenced early this year in addition to the four wells spudded in 1997. Active operators include Paramount (five wells), Ranger (two deep wells drilled from the P-66 location), and Ocelot (one well).

Ranger have announced that their P-66A well on Exploration Licence 363 was a gas discovery. According to the company, the geological structure holds at least 200 billion cubic feet (bcf.) and potentially as much as 600 bcf., making it comparable in size to Amoco's Pointed Mountain field 25 km to the southwest. Pointed Mountain has been producing gas, shipped through the Westcoast system, since 1972. To develop the field, Ranger will need to build a pipeline to connect to the current terminus at Pointed Mountain.

Paramount Resources have announced that their Arrowhead N-65 well on Shell's EL383 was a gas well with flow rates of 28 million cubic feet per day. The company also tested gas from a 58m zone in their Bovie C-76 well. Evaluation of both these finds will continue next season. Paramount's three other wells were curtailed by deteriorating land conditions in late March owing to an unusually warm spring. The wells have been suspended for probable re-entry next year.

With all this exploration activity, the ACHO DENE KOE Band-owned Liard Valley Band Development Corporation has been successfully pursuing exploration related business and employment opportunities. In the past year, the corporation achieved gross revenues of approximately $5 million. Over the first quarter of 1998, Fort Liard area oil and gas employment exceeded 80 workers, with the majority of these being band members or northern residents.

This summer is likely to see continuing activity in the Fort Liard area as companies prepare for two planned seismic exploration programs. These programs will take place across the rugged foothills north of Fort Liard. Heli-portable techniques for moving equipment will keep environmental disturbance to a minimum.

Taken with the need to re-enter many of the wells begun this season, and the likelihood that companies are planning further exploratory and possible field delineation wells, it seems likely that the 98/99 drilling season will match or surpass the past season in terms of drilling activity.

Certainly the early drilling success is encouraging and serves to reduce the perceived exploration risk on at least two of the gas plays near Fort Liard. The new discoveries announced by Ranger and Paramount build on earlier finds to consolidate a geological picture of two rich exploration fairways in the Fort Liard area which extend into the area from Yukon to the southwest and from the Maxhamish Lake area of northeastern British Columbia.

Central Mackenzie Valley Also Active

Three wells were also spudded by Ranger in the central Mackenzie Valley southeast of Norman Wells. These wells are located on each of Ranger's three exploration licences in the area. Unfortunately, the company reports that the Bear Rock O-20 well on Exploration Licence 377 was junked and abandoned at shallow depth and failed to test the target. This well will likely have to be re-drilled next season. Ranger et al Little Bear M-39 on Exploration Licence 372 was suspended before reaching planned depth due to an early spring thaw.

The company also reported testing the Nota Creek C-17 well on Exploration Licence 390. This testing program was not completed and the company plans to re-enter the well.

The single well drilled by Murphy Oil on Exploration Licence 375 in 1997 was plugged and abandoned.

Two seismic operations were also conducted in this area in the spring by International Frontier Resources (holder of Exploration Licence 391 southwest of Tulita), and by Cascade on Exploration Licence 389. The International Frontier program finished on April 26, 1998 and was the final oil and gas activity on northern lands for this 97/98 winter operating season.

Over the past winter and spring, the Norman Wells-Tulita area experienced significant oil and gas related employment and business opportunities which are expected to grow in future years.

Elsewhere

Oil and gas activities were not restricted to the above areas.

On the Mackenzie Delta, the Inuvialuit Petroleum Corporation re-entered the discovery well on the Ikhil gas discovery to evaluate the well for production. The company also drilled two nearby wells – the Ikhil J-35 field delineation well, and an exploratory well at Ikhil N-26. This drilling program follows from IPC's approved plan for developing the discovery and producing gas for distribution and power generation in nearby Inuvik.

In the Eagle Plain (Yukon), Northern Cross Yukon Ltd. re-entered, tested and suspended two wells first drilled in 1967 at the Chance Oil discovery a few kilometres west of the Dempster Highway. The tests will help the company confirm the potential for developing the oil reserves in this discovery.

Website Updates

Recently the Northern Oil and Gas world wide web site was changed to provide improved access to oil and gas rights information. A summary of recent drilling is provided on our website as well.

Oil and Gas Rights Digital Files

Fields include Title, Representative, Region, Issuance Date, Expiry Date, and Size.

Oil and Gas Disposition Maps

In addition, rights information is now available in the form of disposition maps,which illustrate the position of rights relative to each other and to geographic features.

Oil and Gas Dispositions Maps - Cameron Hills

Annual Report 1997

The Northern Oil and Gas Annual Report, was tabled in Parliament in May. The report is available from our website as one of the updates. Hard copies are available also and may be requested by contacting Marlene Desjardins by phone at (819) 953-8529 or by sending a fax to (819) 953-5828.

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