ARCHIVED - 1996 Central Mackenzie Valley Call for Bids on Eleven Parcels
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Volume 3, Number 4
Strong Interest in the Central Mackenzie Valley
For the third year in a row, the Central Mackenzie Valley call for industry nominations attracted new posting requests. This year, the number of parcels offered has more than doubled compared to last year. The Northern Oil and Gas Directorate is inviting bids on eleven (11) parcels. The Call for Bids opens November 30,1996, and closes at noon Mountain Time, on May 1, 1997.
In 1994, five parcels were offered, resulting in two exploration licences issued in exchange for work proposals of $4,365,000. In 1995, all five parcels offered
resulted in exploration licences issued in exchange for work proposals of $9,343,000.
Parcel 1 lies in Peel Plain in the northwest of the call area. The parcel abuts existing Exploration Licences 373 and 374, and two areas of Gwich'in-owned
subsurface lands where the federal oil and gas legislation does not apply.
Parcel 2, lies in the northern part of the Great Bear Basin, northeast of the concentration of Colville Hills gas discoveries. Cambrian sandstones are the principal reservoir objective in this area and source rock studies suggest potential for oil as well as gas. Parcels 4, 5, and 6 which adjoin one another, lie in the central part of this Basin some 100 kilometres northeast of Norman Wells. In addition to the Paleozoic plays, the Cretaceous in this area offers some potential as both reservoir and source rock.
The remaining parcels lie in the Mackenzie Plain. All are close to existing facilities at Norman Wells. Parcel 3 lies west of Norman Wells and includes certain Sahtu-owned surface lands offered for the first time in this round of licencing. The parcel overlies part of the Carcajou reef complex, containing middle Devonian reef build-ups contemporary with the producing Norman Wells reef. Earlier wells recorded oil staining and some permeability in the middle Devonian section.
Parcel 7 surrounds existing Exploration Licence 375. This area is close to the Norman Wells field . The principal play comprises middle Devonian reefs and shoals, and oil-saturated fractured shales encountered at shallow depth and possibly in stacked thrust sheets up-dip from the Norman Wells field. The parcel touches Sahtu land parcel "M30" and the Kelly Lake exclusion zone at an irregular boundary.
Parcels 8 and 9 adjoin one another south and west of Norman Wells and abut the northern edge of existing Exploration Licences 372, 376 and 377. Parcel 8
borders the southern part of the Norman Wells proven area. Reef build-ups which have so far escaped detection on the coarse reconnaissance seismic shot to date form the most obvious exploration play in this area.
Parcels 10 and 11 lie southeast of existing licences 372 and 377. They surround two areas of Sahtu-owned subsurface lands where the federal oil and gas legislation does not apply. These parcels cover a highly structured area crossed by a major strike-slip fault. The East Mackay B-45 well recovered oil from fractured cherts of Cambrian age sourced from local source rocks of Cretaceous age. The structuring in this area of the Mackenzie Plain offers diverse combinations of source rock, reservoir and trap, making it highly prospective. It is also conveniently close to the Norman Wells oil pipeline.
Noon Closing Time
It should be noted that a new noon closing time (Mountain Time) has been instituted for Calls for Bids. Sealed bids must be delivered, either by registered mail or in person, at the Frontier Information Office of the National Energy Board located on the 6th floor, 311 - 6th Avenue S.W., Calgary, Alberta, T2P 3H2.
The NEB studies oil potential in the Central Mackenzie Valley
In June 1996, the National Energy Board (NEB) published an assessment of the gas potential of the southern Northwest and Yukon Territories entitled "A Natural Gas Resource Assessment of Southeast Yukon and Northwest Territories, Canada". The NEB is now close to completing a study of the oil and gas potential of the Central Mackenzie Valley (CMV) using similar methods.
The CMV covers more than 27 million hectares (equivalent to about 2900 Alberta Townships) and is underlain by sedimentary basins tested by only 236 exploratory wells. Four discoveries have been designated "significant" although other wells had oil or gas shows and surface seeps have been reported in the region. Discovered marketable gas in three discoveries in Colville Hills is 1.27 x 1010 cubic metres (0.45 trillion cubic feet at the mean), and the initial recoverable oil resource was 37.5 x 106 cubic metres (236 million barrels) at Norman Wells.
The NEB study identifies eleven exploration plays in three main petroleum systems. Two oil plays are considered proven - one in the Devonian Kee Scarp reefs draped by rich Canol shale source rock, and a second is associated with oil-prone Cretaceous source rocks overlying older porous units below the sub-Cretaceous unconformity. One gas play in the basal Cambrian Sands in the Colville Hills is considered proven but immature; all the other plays are considered immature or conceptual.
