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For the first time in 25 years, industry is invited to select, through a Call for Nominations, parcels that might be of interest to them in the Mackenzie Valley of the Northwest Territories. The selection process is entirely confidential.
The Call for Nominations closes on November 16, 1994. Nominations may be posted through a competitive call for bids scheduled to close in April, 1995. Winning bidders will be awarded an exploration licence for a term of eight or nine years, divided into two consecutive periods as follows:
An exploration licence confers:
the right to explore for, and the exclusive right to drill and test for,petroleum;
the exclusive right to develop in order to produce petroleum; and
the exclusive right to obtain a production licence.
Selection of Winning Bids
Exploration Licences will be awarded on the basis of the highest work bonus bid; i.e., the total proposed to be spent doing exploratory work on the parcel during the first term of the licence.
The drilling of a well during the first period is the only prerequisite to retaining the licence for period two. Tenure is not related to whether or not the total amount bid has been spent.
Rentals are not required during the first period of the licence; however, a work deposit equivalent to 25% of the amount bid must be submitted by the winning bidder. This deposit is refunded in accordance with a schedule of allowable expenditures attached to the call document. If the total bid has not been spent by the end of period one, the remaining deposit is forfeited.
Area Available for Nominations
The area available for nominations is the north central Mackenzie Valley, north and south of Norman Wells, the fourth largest producing oil field in Canada. The call area is in excess of 100,000 square miles.
Canada's most prolific sedimentary province, the Western Canada Sedimentary Basin (WCSB) extends from Alberta and British Columbia into the Northwest Territories. The density of drilling in the WCSB south of 60° latitude is very much greater than further north despite comparable geology and significant oil and gas potential.
The call for nominations area is described in four broad exploration areas.
I - The Mackenzie Plain lies in the accessible mid-section of the Mackenzie Valley north and south of Imperial's large oil field at Norman Wells. The Mackenzie Plain overlies the southern Peel Trough between the arc of the Cordillera (Mackenzie Mountains) to the west and the flank of the Keele Arch (Franklin Mountains) to the east. A westward thickening wedge of Cretaceous-Tertiary strata overlie a broad Lower Paleozoic syncline.
In 1920 Imperial Oil Co. drilled the discovery well (Northwest Discovery No.1) at Norman Wells in an area of oil seepage along the banks of the Mackenzie River. Delineation of the Norman Wells prospect has proved 37.5 million cubic metres (240 million barrels) of recoverable oil (38.5°API) pooled in the up-dip end of a Middle Devonian Kee Scarp reef within 600 metres of the surface. The field is in foreslope, reef margin and reef interior lagoonal facies of an atoll-type reef which built up to 150 metres above a regional limestone platform.
Large reefal development north of Norman Wells - the Carcajou and Hoosier complexes - have been partially delineated by existing seismic and wells. There remains opportunities to discover oil pools along the up-dip edges of the reef masses and within the complex architecture of the reef where source, seal and porosity development coincide.
Although exploration has been focused on the discovery of further pools of Norman Wells type, other plays exist. Low relief shoals which developed above the regional carbonate platform may be additional targets for small oil accumulations. Further indication of oil is demonstrated in pipe recovery of 20.4°API oil from East Mackay B-45. Imbricate thrusting close to the Mackenzie Mountain front, Laramide age thrust folds and pre-Laramide folds and fault blocks are less explored structural targets. The Cretaceous sandstones interfingered with source rock has potential for small oil and gas pools which may be of interest with the close proximity of production facilities at Norman Wells.
Most exploratory wells have been drilled along a narrow corridor close to the Mackenzie River. Numerous seismic surveys have been shot giving a good grid over much of the perceived extent of the Kee Scarp play in the vicinity of Norman Wells. Only one 3-D seismic program has been shot (at Norman Wells) in the area of the call.
II - The Peel Plain and Plateau lie north of 65° latitude, bordered to the south and west by the Richardson and Ogilvie Mountains respectively. In this region the Cordillera swing to the west and relatively undisturbed sedimentary strata are preserved across a broad area west of the Mackenzie River. A wedge of Cretaceous strata deposited in a foreland basin setting typical of the WCSB, thickens to the west and south and unconformably overlies Paleozoic strata. The Lower and Upper Paleozoic strata are preserved within a depositional feature, the Peel Trough, the axis of which is sub-parallel and outboard of the Mackenzie Fold Belt. Significant structuring of the Paleozoic and younger rocks has developed in a narrow zone bordering the mountain belts.
Although fifty-two wells have been drilled in this region with only significant shows of gas reported, potential remains for hydrocarbon discoveries of significant size. Structural complications superimposed on the Lower Paleozoic carbonate/shale transition approaching the Richardson Mountains, create opportunities for structural/stratigraphic traps. The north-south Trevor Fault of the Peel Plateau marks the surface transition from relatively unstructured platform to the east to the Laramide thrusts and folds of the Richardsons in the west.
