ARCHIVED - Bidding on 8 Parcels in Southern N.W.T. Now Open
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Volume 1, Number 3
Bidding Opens on 149 817 hectares
A Call for Bids for exploration licences in the Fort Liard area of the southern Northwest Territories is open until November 30. It includes 8 parcels totalling 149 817 hectares (576 square miles). Eight natural gas discoveries with resources estimated by the National Energy Board at 12 900 million cubic metres have been drilled in the vicinity of the offered parcels just north of the border with British Columbia (see map).
This Call for Bids is the result of strong response by the industry to the earlier Call for Nominations. It is the first time new exploration rights are being made available in this area in about 25 years.
Successful bidders will be announced, and licences awarded, in December. Each exploration licence will confer the exclusive right to drill and test for petroleum. Successful exploratory drilling during the term of the exploration licence entitles the explorer to apply for and receive a significant discovery licence (SDL) or a production licence. An SDL extends the tenure for an unlimited time, or until a production licence is issued.
Description of Parcels
Formations that have proven gas-bearing in this region (both in the N.W.T. and B.C.) include Devonian: Besa River, Jean Marie, Muskwa, Slave Point, Sulphur Point, Muskeg, Keg River, and Nahanni/Arnica-Manetoe facies; Mississippian: Banff, Shunda, and Elkton/Debolt; Pennsylvanian: Mattson; Permian: Fantasque; and Cretaceous: Scatter and Bluesky.
Parcels 1 to 5 are located immediately north and east of the large Pointed Mountain gas field. Parcel 5 surrounds the gas discovery at Liard F-25 (SDL 99). Pointed Mountain has been a steady source of gas since 1972; by year-end 1993 cumulative production reached 8.6 billion cubic metres. Gas is trapped in Devonian Nahanni carbonates which are thrust faulted into large structures of the Liard Plateau foothills.
These parcels are also situated about 35 km east of another significant foothills gas discovery, Labiche F-08 (SDL 12), where the Devonian reservoir consists of lenses of porous siltstone.
Within a radius of about 10 to 55 km from these four parcels is the gas plant at the terminus of the pipeline from Pointed Mountain to the Westcoast Transmission system in B.C. There is capacity available in this pipeline which also connects the producing Kotaneelee field, some 35 km to the southwest, and the Beaver River field on the B.C. border.
The Liard Highway from Fort Nelson, B.C. runs through most of Parcel 4.
Parcel 8 runs north from the border at 60° and is further east. It surrounds the Bovie Lake J-72 gas well in the easternmost of the foothills structures. The Liard Highway runs through the southern portion of this parcel. Further east lies the Celibeta H-78 gas discovery (SDL 1) in the Slave Point Presqu'ile barrier bank edge.
Parcels 6 and 7 are located further north along the Slave Point edge. Parcel 7 is very close to the Liard Highway. Parcel 6 surrounds the Netla C-07 (SDL 13) and Arrowhead G-69 discoveries. Netla is a very successful gas test, an estimated 426 million cubic metres, in the Presqu'ile bank edge; yet, Arrowhead G-69, a few kilometres southwest on trend with Netla, tested gas from the deeper Nahanni Formation. The parcels are also on trend with the Arrowhead B-41 gas discovery (SDLs 90 and 98) and N-21 and B-76 gas shows to the south.
Selection of winning bids
The bidding is simple,straightforward, fair and competitive. All terms and conditions are specified up front. A single criterion is used to select 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 four years of the licence term.
The drilling of a well during the first four years is the only prerequisite to retaining the licence for an additional three years. Tenure is not related to whether or not the total amount bid has been spent.
Rentals are not applied in the first term of 4 years; however, a work deposit equivalent to 25% of the amount bid must be submitted by the winning bidder. This work 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 the first four years, the remaining deposit is forfeited.
Further information on geology, reserves, and royalties is available in Northern Oil and Gas Bulletin numbers 1 and 2, Annual Report, and Primer on the Management of Oil and Gas Resources in Canada's North; and further details on the bidding process is contained in the Call for Bids.
Information contained in this Bulletin was believed accurate at the time of printing; it is not intended to replace the Call for Bids.
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