Oilpatch History

This month in history—February

An Editorial
By C. O. Nickle
10% WAR TAX, 8% SALES TAX, ALL IMPORT DUTIES, ELIMINIATED ON DRILLING & PRODUCTION EQUIPMENT LOWER EQUIPMENT COST IS FIRST OF SEVERAL STEPS DESIGNED TO SPEED CANADIAN OIL SEARCH.
Details of the Road Construction and Oilfield Development program in the Northwest Territories of Canada - undoubtedly the largest such program in the nation's history - are gradually being released for publication. The program is under the auspices of the United States Army.
Standard Oil of California, through its subsidiary DOMINION OIL COMPANY, has stepped up its Southern Alberta Plains oil search by addition of a fifth drilling rig. Formerly, Standard-California, through Dominion Oil, had one rig engaged in South Alberta Plains wildcatting; plus one rig engaged in Taber Oilfield extension drilling under the Dominion Oil-Nassau Explorations joint program; plus two rigs engaged in wildcatting under the mid-continent Oil & Gas and Standard Oil of British Columbia joint program. The 5th rig is to be engaged in Dominion Oil wildcatting.
With the pipeline builders now on the last lap, and the final lengths of pipe expected to be laid and welded in place this month, large volumes of Fort Norman Crude Oil have already started on the 600odd mile run from Norman Wells to Whitehorse. U.S. Army Service & Supply chief Lt. General Somervell announced in midDecember that oil had started through the pipeline, which then had about 100 miles to be completed, with builders working from both ends of the line.
5,000 quarts of Nitroglycerine far larger than any shot ever before fired in an Oilwell is slated for blasting today in OIL WELL RE FLOW LIMITED'S initial attempt to rejuvenate a depleted well using a technique based on years of study, but never before tested in the field.
PACIFIC PETROLEUM CHARLES Nos. 3 and 4, respectively 500 ft north and 600 ft northwest of the O'Dea-Dunlap No. 5 wall which completed with an initial exceeding 1,000 bbls of oil daily, have apparently failed to obtain commercial production, and are being capped pending decision on their future. Both wells found the 'Brindley sand' - source of O'Dea 5A's oil too tight to yield commercially. Both were deepened to find the 'Fifer sand' some 95 ft deeper. This sand showed considerable oil at No. 3, first well to penetrate it, and so easing was set at the contact at both wells. Testing this week, however, indicated low permeability in the sand at both wells.
PAPER PLANNING SUCCESSFUL,  BLAST NO THRILLER
HOME BRAZEAU SYNDICATE No.1 is now drilling below 11,305 ft, with estimated depth to the Madison limestone in the next 50 to 60 ft. IMPERIAL ANGLO CROSSFIELD No. 1 is drilling at 8,436 ft, 259 ft in the Madison limestone, with no porosity reported as yet. SHELL OIL No. 16-14-1 at JUMPING POUND is drilling below 1,078 ft; CO-OP No. 1 at STIMSON CREEK, which topped the Crooked Hole Sand in the Lower Blairmore at 10,110 ft, is drilling at 10,170 ft; ROYALITE DE WINTON No.1, drilling 5,647 ft; IMPERIAL LETHBRDIGE No. 2, drill 4,680 ft, in Basal Lower Cretaceous; ROXANA No. 3K at KEYSTONE VALLEY drilling plug after setting 13-3/8" casing at 2,530 ft.
There was a dull 'thud', a slight jarring of the earth, and a slug of water shot from the tubing about 15 ft into the derrick. "Casey" Ball and George Scott, expert explosives handlers who were the only humans on the derrick floor ducked for cover. After a moment they waved their arms. "That's all, you've had it.", one yelled. And so we witnessed tbe explosion of 5,000 quarts of pure Nitroglycorino in the West flank No. 2 well in South Turner Valley by far the largest blast ever sot off in an oil well. A group R.C.M.P. guards, press and radio reporters and photographers stood on the road, 300 ft from the "guinea gig" well. Some of us had spent the past five days on that spot and its vicinity. It was a buildup for a let down, so far as sensation seekers were concerned.
First of the Royalty Payment Distributions from December 1945 Production were reported to this writer today. The following Tabulation shows: Grass Distribution per 1% Royalty for December; together with the Gross Distributions far recent previous months for comparison:
By: C. O. Nickle
Ten years ago THE CALIFORNIA STANDARD COMPANY conducting a sizeable exploration program on the southern plains of Alberta, made an oil discovery in the Devonian formation at PRINCESS. The discovery well was small and so was the pool it opened, but the find had a significance not fully realized until seven years later. The little Princess oil patch, yielding the first Devonian oil in Alberta, stimulated Plains exploration led to discovery of other little oil pools in formations younger than Devonian, to discovery of more Plains gas reserves, and pointed the way to the beginning of major Devonian reef oil discoveries at Leduc in 1947.
