ARCHIVED - Exploration Rights Available for 8 Parcels in the Southern N.W.T.

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Bulletin
Volume 2, Number 6
December 1995

Bidding Opens in Fort Liard Area

A Call for Bids for oil and gas exploration rights in the Fort Liard area of the Northwest Territories opens on December 9, 1995 and closes April 9, 1996.

Bids are invited for exploration rights to eight parcels totalling 196,658 hectares (approximately 756 square miles).

This is the second consecutive year that a call for bids is being held in this region. Last year, the bidding process attracted work proposal bids totalling $22.7 million on eight parcels comprising some 150,000 hectares. Exploration licences (EL) were awarded to Amoco, Chevron, Ocelot, Paramount, Ranger and Shell.

Winning bidders are selected based on the amount they propose to spend doing exploratory work on the parcel during the first four years of the term. The minimum value of "work proposals" for any parcel selected is $1 million, secured by a refundable work deposit representing 25% of the amount bid.

Exploration licences will be issued for a term of seven years, consisting of two consecutive periods of four and three years each. The drilling of a well during the first four years qualifies the licence holder to retain the licence for another three years, whether or not the total amount bid has been spent.

An exploration licence confers the exclusive right to drill and test for petroleum. Successful exploratory drilling during the term of the licence entitles the explorer to apply for and receive a significant discovery licence or a production licence.

Exploration History of Parcels

Parcels 1 and 2 lie within the mountains west of the Liard River, some 20 km northwest of the Pointed Mountain gas field and 10 km east of the significant gas discovery at Labiche F-08 (estimated at 18 bcf within wide confidence limits). The parcels overlie the northward continuation of the Kotaneelee syncline and are likely to contain undrilled structural cumulations parallel and east of the Labiche structure. This block has good potential for large gas pools in Manetoe dolomites, in the same play as the Pointed Mountain and Kotaneelee discoveries (initial recoverable reserves of 360 bcf and 175 bcf respectively).

Parcels 3, 4 and 5 lie within the deeper Liard Basin west of EL 369 issued to Shell earlier this year for a work proposal bid of $8.7 million, east of EL 366 allocated to Chevron for $1.2 million, and south of EL 365 alloted to Ocelot for $1.5 million. Parcel 4 includes the townsite of Fort Liard itself, the centre of operations for the area. Access to these parcels is facilitated by the Liard Highway east of the Liard and Petitot rivers. The terrain is low relief, with the exception of the incised canyon of the Petitot River, and densely forested.

No wells have been drilled within these parcels although discoveries have been made up-dip at Bovie Lake and Arrowhead to the east, and in the Liard anticline to the west. Parcel 4 lies south and on trend with the axis of the Liard Anticline and faulting at surface may indicate subsurface fault bounded traps on the eastern limb of the Liard syncline as it rises towards the Bovie anticline. In all parcels, there is good potential for oil within the Cretaceous section, and potential reservoirs exist in Flett limestones and Mattson sandstones of the Mississippian which are preserved within this deeper part of the basin. These units overlie the Exshaw shale, a rich oil-prone source rock although generating gas at this depth in the basin. Deep thrust-related structures may be present at depth within the middle Devonian section, displaced to the east of the surface expression of the Liard anticline.

Parcel 6 overlies the northward trend of the Bovie Lake fault where it intersects the Presqu'ile barrier in the Arrowhead Salient. western nose of the middle Devonian The parcel lies between ELs 367 and 369 to the north and south; these Els were issued to Shell for work proposal bids of $1.7 million and $8.7 million respectively. The terrain is low relief, forested with muskeg and few rock outcrops. The parcel may be accessed from the Liard Highway some 15 km to the west.

Principle objectives in this area are barrier reef facies in the middle Devonian Slave Point and white crystalline Manetoe dolomite within the underlying Keg River platform (Nahanni). Four Arrowhead wells have been drilled within the parcel, two with good gas shows in the Manetoe. Arrowhead G-69, immediately north of the parcel, encountered 5 m of net pay (7% porosity) within the Manetoe facies. Although only 2 bcf are assigned to this pool, larger accumulations are likely in combined porosity/structure traps. One designated significant discovery at Arrowhead B-41 borders the parcel on its eastern side. This well tested oil from Lower Cretaceous Scatter sandstones. Other oil accumulations within this reservoir in potentially thick pay sections are likely, within incised fluvial, valley fill and fluvio-deltaic sandstone bodies.

Within a radius of about 50 km from parcels 1 through 6 is the pipeline which connects the Pointed Mountain gas field to the Westcoast Transmission system in B.C. This pipeline also connects the producing Kotaneelee field in Yukon and the Beaver River field in B.C.

Parcels 7 and 8 lie in the southeastern quarter of the Ford Liard block, about 30 km northeast of the Liard Highway. The parcels fall within an undrilled sector of the Arrowhead salient north of the Celibeta gas discovery. Celibeta No. 2 (H-78), drilled in 1969, discovered 3 bcf of gas in karsted Slave Point limestone on the crest of the Celibeta high. This anticline is a high relief element of the Devonian Tathlina Arch. The crest is traversed from southwest to northeast by faults which create a horst and graben topography with differential erosion across the blocks. Comparable structural targets may be anticipated along the trend of faulting to the northeast. Potential reservoirs are carbonates comprising the back-barrier zones of the Middle Devonian Presqu'ile Barrier reef complex (upper Elk Point and lower Beaverhill Lake groups), and the barrier reef trend of the Upper Devonian Jean Marie carbonates (Winterburn Group). The area is also traversed by zones of Mississippian subcrop with potential for stratigraphic traps.

Activity

Six seismic programs totalling nearly 700 km have been shot in the Fort Liard area since the issuance of eight exploration licences in January 1995. Of this total, 310 km were shot as exclusive data to evaluate specific areas under licence. The remaining lines are non-exclusive (available for purchase), comprising longer lines suitable for regional evaluation. More detailed prospect-specific programs may be anticipated for the upcoming season.

Three industry-operated field parties were active over the summer examining outcrops in the Fort Liard area. In addition, the Geological Survey of Canada led a group of industry geologists to examine the spectacular outcrops of the Manetoe Facies exposed in the gorge of the Nahanni River, just to the north of the Fort Liard call area. This excursion, led by Dave Morrow and Tim Bird, was enthusiastically received and seems destined to be become an annual event!

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