ASSESSMENT OF CANADA’S LIGHT TIGHT OIL RESOURCES Part 1 – Oil in Place www.petrelrob.com Worldwide Petroleum Consulting Definitions • “Light” oil – API gravity > 30o • “Tight” oil – Reservoir cannot produce at economic rates from conventional vertical wellbores • Horizontal drilling and multi-stage hydraulic fracturing required for economic production • Reservoirs include shales as well as tight sandstones and carbonates Data Sources • Federal agencies (GSC / NEB) • Provincial agencies (AGS) • U.S. Energy Information Administration • Technical literature • Corporate reports Oil Resource Calculations • Conventional plays – statistical techniques, using exploration play definition and analysis of existing pool size distribution • GSC - PETRIMES • NEB - @Risk • Unconventional plays are generally continuously distributed – not in pools • Not well suited to conventional analysis • Oil-in-place volumes based on probabilistic analysis of reservoir parameters are most credible • U.S. EIA, Alberta Geological Survey, National Energy Board • These are major projects, and only a few exist • Simple, deterministic volumetric estimates are more commonly available (e.g., analyst reports) Canadian Petroleum Basins Northern Interior Platform East Coast Offshore Western Intermontane Western Canada Sedimentary Basin Interior Cratonic Eastern Cratonic Basins GSC Open File 4673 Light Tight Oil Play Classification • Established Plays • Regionally extensive unconventional plays • Significant exploration and development activity • All are in Western Canada Sedimentary Basin • Established / Isolated Plays • As above, areal extent and resource potential are limited • Emerging Plays • Proven tight oil potential, limited production history • Potential Plays • Oil in place resources likely, but no production history Established Play Slave Point Fringing Reef Complex Swan Hills / Slave Point (Devonian) Peace River Arch Waterways Shale Basin • Regionally extensive carbonate banks and platforms, fringing emergent landmasses • Conventional production from reefal buildups Swan Hills Platform • Waterways shale basin forms regional stratigraphic trap Established Play Slave Point Fringing Reef Complex Swan Hills / Slave Point (Devonian) Peace River Arch Waterways Shale Basin • No systematic assessment of tight oil in place • Existing estimates: Swan Hills Platform • 1190 e6m3 (7.5 BBO) for entire system (CIBC, 2011) • 397 e6m3 (2.5 BBO) for undeveloped Swan Hills platform lands (BMO, 2011) • Significant reserve additions associated with tight development (Carson Creek, Judy Creek) Bakken (Devonian / Carboniferous) Established Play • Tight silt / sandstone encased in organicrich shales, deposited in extensive open seaway • Regional basincentred accumulation, flanked by conventional traps • Intensive development in U.S. and Canada Bakken (Devonian / Carboniferous) Established Play • 3580 e6m3 (22.5 BBO) for Canada (EIA) • Where >30 ft thick • Shale parameters • 795 e6m3 (5 BBO) (CIBC, 2011) • 731 e6m3 (4.6 BBO) (Crescent Point, 2011) • 36 e6m3 (0.25 BBO) public company P+P reserves (NEB, 2011) Spearfish (Jurassic) Established Play • Sandstone / siltstone red beds, variably cemented by evaporites • Widespread floodplain to marginal marine, lying on profound unconformity • Conventional strat traps locally, but hz drilling and multi-frac completions allow access to compartmentalized lowquality reservoir Spearfish (Jurassic) Established Play • Volumetric upside constrained to large, discrete stratigraphic traps • 397 e6m3 (2.5 BBO) (CIBC, 2011) • 139 e6m3 (0.88 BBO) (Penn West, on company lands) Montney (Triassic) Established Play AB BC • Tight siltstone, deposited in open marine setting along western flank of craton • Downdip, overpressured gas and liquids are regionally prospective, with oil along updip margin • Horizontal / multi-frac wells also used to develop lowquality reservoir in subcrop edge traps BC OGC Montney Play Atlas • Improved oil recoveries compared to vertical wells • Extensive and intensive development Rokosh et al., 2012 Established Play Montney Oil in Place • NEB (2013) probabilistic values • P50: 22484 e6m3 (141.5 BBO) • P10: 36113 e6m3 (227 BBO) • P90: 12865 e6m3 (80.9 BBO) • Dominated by Alberta volumes (Rokosh et al., 2012) • These calculations require calibration with test results – a lot of wet sandstones in areas with largest calculated oil volumes Established Play Lower Shaunavon (Jurassic) • Tight muddy and fossiliferous limestone, locally porous and dolomitized • Deposited on broad shallow marine shelf with limited water circulation and little clastic input • Discrete structural control on prospective fairway – oil charge and fracturing along uplift Established Play Lower Shaunavon (Jurassic) • No systematic assessment of tight oil in place • 684 e6m3 (4.3 BBO) estimated for entire Shaunavon fairway (Crescent Point, 2014) Viking (Cretaceous) Established Play Reinson et al., 1994 • Thinly-bedded conventionalquality sandstones interbedded with siltstone and shale, producing poor overall reservoir quality • Deposited in shallow marine cratonic seaway Tight Oil Fairway Conventional Viking Oil Pools • Horizontal / multi-frac wells access multiple layers and compartments to recover economic volumes of oil Viking (Cretaceous) Established Play Reinson et al., 1994 • No systematic volumetric assessments – play fairway is loosely defined • 795 e6m3 (5 BBO) cited by CIBC (2011), but basis of calculation unclear Tight Oil Fairway Conventional Viking Oil Pools • Corporate presentations indicate in-place volumes of 22 to 59 e6m3 (0.14-0.37 BBO) on township-scale properties Established Play Cardium (Cretaceous) • Tight sandstones, deposited in shallow marine / shoreline settings • Large oil volumes recovered from conventional vertical wells, but unconventional potential lies in three main settings: • Cardium “fringe / halo” – tighter sandstones deposited in deeper water settings around main pools • Broad sand sheets with little conventional reservoir rock • Poorer reservoir within existing pools Established Play Cardium (Cretaceous) • NEB (2011): • 1678 e6m3 (10.6 BBO) for entire Cardium • 159 – 477 e6m3 (1-3 BBO) for fringe / halo accumulations • Corporate estimates generally 2.5 - 6 MMBOIP per section on their prospective lands • Significant reserve additions associated with tight development (Brazeau, Garrington, Harmattan, Lochend, Pembina) Established Isolated Plays • Charlie Lake (Upper Triassic) • Sub-regional uppermost Charlie Lake (“Worsley Mbr”) • Variably-cemented, marginal marine sandstones, capped and sealed beneath post-Triassic unconformity • Systematic horizontal / multi-frac development in northwestern Alberta • Basal Belly River (Upper Cretaceous) • Deltaic / shoreface sandstones deposited in multiple cycles • Oil-charged in west-central Alberta, existing conventional development from stratigraphic traps • Systematic horizontal / multi-frac development of marginal sands Emerging Play Duvernay (Devonian) • Organic-rich shale with interbedded calcareous shale / limestone • Deposited in deep marine anoxic basin • Major source rock with clearlydefined areas of oil- and gasgenerative capacity Switzer et al, 1994 • Industry currently testing limits of liquids-rich gas and oil production Rokosh et al, 2012 Emerging Play Duvernay Oil in Place • Rokosh et al (2012) probabilistic values • P50: 9803 e6m3 (61.7 BBO) • P10: 13171 e6m3 (82.9 BBO) • P90: 7004 e6m3 (44.1 BBO) • EIA (2013) • 10620 e6m3 (66.8 BBO) • Is reservoir energy in updip oil-bearing areas sufficient to produce this oil? “Alberta Bakken” (Devonian / Carboniferous) Emerging Play • Multi-cycle complex of organic-rich shale, tight sandstone, and tight carbonate • Original play concept focused on overpressured Exshaw • Modeled on Bakken production to east • Failed to produce economically • Now limited production from lower Banff sands at Ferguson, and uppermost Devonian carbonates to west • Oil in place estimates based on old play model; not valid Horn River (Devonian) Potential Play • Organic-rich shale with calcareous and silty intervals Gross thickness, Horn River Group • Deep marine anoxic basin; northern extension of Duvernay / Muskwa fairway • Major source rock with established oil-generating capacity • Industry in early stages of testing play • Additional potential in adjacent Yukon basins Hayes, 2011 • Large (unquantified) oil potential Rokosh et al, 2012 Potential Play Muskwa Oil in Place • Rokosh et al (2012) probabilistic values • P50: 18296 e6m3 (115 BBO) • P10: 25418 e6m3 (160 BBO) • P90: 11884 e6m3 (74.8 BBO) • EIA (2013) • 6740 e6m3 (42.4 BBO) • EIA applied “risk factor” to reflect industry’s reluctance to pursue the play Other Light Tight Oil Plays Northern Interior Platform East Coast Offshore Chinkeh Western Intermontane Nordegg Second White Specks GSC Open File 4673 Ordovician shales? Macasty Light Tight Oil Summary • Huge oil-in-place potential exists in several plays: • • • • 8 established 2 established / isolated 3 emerging 5 potential • Only a few plays have been analyzed systematically • Play definition, geographic limits, and reservoir parameters are generally unclear in early stages of exploration and development • Oil in place volumetric estimates carry large uncertainties • Regional analysis must be refined with ground truthing against both historic and current industry test results Light Tight Oil Summary • Defining light tight oil plays depends upon large data sets • All established plays are in WCSB • Northern interior platform, cratonic basins, and eastern onshore and offshore basins have light tight oil potential, but we don’t have sufficient data to define the plays • Light tight oil potential can be identified conceptually in many other formations and basins, based on our regional knowledge of petroleum systems
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