In an era of big unconventional oil, dominated by large multinationals with deep pockets, it might be surprising to learn of junior companies finding success in overlooked or emerging plays in Alberta. We have been trained to believe it’s all over for hopeful juniors. The data however tells a different story. Surprised? Read on.
The Marten Hills Clearwater heavy oil play, northeast of the town of Slave Lake, began seeing a ramp up in production in late 2016. The Lower Cretaceous Clearwater Formation, better known from the Cold Lake oil sands in Eastern Alberta, is in this area a series of coarsening upwards marine cycles, bound by Wabiskaw sands below and Grand Rapids sands above. Legacy gas development took place from small, isolated gas caps, but the main trend in Marten Hills is a heavy oil (23° API) sand, with permeability between 20 and 300 millidarcies, and viscosity ranging from 50 to 3000 centipoise.
Due to clay content and overburden pressure, permeability is below what is needed for effective steam injection. Vertical production and fracture stimulation via horizontal wells also does not appear to work. However, with private funding support, two companies have managed to succeed with the play.
Competitive land positions were acquired by private companies Deltastream Energy Corporation and Spur Petroleum Ltd. starting about 10 years ago. Each company did intensive research on petrophysical wells logs, core data, and well production tests to identify commerciality of this bypassed zone.
Each company has secured enough private funding to execute development plans based on multileg, openhole horizontal wells with 4 legs each, drilled with pads, and no fracture stimulation, for up to 8 horizontal legs per quarter section. Company AER application documents list oil in place volumes ranging from 9 to 29 million barrels per section, and anticipated recovery factors of 5%.
It appears each company has identified a winning development strategy, has AER approved primary recovery schemes, and has achieved an impressive ramp up over the time period shown in Table 1 below :
Deltastream and Spur have each drilled approximately 48 and 90 multileg horizontal wells, respectively (Map 1). Click on Deltastream to see this Petroninja well list and map, and click Spur to see the Marten Hills Clearwater wells for that company.
One type well, Spur 100/13-35-076-07W5 is delivering an impressive 4 months of flat production at 100 bopd and has recovered 32 MSTB as of April, 2019.
Two junior private companies bring a new play to over 12,000 barrels a day over three years time, but no trade journal, government publication or industry website has picked up the story, aside from Discovery Digest, and a presentation at Geoconvention 2018 by Deltastream itself.
The play however hasn’t escaped the notice of Plains Midstream, who have constructed a new sales line to bring this oil to market.
I guess while everyone is busy examining things like the Duvernay, Bakken, Viking, or Montney there’s still room for others to fly under the radar, quietly building new positions.
Neither company could be reached for comment at the time of publication.