The localization and stacking of shelf edge carbonates create multiple potential targets adjacent and interfingered with potential source rocks and seals. Back from the shelf edge there is patchy porosity development within the carbonate platform. Reefs of middle Devonian age are known to exist near the eastern edge of the Peel Plain and the presence of isolated reefs building from the Hume platform is likely (as encountered in Manitou Lake L-41). In addition, potential plays such as the Paleozoic Tuttle deltaic sandstone, fluvial Cretaceous - Gilmore Lake prospects, and Arctic Red sheet marine sandstones, have been poorly explored to date.
III - The Colville Hills, east of the Mackenzie River in the Northern Interior Plains, is a large, sparsely explored area containing several gas discoveries in Cambrian sandstones. A shallow intra-cratonic basin filled with a clastic to evaporitic succession of Cambrian sediments was inverted as a result of the Silurian-Ordovician uplift of the Keele Arch. Consequently, Middle Devonian carbonate deposition and Late Devonian and younger clastic deposition was minimal in this area. Cretaceous strata were deposited throughout the region but have subsequently been stripped from the Colville Hills. The influence of Laramide tectonics is apparent in the Colville Hills area where shallow detached wrench, compressional and extensional faults overlie reactivated deeper faults of crustal scale.
Although large domal structures visible on aerial photographs have stimulated exploration in the Colville Hills, the first discovery well, Ashland et al Tedji Lake K-24, was drilled on a subsurface structure identified by seismic. Two additional discoveries in the 1980s confirmed the Cambrian Mount Clark and Mount Cap Sandstones as regionally extensive, potential reservoirs throughout the area. A total of 25 wells have penetrated the Mount Clark Formation throughout the interior plains;three wells drilled in the Colville Hills resulted in gas discoveries (two with condensate): Ashland et al Tedji Lake K-24, PCI et al Tweed Lake M-47, PCI Canterra Bele O-35. The National Energy Board estimates the discovered resources in the three pools at 11.4 billion cubic metres (400 bcf). In addition, a significant gas show was noted in PCI Canterra Nogha O-47. No oil accumulations have been found although oil-staining is common as well as oil seeps in Cretaceous sandstones are common in the area, notably at Rond Lake.
Overall potential for additional gas discoveries is very high in this play. Prospects include large low relief structures at depths ranging from 1100 to 1400 metres. The Colville Hills are structurally high and an excellent area for accumulating migrating hydrocarbons from surrounding basins. Mount Clark sandstones are the principal reservoir rocks. Thin dolostone and sandstone stringers are common in the Mount Cap Formation. Vuggy and fracture porosity have been reported in the Cherty member of the Franklin Mountain Formation, and very good vuggy porosity is common in the Bear Rock Formation. Proterozoic dolomite, if fractured within strands and tensional bulges of the wrench systems, are also potential gas reservoirs. Several structures on the Keele Arch remain untested. Possibilities also exist for stratigraphic and structural/stratigraphic traps involving the pinch-out of Mount Clarke sandstones, possibly against basement highs. The potential for small to medium oil pools in undrilled structures appears high.
IV - Great Bear Plain and Lake occupy a shallow basin between the Franklin Mountains and the Canadian Shield. The shallow Cretaceous basin (maximum thickness of Cretaceous strata about 1000 metres) overlies Lower Paleozoic and Proterozoic rocks. Few wells have been drilled and no discoveries made.
The presence of oil-prone source rocks of Cambrian age (suggested by wells in the Colville Hills) at somewhat greater depth and maturity than in the Colville Hills, combined with greater thickness of basal Cambrian sandstones of the Mount Clark Formation favour a possible oil play in the Great Bear Basin. East of the Keele Arch, potential reservoir in the Cretaceous is limited to the basal Cretaceous sandstone.
There is production taking place from the Norman Wells oil field, Canada's fourth largest producing oil field in terms of remaining reserves, with estimated ultimate recoverable reserves of 37.5 million cubic metres. In the early 1980s, a major expansion of the field was undertaken which, together with the construction of a pipeline to Alberta, has enabled the field to raise daily production rates to levels above 5,000 cubic metres. Cumulative production from the field reached 18.6 million cubic metres by end June, 1994. Production is expected to continue until about 2020.
Interprovincial's Norman Wells pipeline is a 305 mm (12 inch) diameter oil pipeline connecting Imperial Oil's Norman Wells oilfield to Zama (Alberta) 868 km (538 miles) to the south. The pipeline has 3 pumping stations with an average throughput of 4800 cubic metres (30,000 bbls) per day and Imperial remains the only shipper on the line. With design capacity rated at 5250 cubic metres per day, spare capacity exists on this pipeline and throughput could be increased substantially. Additional spare capacity will also develop over the next decade as production from the Norman Wells field declines.
The Call Package
To receive a copy of the Call for Nominations document, or to learn more about the management of oil and gas resources in Canada's North, please contact the Northern Oil and Gas Directorate of the Department of Indian Affairs and Northern Development in Ottawa at (819) 994-1606 or the Resource Evaluation Branch of the National Energy Board in Calgary at (403) 299-3112. Also available are previous Northern Oil and Gas Bulletins, an Annual Report, and a Primer on the Management of Oil and Gas Resources in Canada's North.
Information in this Bulletin was believed accurate at the time of printing; it is not intended to replace the Call for Nominations.