Oilpatch History

This month in history—December

MAY FORESTALL FURTHER PRORATION BY TAKING PORTION INCREASING PRODUCTION.
OKALTA OILS, Turner Valley pioneer, will drill two new wells south of the present most southerly producer in the field. OKALATA No. 7, located in legal subdivision 3 Section 16-18-2w5, is now erecting derrick and will get under way shortly. The well is about a thousand yards south of Brown No. 1, the most southerly producer. OKALTA No. 8 location has been selected in legal subdivision 6, just north of No. 7. Arrangements are now being made for drilling equipment for the No. 7 well. The wells will be financed by Okalta, although some Royalties may be sold as in the case of OKALTA No. 6, now testing the area west of the crude producers.
Announcement was made during the week that a refinery with a capacity of 300 barrels daily would be built immediately at High River, about 14 miles from the Turner Valley crude field. The plant will be in operation by the end of March. It is financed by Calgary and Kelowna, BC capital. Another group is completing financing for a refinery at High River, and an announcement is expected soon.
FIVE-DAY TESTS TO DETERMINE POTENTIAL FLOWS GET UNDER WAY. RAISING OF QUOTAS ALLOWABLE UNDER PRO-RATION MAY RESULT.
TO COVER ALL PROBLEMS OF INDUSTRY.
The North Star company, operating a 1,600 barrel capacity refinery in Winnipeg, is expected to supply this plant with Turner Valley oil, commencing next month. The plant is at present using crude imported from the United States. The company has recently been conducting tests to determine whether the Winnipeg equipment was suitable for the Alberta product. It was learned authoritatively that the movement of T. V. oil to the plant will commence in January. North Star is expected to obtain its crude mainly from Imperial Oil. Imperial will extend its marketing of Alberta oil into Manitoba and Western Ontario during 1938 through the enlarging of its Regina and Calgary refineries. It is at present serving this area with American oil from the Imperial refinery at Sarnia.
Turner Valley Royalties, whose completion in June, 1936, signaled the start of the present intensive search for crude, has already returned to the original investors a 400 percent dividend, $5,044 was paid on one percent units (original cost $1,500) up to the end of October. The November payment is now being worked out. The well, which cost $138,000 to drill, has returned about $650,000 to date. The potential production has ranged between 500 and 1,200 barrels daily, with actual production as low as 290 barrels under pro-ration. The well was given another acid treatment recently, and the potential is believed now well over 1,000 barrels.
SEVERAL WELLS ACIDIZED, OTHERS ACIDIZING, PRIOR TO GOVERNMENT'S PRODUCTION TESTS, NOW UNDER WAY.
1938 AND THE OIL INDUSTRY
SUNSET THOUSAND BARREL WELL.   WILL ACIDIZE IN FEW DAYS.  ROYAL CANADIAN ACIDIZING FAILS TO BOOST.
DOUBLING OF PRODUCTION, MOUNTING DIVIDENDS, PROVING OF NEW FIELDS FEATURE YEAR 1938.
The Turner Valley daily potential has been boosted since January lst from about 30,000 bbls per day to more than 60,000. The field has been extended more than 13 miles north by the successful completion of Royalite 29 and Home 2, and more than l ¾ miles further west by the completion of Okalta 6, Anglo Canadian 1 and many others. Only one 'dry hole' was included among the many wells completed during the year. Northern and Southern limits of the field have yet to be found. About two-thirds of the area considered proven is still open for drilling. Probable ultimate yield of the present 'proven area' will, in the opinion of most unbiased experts, range from a minimum of 125 million to about 250 million barrels. The Alberta Government, through the Conservation Board, is rapidly effecting scientific production regulation, gas conservation and repressuring to assure maximum yield.
In 1938 eighteen oil companies operating in the Turner Valley crude area paid out total dividends of $2,228,707.03. During 1937, with six companies on a dividend basis, $1,323,775.55 was paid to shareholders. In addition during 1938, an estimated $3,500,000 was paid out to holders of Gross, Net and Preferred Net royalties in Turner Valley wells. The record for 1939, with many more companies scheduled to go on a dividend basis, can be even more impressive provided Canada gives the industry a chance.
Lafayette French and Kootenai Brown have earned their own little place in history. They traded a horse for a slough and unwittingly gave birth to an idea that resulted in the development of a great Canadian industry. The time was away back in the Nineties and the place was a Pincher Creek. From its surface neighboring Indians had long been skimming a brown oily liquid with a vile smell, but possessed of certain useful properties. Lafayette and Kootenai came, saw and had an idea. Bargaining began. The Indians hightailed into the hills with their newly acquired horse and Alberta's first Oil Promoters, looked about for ways and means to cash in on their investment.
