The Foothills of the Canadian Rockies have long been known to contain huge gas reserves. They also have been known for difficult access, which has made the region an expensive place to explore and develop. With gas prices hitting record highs and not showing signs of dropping any time soon, oil and gas companies are showing increased interest in the region. Since the beginning of the year, 450 wells have been licensed or completed in the Foothills.
A review of the Highhat, Sukunka and Bullmoose areas of British Columbia shows a region of only moderate development along the thrust belt trends. The rather low concentration of wells hardly reveals the significant investment that a number of companies have made in this area during the past 49 years.
Problems in exploring this region are significant, requiring significant investment. Seismic acquisition, for instance, is far from straightforward, as lines need to be shot across steep, densely forested ridges and across gravel-filled valleys. The suggested retail price of 2-D seismic is between US $2,020 and $4,040 per acre (C $5,000 and $10,000 per kilometer). Furthermore, extra effort is needed in processing and interpretation, which pushes the price even higher.
Land is another big hurdle, with prices beginning to reflect potential. A sale on Oct. 18, 2000, saw six blocks of land sold for more than $3.25 million ($5 million) to W.J. Quinn and Cavalier Land at Boulder. That area of land is just off the northwestern end of the developed Triassic trend. Drilling costs are high in the area, with an average well costing $2.4 million ($3.7 million), plus an added $520,000 ($800,000) to complete (PSAC Reports 1996 and 1998).
Faced with these costs, it is easy to see why the play is only in the realm of the biggest players. Talisman had capital expenditures in the order of $13 million ($20 million) in 1999 and $16.2 million ($25 million) in 2000 at Sukunka. However, in return, the company has maintained a daily production rate of 112 MMcf/d, with excellent drilling success.
Major players
A quick review of the main players in the Foothills reveals Canadian Natural Resources has the most operated wells in the region (2,339), followed by Petro-Canada (1,559) and Talisman Energy (870). Home Oil and Encal Energy also are significant operators there, each with more than 800 wells. In terms of production, Petro-Canada leads with 6.5 Tcf of gas to date. Shell Canada is second with 5.7 Tcf, and Canadian Natural third with 2.3 Tcf of produced gas. In addition to Talisman (1.9 Tcf), Husky, Mobil and BP Canada each have produced more than 1 Tcf of gas.
Talisman Energy's recent announcement of two Triassic discoveries in the British Columbia foothills has demonstrated the potential of deeper thrust zone and fold belt plays. The first of these discoveries is an exploratory well in the Highhat area. That well, at c-42-K/93-P-5, encountered 656 ft (200 m) of pay in the Baldonnel and Pardonet and flowed gas at a rate of 18 MMcf/d. It also confirmed a new thrust structure in the Highhat area. The company's second success was a development well at d-7-E/93-P-3 in West Bullmoose. Talisman has a 50% stake in both wells. Burlington Resources Canada (formerly Poco Petroleums) holds the remaining 50%. This region is one of Talisman's larger producing areas. Production, which has averaged about 112 MMcf/d during the past 3 years, is limited by processing capacity at Westcoast Energy's gas plant. Talisman is completing another well at Highhat b-83-L/93-P-5 and has locations licensed at Highhat b-64-L/93-P-5 and Sukunka a-79-J/93-P-4. Burlington is drilling at Sukunka c-66-F/93-P-5 and West Bullmoose d-37-H/93-P-4.
History
Exploration in the Foothills began nearly a century ago with the Waterton No. 1 well in 1904. The first production came in the mid-1920s from the Mississippian Rundle Formation at Turner Valley. Exploration remained relatively low in terms of wells drilled until the late 1950s, when exploration surged to more than 200 wells a year. Activity increased dramatically again in the mid-1970s. That exploration push probably resulted from the OPEC-inspired oil crisis of that period.
However, the momentum was lost when the Canadian National Energy Program came into effect in the early 1980s. After a slowdown through the 1980s and early 1990s, interest in the Foothills has made a dramatic return, with more than 1,000 wells drilled in 2000, and nearly 200 completed by mid-April 2001.