SHELL OIL COMPANY OF CANADA LIMITED last week passed an important milestone in the history of oil and gas in Canada when it produced the first sulphur ever obtained in Canada from waste acid gases contained in natural gas.
BASHAW LEDUC OIL AND GAS LIMITED, Edmonton independent has found some oil in the D3 zone, of Devonian at a stepout venture in BASHAW areas indicating an extension or discovery of a new pool about two miles south, of previous Bashaw oil production. The wells BASHAW ARL No. 1, is located on lsd 9 19-41-22w4th, about 110 miles northeast of Calgary, and is owned 50% by BASHAW LEDUC OIL & GAS LTD, 34% by AMERICAN LEDUC PETROLEUMS LTD and 16% by YANKEE CANUCK OIL & MINING COMPANY LTD. The quarter section on which the well is located is also owned under that same percentage basis.
The team of WESTERN HOMESTEAD OILS LIMITED, NORTH CANADIAN OILS LIMITED and PETCAL LIMITED, contacted the Viking sand oil pay zone at its ARMENA No. 1033 well around 14 feet higher than was anticipated. That venture, now assured of production is the group's eleventh oil success in the Armena field. Rig from that venture will be shifted to a new site within a day or two.
"VOLUNTARY", WITH BIG STICK IN BACK GROUND 1961 OIL TARGET 640,000 BARRELS DAILY AVERAGE, 100,000 B/D IN ONE YEAR, 800,000 B/D AVERAGE FOR 1963.
ALEX G. BAILEY, President, INDEPENDENT PETROLEUM ASSOCIATION OF CANADA: I. P. A. C. is pleased with the government's National Oil Policy decision. It is a major step in the right direction to ensure that Canada will become self sufficient in balance in petroleum. Our Association, which has been active pressing for a government oil policy for some months, points out, however, that the production targets announced by Mr. Hees are somewhat lower than suggested by I. P. A. C.
The following comments were made today by CARL O. NICKLE, publisher of the 'Daily Oil Bulletin' and 'Oil in Canada':
ALBERTA & SOUTHERN GAS CO played host to about 250 industry and government representatives at a banquet in Calgary on Friday evening, February 9th. This marked the official dedication of the $300,000,000 pipeline project and officially placed the line on stream. Chairman for the evening was C. O. NICKLE, while guest speakers included PREMIER E. C. MANNING and N. R. SUTHERLAND.
By: CARL O. NICKLE, Publisher of the Daily Oil Bulletin & Oil In Canada
A milestone in the development of Saskatchewan's oil industry occurred ten years ago this month with the first shipment of newly found oil in southern Saskatchewan. The shipment consisted of 1,500 barrels and it came from the Fosterton field, 30 miles northwest of Swift Current, the forerunner of all oil fields in southwest and southeast Saskatchewan.
GREAT CANADIAN OIL SANDS LIMITED has again convinced the Alberta Oil & Gas Conservation Board that its proposed Athabasca Oil Sands development project is feasible and if recommendations of the Board are approved by the Lieutenant Governor in Council for the Province of Alberta the company will have the right to build and operate facilities for the recovery of 45,000 barrels per day of oil from Lease No. 4 in the Oil Sands region. The Board with the authority of the Premier of the Province last Friday afternoon released its report on the Great Canadian Application. It recommends approval of the requested increase extension of financing deadline to July 1st, 1964 extending start of construction date to September 1st, 1964 from January 1st, of this year and extending start up date to September 36th, 1967 from September 30th, 1966.
TRANS CANADA PIPELINES LIMITED was advised last Friday. February 14th, 1964 that the Alberta oil & Gas Conservation Board is prepared to approve its application for an increase of 3,148 trillion cubic feet in its Natural Gas export permit from the Province of Alberta. The Board has recommended to the Lieutenant Governor in Council that the increased volume be allowed. Final approval is of course subject to Alberta Government action on the Board recommendations.
The prospects for a "Go-ahead" on a 1,700-mile long, four-foot diameter oil pipeline from Prudhoe Bay, Alaska, to Edmonton, Alberta have been enhanced by conclusions reached in a detailed study by The Bechtel Corporation made for the oil industry backers of the MacKENZIE VALLEY PIPE LINE RESEARCH GROUP. The report is now in the hands of the participants, according to reliable source but its content; are at this stage a closely guarded secret.