A key issue in developing a current realistic estimate of the petroleum resources of the CMV is how to give appropriate weight to the Norman Wells oil discovery. This has prompted a back-to-basics approach based on a regional play assessment and an analysis of the endowment using probabilistic methods based on productive rock volume. Unlike the southern Territories assessment, none of the plays in the CMV study area have sufficient discoveries to allow an estimate of the pool size distribution using the discovery process model developed by the Geologic Survey of Canada.
Previous estimates of potential for the CMV date back to 1984. Geological Survey of Canada Paper 83-31 gave an estimate of mean recoverable undiscovered potential of 500 million barrels of oil and 5 trillion cubic feet of gas (7 x 107 cubic metres of oil and 1.42 x 1011 cubic metres of gas). Preliminary indications from the new study suggest that an upward revision of oil and gas potential will be necessary -- for oil in the Mackenzie Plain area, northwest and southeast of Norman Wells, and for gas in both the Mackenzie Plain and Colville Hills. An incremental supply cost study based on this potential is now being carried out. The detailed results of this hydrocarbon potential study and the associated supply costs will be released by the National Energy Board early in the new year.
Sahtu lands -- digital files
Data files containing Sahtu land boundaries are now available from the Regional Surveys Office (Natural Resources Canada) in Yellowknife. These files permit accurate plotting of Sahtu land boundaries at a scale of 1:50 000 and should prove useful for companies planning to access work sites across Sahtu lands. These data files may be purchased separately or with other layers showing topographic information. Queries regarding cost, formatting and the preparation of customized data sets should be addressed to either Marie Robidoux at (403) 920-8295 or Nicola Triggs at (403) 669-3910.
Sahtu Service Directory
The Mackenzie Great Bear Development Impact Zone (DIZ - an economic development committee), has compiled a hand book of contractors and services in the Sahtu region. Copies may be obtained from Mr. Frank Pope, manager of the DIZ in Norman Wells (403)587-2324.
Educational Seminar on the CPRA
Companies operating or interested in operating in the Northwest Territories are invited to attend an educational seminar on the Management of Oil and Gas Resources in Canada's North. This one-day seminar, sponsored by the Canadian Association of Petroleum Landmen (CAPL), will be held in Calgary on March 13, 1997.
Staff of the Northern Oil and Gas Directorate, assisted by staff of the National Energy Board, will provide an overview of the northern sedimentary basins, examine the proposed new land management regime applicable in the Mackenzie Valley (the Mackenzie Valley Resource Management Act), provide a status on land claim settlement agreements, and review the petroleum resource management regime (the Canada Petroleum Resources Act) including a review of the royalty regime.
For registration, please contact Denise at the CAPL office in Calgary at (403) 237-6635.
Economics of Gas Development in the Southern Mackenzie Valley
On November 5, the Canadian Energy Research Institute (CERI) published a study entitled: The Economics of Natural Gas Development in the Southern Mackenzie Valley. It examines how natural gas exploration and development might unfold in the southern Mackenzie Valley.
The CERI work uses the results of the National Energy Board's June 1996 report: A Natural Gas Resource Assessment of Southeast Yukon and Northwest Territories, done with the Geological Survey of Canada. The NEB/GSC analysis led the Board to revise upward its estimate of undiscovered natural gas resources in the southern NWT and adjacent Yukon area by a factor of 12 (from 0.5 Tcf to 6 Tcf; approximately 1.5 to 17 x 1010 cubic metres). The NEB report is available from the Board by contacting (403) 292-4800.
CERI examined various alternative scenarios which differ by the region's gas resource potential and the land available to industry for exploration.
CERI estimates capital spending on natural gas exploration and development ranging between $57 million and $300 million would result in discoveries of gas reserves which in the high case exceed 500 Bcf, yielding new gas production of 170 million cubic feet per day. The study takes into account the gas in only 10 established plays; upside potential might exist if 13 additional immature and conceptual plays are considered.
CERI calculates that the activity in the scenarios would increase the Gross Domestic Product of the territories by between $34 million and $159 million. It would also create between 543 and 2769 person-years of employment spread over the next 12 years. There would be opportunities both for northern businesses and communities and for skilled gas industry personnel from southern Canada.
The publication also provides perspectives on the history of petroleum activity in the southern Mackenzie Valley and the capabilities of local infrastructure and businesses to support the industry's activities. The study may be purchased from the Institute by contacting (403) 282-1231.
Please note that some forms which are required for the completion of various transactions under the Frontier Lands Registration Regulations have been amended to reflect the addition of effective dates and execution dates. For more information or copies of the amended forms please contact the Registrar either by Fax (819) 953-5828 or calling (819) 953-8490.
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