Exploration in the Highhat area began in June 1940 with the spudding of the BC Government Pine River No. 1 well at d-23-E/93-P-12. This was only the third well to be drilled in British Columbia, and it was completed to a depth of 6,940 ft (2,115 m) with several cores in the Gething and Dunlevy. However, the road to the big discovery of Triassic gas began in 1956 when Triad Oil Co. conducted surface stratigraphic and structural surveys after acquiring extensive land rights from the Falls area to the Alberta border. This early work failed to provide information specifically on the Triassic due to a lack of surface exposure. However, significant data was gathered in 1958, after a well was drilled at Prairie Creek (a-24-H/93-I-10), and in 1959, when two more wells were drilled at Bush Mountain (a-24-A and b-33-A/93-O-10).
The first hint of what the Triassic had in store came at Falls in February 1962, with the testing of a Husky Oil and Sun Oil well at c-18-G/93-O-9. That well flowed 3.6 MMcf/d of Triassic gas during a test. The defining discovery, however, came from Triad and BP in 1965. Those companies had successfully acquired reasonably useful seismic that had not been shot before this time because of the mountainous topography of the area. With the newly acquired data, they drilled the Sukunka b-42-B/93-P-5 Baldonnel and Pardonet gas well. That well encountered a considerable thickness of fractured pay capable of producing 33.5 MMcf/d. Two additional wells were drilled at c-56-B and b-10-A by 1967, but both were dry and subsequently abandoned.
Activity increases
Despite the initial successes, neither BP nor any of the other companies involved could justify the costs of constructing the gas pipelines and facilities needed to begin production. At that time, Falls and Sukunka were still isolated discoveries with no guarantee of more success in the area. This, combined with the high costs of development, the need for helicopter support, and a low gas price prevented any new exploratory drilling for several years.
The situation began to change in 1972 with Oakwood Petroleum's development of the Cretaceous Cadotte and Nikanassin at Grizzly. This included the first productive well in the prospect area at Grizzly North
b-62-G/93-I-15, which flowed Nikanassin gas. That year also saw BP's return to exploration in the region, leading to a major discovery at Bullmoose d-77-E in 1973. Testing at a stable rate of 9.2 MMcf/d, the
d-77-E well confirmed multiple gas-bearing Triassic pools were present. The discovery then was pursued by further development drilling. Not until 1980 could production begin in the more northerly fields of Sukunka and Bullmoose, completing a 24-year cycle from major discovery to production.
From 1972 to 1984, 160 wells were licensed in the Highhat area, with the majority of completed wells targeting Triassic and Late Cretaceous zones. Since 1985, another cycle of development has occurred - development in the Cretaceous Cadotte and Triassic Artex zones. Between 1994 and 2000, the rate of development in the region has dropped from 43 licenses in a year to four, despite a sustained high number of licenses in British Columbia overall. One reason for this is the rapidly expanding development in the north of the province, targeting zones such as the Devonian Jean Marie, Slave Point and Keg River.
Producing zones in this part of British Columbia are predominantly gas-prone, as most of the reservoir rocks have undergone deep burial. Oil production is limited to the Charlie Lake (specifically the Artex zone) and the Halfway at Brassey. The best oil production from a single well has been that of CanHunter Brassey d-46-F/93-P-10, which has produced 2 million bbl of oil and 19 Bcf of gas.
Gas is found in numerous zones throughout the prospect area, from the Cadotte down to the Triassic. Gas production from the Cadotte is mostly restricted to the eastern fields of the prospect area at Noel and Moose. Noel has been a recent focus of several land brokers, which picked up all rights in four blocks at an average price of $79.04 an acre ($520 a hectare) at the Oct. 18 land sale. The most productive of any of the zones are the Triassic Baldonnel and Pardonet formations, with a total yield of 1.2 Tcf of gas. Top production for a gas well is 139 Bcf, which has been produced from the multizone Baldonnel and Charlie Lake completion BP AEG W Sukunka d-45-J/93-P-4.