British Columbia oil producing companies lost a cent and a half on their crude oil Prices as of the first of this month as a direct result of a lower level of deliveries though the Pacific Western Product, and Crude Oil Pipe Line. The setting of the transmission line's tariff on the basis of average deliveries through the system on a three-month basis has worked to the advantage of producers previously as production rates and deliveries have risen steadily in recent years. However, due to two main factors 1) production rates at productive capacity in the November, December, January period; and 2) that larger deliveries were made to refining facilities in northeastern BC- the level of deliveries through Western Pacific dropped below 60,000 barrels daily. This result in a 12 cent per mail line tariff, compared to 40.5 cents in the previous three months, and a loss of one and a half-cent per barrel on wellhead price. Buyers of BC crudes have taken this development into account in the posting of crude oil prices effective February 1st, 1970.
BLUEWATER OIL & GAS LTD, of Calgary today confirmed a GUELPHREEF oil discovery in SOUTHERN ONTARIO. The well McCLUE-MOORE 3-20-1V is one half mile south of the Kimaball-Colinville field in Moore Township six miles south of Sarnia.
The six Persian Gulf oil states who are members of OPEC won their demands from the major oil companies over the weekend, and a five year agreement was entered into just nine hours before the February 15th deadline set by OPEC for "compliance, or else legislation". As calculated by the oil firms prior to the settlement, the deal will give Persian Gulf oil states about thirty cents U. S. per barrel more for 1971 (for total dollar gain of $1.43 Billions), escalating each year to 1975, when state income will be about 53 cents U.S. higher than the pre-agreement rate. With higher production rates taken into account, the extra revenues for 1975 are estimated at $3.45 billions.
LIBYA, the North African oil state that started the "leapfrogging" of OPEC nation oil costs last Fall by curtailing its production to squeeze oil firms, is going for new terms somewhat tougher than those negotiated by the Persian Gulf states. Libyan Deputy Premier Abdussalam Jalloud said today in Tripoli that "Libya would impose tougher terms than those agreed on by the OPEC states in the Persian Gulf. " He said bluntly that the demands, and gains, by the Persian Gulf group "do not even reach up to the mini mum of our demands. He added that Libya would "grant concessions in the future only on a contracting basis" and would "greatly expand the role of the stateowned Libyan National Oil Corporation." Under normal circumstances, Libya would be delivering some 3,700,000 barrels of oil daily, most of it going to Western Europe, and some to the Americas. But Libya has not yet restored the big production cutbacks it started last June, to gain the higher tax rates and posted price boosts won from oil companies last fall. (Neighboring ALGERIA, No. 2 North African oil state, is like Libya an OPEC member. It too is dealing tough with France on new terms for the French oil firms who account for a large part of Algerian production).
VENEZUELA, the only Western Hemisphere member of OPEC, has been closely following the Persian Gulf and North African activities of fellow OPEC nations, preliminary to embarking on Stage Two of its own "higher oil revenue" program. Venezuela unilaterally, and retroactively, raised its Tax Rate to 60% in December, and plans to set new higher posted prices later this month. This nation produces some 3,700,000 barrels of oil daily, of which the bulk goes to the Atlantic area of the United States and to Eastern Canada. Venezuela says it plans to use the Persian Gulf price terms as a "measuring stick" in setting its new prices. Meantime, the uncertainties of Venezuelan terms have slowed down plans of international oil firms for Exploration and Development. The companies who agreed to take on new projects under "service contracts" with the Venezuelan state oil company are marking time until they know whether government tax and price policies will justify the capital risking.
A second oil well in the Dutch North Sea, with a test flow rate of 2,775 barrels of oil per day, was announced today by a four-company group consisting of Tenneco Oil Company, Monsanto Company, Ethyl Corporation and Laura & Vereeniging. The new well is about two miles south of the wildcat drilled by the group in 1970 as the Dutch North Sea's first oil find. Both are in a 100,000 acre block designated F/18.
Following is a complete text of the statement read to the Alberta Legislative Assembly by PREMIER PETER LOUGHEED, on Tuesday afternoon, February 4th, 1975. The statement released simultaneoutly with statements by Ontario's Premier William Davis, and Minister of Energy, Mines and Resources in the Federal Government, the Hon Donald Macdonald, details agreement worked out by the various governments and Syncrude Canada Limited partners.
The following statement was made at 5:00 p.m. Eastern Standard Time on February 4, 1975 by J. A. ARMSTRONG, CHAIRMAN and CHIEF EXECUTIVE OFFICER of IMPERIAL OIL LIMITED: Agreement in principle has been reached on the method of financing the estimated $2 billion cost of the Syncrude project. The proposed agreement includes a statement of intent for the investment of a total of 30 per cent by three governments, in shares of 15 per cent by the government of Canada, ten per cent by the province of Alberta, and 5 per cent by the province of Ontario, The remaining participants, Gulf Canada Ltd., Canada-Cities Service Ltd, and Imperial Oil Limited, have agreed in principle to invest a total of 70 per cent of the total financial requirement of $2 billion.
