When Imperial Oil spudded its Leduc #1 wildcat in central Alberta in the late 1940s, it was showing sheer, stubborn perseverance. During a span of nearly 30 years, the company had drilled 133 previous wildcats in western Canada, but it had found precious little. At that time, Canada was desperate for discoveries- it was importing most all of its oil from the United States, and production from the fields it did have was declining steadily. Companies were mainly poking holes in and around the foothills region to the west, because that was where the giant Turner Valley Field was found in 1914. The Imperial Leduc #1 was not destined to be a duster, however. It discovered the tremendous Leduc Field, a monster containing almost 400 million barrels of recoverable oil. Since that time, billions of barrels of oil and trillions of cubic feet of gas have been found in the Leduc pinnacle reefs that stretch through the central Alberta plains. St. Albert and Big Lake pools, which lie just outside Edmonton, are part of the prolific Rimbey-Meadowbrook trend of Leduc reefs. In Devonian time, the reefs grew on topographic highs along the western margin of a vast carbonate platform. The little pinnacles are prime reservoirs, capable of producing more than a million barrels of oil per well from less than 6,000 feet. St. Albert was discovered in 1952 by Amoco, and Big Lake, lying just half a section south, was found in 1956 by Imperial. Between them, the companies drilled 11 wells on 40-acre spacing into the two Leduc reefs. Oil pays in the slightly shallower Nisku and Wabamun formations, which produced on top of the reefs, were also tapped. The pools, which were eventually combined into one field operated by Imperial, produced some 21 million barrels of oil. Dynamic Oil & Gas, a tiny Canadian company headquartered in Richmond, British Columbia, entered the historic trend in 1995. The fledgling firm, known mainly for its dogged interest in British Columbia's wild Fraser Valley play, had the idea that it could tap certain shallow-gas reservoirs that lay above the nearly depleted Leduc reefs. "We were working in an area south of Big Lake, looking at the Basal Quartz B zone," says Wayne Babcock, president and chief executive officer. "We could see that the zone was very prospective in the Big Lake/St. Albert area." Shallow-gas development The Basal Quartz B (BQB) is one of a series of Cretaceous gas-charged sandstones that are draped over the Leduc reefs, says Jim Britton, exploration vice president. The rub: this sand, which can reach a net thickness of 110 feet, contains sour gas. Hydrogen sulfide content runs around 2,000 parts per million. Nonetheless, Dynamic believed that the sands above the old reefs contained enough gas to justify drilling wells and building a 10-mile pipeline to a processing plant that had spare capacity. Dynamic spent two years trying to obtain the shallow-gas rights from Imperial. The major oil company was well aware of the potential of the BQB reservoir, but it was not interested in developing shallow, sour-gas reserves. The property was a low priority for it, so Dynamic decided to buy out a small firm that had an interest in the field. "Once we were a partner, we finally got Imperial's attention," says Babcock. In 1997, Dynamic proposed reentering an existing well that had been completed in the Ostracod zone, a thin, sweet-gas Cretaceous reservoir that occurs just above the BQB sand. Imperial had already produced about 102 billion cubic feet (Bcf) of gas from the Ostracod interval in the area, but at that time all of the wells were shut in. "We asked Imperial if it would like to join us in recompleting the well in sands below the Ostracod zone," says Britton. The company politely declined the offer, so Dynamic spent C$100,000 by itself to test the 6-1 well. The company found 64 feet of pay in the BQB, and tested the well at a calculated absolute open flow rate of more than 194 million cubic feet per day. Its flare stack on the first test was limited to about 6 million per day, however, so the results were met with some skepticism. The firm returned to Imperial, and asked to buy out its interest in the field. It needed a partner, and ended up talking to Fletcher Challenge, a New Zealand-based company that had already acquired Amoco's oil interests in St. Albert. Eventually, Imperial agreed to the sale, and Dynamic and Fletcher Challenge split the purchase so that each firm owned 50%. Fletcher assumed operations. The Canadian oil patch dubbed the 6-1 well "Fat Albert." The 35-Bcf find still ranks as one of the highest flowing Cretaceous gas wells drilled in western Canada. Onstream since 1998, Fat Albert has produced 