Big producers
Canadian Hunter Exploration leads operators in the Highhat prospect area with 188 wells. Canadian Hunter has licensed 16 wells since 1995 to produce 1.2 Bcf of gas and 14,789 bbl of oil, mostly from the Artex at Brassey and the Cretaceous at Noel. Canadian Natural Resources (CNRes) has had the most successful results in the region with total production of 68 Bcf of gas from six Triassic wells at Murray River since 1995. CNRes has made good use of horizontal well technology with production of 21 Bcf of gas from its 1996 horizontal completion at Murray River b-2-B/93-P-3. The company's September 1997 vertical well at d-97-E/93-I-15 was equally successful, having produced 22 Bcf of gas since going on stream in early 1998.
Talisman has been the most active operator since 1995, having drilled 20 wells. The company's focus in the region is the deep Triassic thrust play, in which it has drilled three wells with a cumulative production of 5 Bcf of gas at Bullmoose, eight wells with 30 Bcf of gas at Sukunka, and two wells with 10 Bcf of gas at Burnt River. Talisman also has drilled five wells at Highhat, of which four are separate deviated legs of the c-42-K well.
The Pardonet and Baldonnel play has a high overall success rate of 52% and a high exploratory success rate of 37%, according to Canadian Discovery's Strategy 2000 Report. Of the productive wells drilled between 1995 and 1999, 90% have had initial well productivity greater than 10 MMcf/d. For the average well in this play, an ultimate recovery of 18 Bcf should be possible. However, the best well, with an incredible 53 Bcf anticipated ultimate recovery, is Poco's (now Burlington's) horizontal Outpost well at Boulder c-47-J/93-O-8. Placed on production in May 1997, that well demonstrated initial productivity of 50 MMcf/d and has produced 34 Bcf of gas.
The deep thrust and folded Triassic pools at Highhat and neighboring fields make up one of the most geologically complex plays in Canada. Understanding of the play is further hampered by its remote location and inaccessibility. In spite of these difficulties, exploration companies have spent tens of millions of dollars to gain an understanding of how these pools have developed.
Although this play is essentially structural, the earlier stages of deposition and diagenesis are of significant importance. The dolomites and limestones of the Pardonet and Baldonnel formations were deposited during a marine transgression that occurred toward the end of the Triassic. Deposition of the Baldonnel took place in a shallow marine environment that was sometimes high-energy. This led to the formation of bioclastic wackestones, packstones and grainstones, which contain a high degree of intergranular porosity. Water levels had deepened by the time the Pardonet was deposited to form pelloidal and bioclastic wackestones and packstones. Following deposition, diagenesis led to the occlusion of some of the intergranular porosity, but it also developed or enhanced other porosity, including biomoldic, intercrystalline and vuggy types. During the burial process, hydrocarbons would have developed
from organic matter deposited with the carbonates, or in the overlying Jurassic Fernie shales. The overall thickness of the two formations is between 246 ft and 492 ft (75 m and 150 m). Thickness is influenced most by pre-Jurassic erosion, which completely removed the Pardonet formation to the east of the prospect area.
The onset of the Laramide Orogeny led to two events that resulted in the development of gas pools in the Triassic carbonates. The first event was the process of deep burial. With increased burial, the thermal maturation level of the hydrocarbons increased, leaving only gas and bitumen. Hence, oil is not encountered in these pools. The next event was the formation of traps within the Triassic carbonates. Compression from the west caused the development of extensive folding and eventual imbricated faulting and thrusting. Hydrocarbons were able to migrate along the faults and accumulate in anticlinal traps. Furthermore, because of the competent nature of the carbonates, they tended to fracture readily along thrust zones. As a result, the Pardonet and Baldonnel typically are stacked as separate imbricated thrusts as shown in the detailed section at Sukunka
b-19-A. In plan view, pools span a northwest-to-southeast trending swath that reflects the trend of these thrust zones throughout the Triassic.
Acknowledgement
Information provided by Canadian Discovery Ltd., Calgary, Alberta, 403-269-3644.