WHARF RESOURCES LTD. recently announced that it has executed an Option Agreement with BRASCAN RESOURCES LIMITED with respect to its RAM RIVER COAL LEASES located in the Nordegg Area of Alberta. The Leases comprise 11,800 acres. Under the terms of the Option Agreement, Brascan shall have until February 28, 1975 to re-evaluate all existing information and data owned by Wharf pertaining to the Coal Leases. On or before April 1, 1975, Brascan must advise Wharf whether or not it intends to carry out exploration work on the Leases, in the event Brascan exercises this option. Brascan must spend a minimum of $250,000 in exploration work in order to earn a 51% interest in the Leases, Brascan will then have a further option to spend an additional $250,000 to earn a further 24% interest, bringing its total interest to 75%. If Brascan should so earn the said 75% interest, Wharf has the option to convert its remaining 25% interest to a lesser net profits interest.
E. C. HURD, President, TRANS MOUNTAIN PIPE LINE COMPANY LTD, announced that the Board of Directors has declare a dividend of thirty cents per share for the quarter ending March 31, 1975, payable on March 31, 1975 to shareholders of record oil March 5, 1975.
OTTAWA (CP) -- The debate over how much oil should cost, who should control it and how governments should tax it has become the most important issue of the Feb. 18 election campaign.
COLUMBIA GAS DEVELOPMENT OF CANADA LTD., announced Thursday that its third development well, COLUMBIA ET AL KOTANEELEE YT I-48, encountered the Devonian-Nahanni gas pay zone at 3, 616 meters (11, 864 feet) true vertical depth.
Finance Minister JOHN CROSBIE estimates that Conservative-pricing proposals would result in $90 billion in oil and gas revenues over the next four years. Until now, the producing provinces and the oil companies have each received 45% of revenues with the federal government getting 10%.
The vast coal resources of Northeastern British Columbia moved one small step nearer to commercial exploitation with an announcement by one of the major developers of another committed customer for the product.
TOKYO (AP) -- Iran raised the price of its crude oil $2.50 a barrel today, to $31 U.S. ($35.90 Canadian) from $28.50, Japanese government and trading sources said. It was the sixth member of OPEC to increase its price since the start of the year.
PETROFINA SA, the Belgian multinational oil firm, announced today it has agreed to sell its Canadian subsidiary to PETRO-CANADA for $1.46 billion (Canadian).
CLARION PETROLEUMS LTD. has announced two oil discoveries in southeast Saskatchewan, including a success in the Bakken sandstone formation. This is the second Bakken strike in the region, which Clarion considers a significant indicator of future potential.
OMEGA HYDROCARBONS confirms that it has an oil discovery in the southwestern area of Manitoba.
The ALBERTA PETROLEUM MARKETING COMISSION advises for January, the Alberta Border Price for gas is 1.775 65 $/GJ. The price adjustment for gas is 0.830 00 $/GJ.
G.G. (GERRY) KRAUSE, well known Calgary Geologist, died Monday, February 15 at age 53. Gerry was for 20 years an independent consultant and promoter who was instrumental in the discovery of the giant Quirk Creek gas field in southern Alberta.
JOHN O. GALLOWAY passed away Feb.18, 1981 at age 81.
HUSKY OIL LTD. has announced it is taking preliminary steps to build a heavy oil upgrader in southern Saskatchewan.
AMALTA OILS & MINERALS LIMTIED has participated in the drilling of 12 new wells in the Auburndale area, of which eight were completed as oil wells and four were abandoned.
AQUITAINE CO. OF CANADA LIMITED advise the participants and land details reported for the new location situated in 10-28-119-8 (W6M) and highlighted in Wednesday's (Feb 18, page ten) Bulletin was in error.
MOBIL OIL CANADA'S Ocean Ranger rig working offshore Newfoundland sank early this morning and 84 men are missing and feared lost.
OTTAWA (CP) -- PRIME MINISTER TRUDEAU sent a telex to Premier BRIAN PECKFORD of Newfoundland on Friday reasserting Ottawa's claim to ownership of offshore resources, but urging renewed and urgent negotiations on other related issues.
by Rick Charland
by Dale Lunan
(CP-DOB Staff) Prime Minister BRIAN MULRONEY and Newfoundland Premier BRIAN PECKFORD today signed a long-awaited offshore oil agreement that provides for establishment of a $300 million development fund.
Alberta Energy Minister NEIL WEBBER says the province is ready to "go to war with Ottawa" and the consuming provinces if measures announced last year to provide a market responsive gas industry in Canada aren't implemented according to plan.
by Kim Coghill