OIL PRODUCTIONRETURNS TO INVESTORS & ROYALTY-HOLDERSYearBarrelsValueDividendsRoyalties # 1937 2,796,908 bbls. $4,902,738 $1,323,776 *$1,250,000 1938 6,742,039 bbls. $8,639,488 $2,228,707 *3,000,000 1939 *7,575,000 bbls. *$9,263,000 $2,500,000 *$3,500,000
TURNER VALLEY (LOCATED 35 MILES SOUTHWEST OF CALGARY):CRUDE OIL WELLS PRODUCING 94; DRILLING OR LOCATED 42, AVERAGE DAILY YIELD: ABOUT 20,000 BBLS (PRODUCTION PRORATED SINCE SEPTEMBER 1937 TO BALANCE RESTRICTED MARKET).
Allied Oil Tankers attacked; at least one sank, within sight of the Pacific Coast. An enemy submarine sighted and sunk by American Air Patrols off the Washington Coast. Tankers diverted from the Atlantic to supply expending American Naval needs in the Pacific. Headlines all from the news of the past few days, they drive home the nearness of the conflict in which we and our allies are fighting for our very existence.
TURNER VALLEY OPERATION:
BUT DRILLING SLOW BRINGS WEST FACE TO FACE WITH CRITICAL OIL SHORTAGE AT YEARS END
The immediate and full exploitation of Turner Valley will help meet the pressing needs for more oil. To provide for the ultimate and inevitable decline in this field's production when it has boon fully exploited, it is essential that exploratory drilling in search of other oilfields be greatly increased without delay.
In Turner Valley there are still upwards of ninety sites available for drilling in 'Proven territory', mostly in the Central west and North West Flanks, where results on the whole have not been as successful as in the lush South End and North Extension sections of the field. There are in addition (1) excellent prospects of additional extensions of the Madison lime productive body to the south, north, northeast and northwest; (2) good prospects for the discovery of another great potential oil source, the Devonian limestone, underlying the Madison of Turner Valley (the initial Devonian Test, backed by fourteen companies, was drilling below 3,500 ft at Year's end, with completion looked for between 10,000 and 12,000 ft).
In the Year which ends today, a total of 115 wells - a record high - will have completed drilling in Alberta's proven or potential oil and gas areas, according to a survey by the "Oil Bulletin". Of this total, 49 wells had been placed on steady production as crude oil producers by year's end; 11 had been completed as natural gas wells; 7 were in process of testing, with reasonable assurance of rating as crude oil wells; 19 had completed drilling and set casing, with probably more than half of these having fair prospects for oil production; and 29 wells had been completed and officially abandoned as dry holes.
The long time dream of the Canadian Oil Industry a second "Turner Valley" in the Alberta Foothills seemed close to fulfillment this week as the result of an important Discovery at SHELL OIL OF CANADA's No. 4-24-J well at JUMPING POUND. The strike was made at a deep wildcat 20 miles west of Calgary and around 95 miles north and west of the north end of the Turner Valley oilfield.
PACIFIC OIL & REFINERIES LTD announces that it has signed a contract for the purchase of the entire oil output from the STANDARD OF B.C.NASSAU EXPLORATIONS wells in the East and West TABER pools. Production from nine wells is involved. Output is expected to range from 8,000 to 10,000 bbls monthly of 18 to 21 gravity crude. Pacific commenced hauling from Taber tanks to its Lethbridge Refinery 40 miles distant by truck last week. Its refinery is a 2,000-bbl capacity topping plant. Asphalt products will be produced from the Taber crude after removal of the light ends.
Canada's oil search gradually intensifying the past few years reached a new peak in 1944, with between 70 and 80 drilling rigs in use across the nation, following up findings of dozens of surface geological parties and geophysical parties armed with seismograph, gravimeter and core drill. Cost of the program has been high over a million dollars monthly on drilling, at least quarter of a million dollars monthly on geological and geo physical investigation.
LEDUC is the winning hand in one company's 23 million dollar gamble that will pay off to the tune of 300 millions or more. The pot will be split between the gambler who took the risks, the fellow gamblers who bought a stake in the hand when it began to look like a winner, and the citizens of the province and the nation who draw a 'house cut' from the play. As is fitting, biggest share of the pot will go to the gambler IMPERIAL OIL LTD. Sizeable slices reckoned in millions will go to the other gamblers who bought in on the hand, to the Alberta Government and 'freehold rights' owners who got a 'house-cut', Royalty without risk on the hand, and to the Dominion Government which gets a risk-free 'cut' by way of Taxes.