19 Bcf and is still making 8.5 million cubic feet per day. The new partners immediately embarked on an aggressive program to develop Cretaceous gas, build the pipeline and recomplete existing wells. Even the old Ostracod producers turned out to be a bird's nest on the ground. "Imperial had shut in the Ostracod pool when the pressure reached 250 pounds," says Babcock. "All the wells were sitting there, so one of the first things we did was install compression. We added about 20 Bcf in recoverable reserves just from that." The companies brought on gas production from various other shallow sands, including the Ostracod, Viking, Glauconite and Belly River reservoirs. By the end of March 1999, St. Albert was producing 26 million cubic feet of gas and nearly 1,000 barrels of gas liquids per day from 11 gas wells. Today, little undeveloped potential remains for natural gas, says Jon White, Dynamic exploration manager. Gas production peaked at 35 million cubic feet per day in 2000 and is currently at 14 million per day from 22 wells. "We're in the harvesting stage of gas exploitation." Oil rejuvenation In 1998, Dynamic and Fletcher Challenge shot a 12-square-mile 3-D seismic survey over St. Albert. The companies were hoping to see bypassed oil potential. "We were looking for attic oil in the Leduc reef, and any oil overlying the reef in the Nisku and Wabamun formations," says Britton. The first look at the seismic was disappointing, however. The structures prospective for oil didn't appear to be large enough to drill, so the companies refocused on gas opportunities. Fortunately, the thick, gas-charged sands did show up nicely on the data. In 2001, Fletcher Challenge was purchased by Apache Corp., and Dynamic bought the Fletcher interest in St. Albert, bringing in two new partners, Energy North Inc. and Trioco Resources Inc. The acquisition raised Dynamic's working interest in the field to 75%, and the firm also took over operations. Dynamic decided to take a fresh look at the 3-D survey. "We reprocessed the 3-D and this time, we saw bigger structures in and amongst the old wells," says White. "Those old wells had not been drilled in the optimum positions." In early 2001, crude production from the field was down to less than 100 barrels per day. Dynamic was ready to test some of its oil prospects. The first targeted a Leduc anomaly. Dynamic reentered the 11-25 well and sidetracked it to 4,940 feet. "We were unsuccessful in the Leduc, but we encountered oil in the Nisku," says White. The Nisku is biostrome, carbonate sediments comprised of eroded reef material. Between 1985 and 1995, Imperial had drilled several wells to the Nisku, and believed that it was produced out. What Dynamic found, however, was attic oil in the Nisku zone. The 11-25 was completed at the rate of 110 barrels of oil and 20 barrels of water per day, and is currently pumping 125 barrels of oil per day. Dynamic followed that find with another "Fat Albert" discovery. It reentered an old well called the 6-25, originally drilled in 1952, to test a potential high on the southern pinnacle reef. Dynamic came in high to all the previously drilled Leduc wells, hitting 22 meters of net pay in the Leduc. During an eight-hour production test, the 6-25 flowed at an average rate of 990 barrels per day, along with 350,000 cubic feet of gas per day. Its water cut was less than 1%. Next, Dynamic reentered the 10-36 well in the northern pool and completed it as a Wabamun producer. That well is making 85 barrels of oil per day. The Wabamun, also Devonian, is a dolomitized shelf limestone that could potentially be waterflooded. For the balance of this year, Dynamic has scheduled four wells, targeting bypassed oil in the Leduc, Wabamun and Nisku. Two wells will likely be reentries of existing wells; two will be grassroots wells. In the St. Albert area, a new Leduc well will cost C$500,000 to C$700,000. At press time, St. Albert was producing about 1,400 barrels of oil per day. "The battery is capable of handling rates of 2,500 barrels per day," says Babcock, "and with the additional drilling we have planned, we expect to bring that up to capacity shortly." Further down the road, Dynamic would like to test some deeper plays in the Middle Devonian, says Britton. "We have 14 sections of land under lease, and we have some exploratory projects off-reef in the Basal Nisku." All told, St. Albert is a classic pool-rejuvenation story, says Babcock. "We rediscovered the potential of the pool. First we did it with the gas, and now we are doing it with the oil. We have found 60- to 70 Bcf of developable gas reserves, and it's still too soon to say how much additional oil we'll recover."

Comments