Dr. HUME & NORTHWEST GAS COMPANY FIRST UP
OKALTA OILS-LEDUC No. 5, South LEDUC test on the same 40 acre tract as Okalta No. 2 producer, has success assured in D2 zone, is now heading on for D3 No, 5 topped D2 zone at 5,250 ft, about 13 ft higher than No. 2 well. K.B. elevation at No. 5 is 2,409 ft. Coring was halted 34 ft in the zone at 5,284 ft and a drillstem test run, This gave an immediate gas flow with maximum rate 300,000 cubic foot daily. After 50 minutes a flow of oil reached the surface, and was allowed to flow 10 minutes. No. 5 will likely complete as a D3 zone producer. No. 2, now taking oil from D3, will probably be plugged back and perforated for production from D2.
The "Busy Beaver" Canadian Oil Industry can look back on 1948 and confidently state "The year was by far the greatest, on every count, in the half century history of the search for oil and gas in the West." With equal confidence the Industry can look forward to 1949 and say, "Canada has only seen the beginning yet. The New Year will dwarf the efforts and the results of the past."
The LEDUC-WOODBEND oilwells producing from the sands of the Lower Cretaceous will commence operating January 1st on experimental allowables set by the P. & N. G. Conservation Board. For the 31 day month, each well will be permitted to produce 3,875 barrels of fluid (oil, or oil plus any water), an average of 125 barrels per day. The maximum that may be produced in any 24 hour period is set at 150 barrels.
CENTRAL LEDUC OIL'S second Lower Cretaceous completion in the Northeast LEDUC- WOODBEND pool was kicked off and placed on production Wednesday. The well, CENTRAL LEDUC No. 7, lsd 15 7-51-25w4th, showed a flush flow of 38 barrels hourly on first runs through separator was then cut back through 3/8" choke. In 16 1/2 hours to 7 a.m. Thursday, the well made 242 barrels of clean oil, a rate of just over 15 barrels hourly. Gas-oil ratio is low, between 300 and 400 cubic feet per barrel. The flow volume is being cut back to the new allowable rate of 125 barrels daily. CENTRAL LEDUC No. 8, in lsd 16 7-51-25w4th, quarter of a mile east of No. 7, is expected to spud in this weekend. Contractor General Petroleums Limited is using the rig from No. 7 well.
By: C. O. NICKLE
FIVE OILWELLS, ONE GASWELL, FIVE FAILURES
SPENDINGS 1951 TO BRING NEW RECORDS, BROADENED ROLE IN NORTH AMERICAN ECONOMY. COMMUNIST THREAT TO DEMOCRATIC PEOPLES ADDS TREMENDOUS IMPORTANCE TO CANADIAN RESERVES.
Over two hundred oil companies, Canadian and Foreign small and large, poured over two hundred million dollars into Western Canadian oil and gas exploration, development and land in 1951 to set for the sixth year in a row a new record, As the year gave way to 1952, oilmen were looking for structures and drilling wells at an alltime high rate, and anticipating that the New Year will again tumble records, The past year has been tops in terns of numbers of discoveries. There were 108 new discoveries of oil or gas, plus a lengthy list of important extensions to fields previously, discovered. Oil strikes for 1951 totaled forty, while natural gas was discovered in 68 new areas,
By: C. O. NICKLE, M.P.
Light gravity crude oil has been discovered at the LULU LAKE area wildcat in southern MANITOBA, that province's fifth oil discovery, four of which were made during this year. The new 34 degree API oil find, 53 miles southsouthwest of Brandon and 3 miles north of the United States border, was made by the team of ROYALITE OIL COMPANY LTD, TRIAD OIL COMPANY LTD, GREAT PLAINS DEVELOPMENT COMPANY OF CANADA LTD and HOME OIL COMPANY LTD., on farmout lands from the CALIFORNIA STANDARD COMPANY.
BY: CARL O. NICKLE, MP
CANADIAN FINA OIL LTD, ROYALITE OIL COMPANY LTD, RIO TINTO ALBERTA OILS LTD and PAN WESTERN OILS LTD have rated a 3¼ mile eastern extension at their fifth gas test in the GORDONDALE area of northwest Alberta. This new Peace River region gaswell, 245 miles northwest of Edmonton boosts to three the number of successful gaswells completed by the FinaRoyalite group at Gordondale. The natural gas production comes from the Cadotte sand formation, below 2,800 feet.
Daily average crude oil production in ALBERTA, for the latest week on record, showed a decline from the previous weeks near record rate, as the 3,632 wells in the province capable of oil production putout 196,464 barrels daily. That figure, for the week ending December 22nd, was a decrease of 17,592 barrels daily in comparison to the previous seven-day average of 214,056 barrels, but bettered the mark set for the corresponding period in 1951 by about 80,000 barrels daily.
IMPERIAL OIL LIMITED has discovered natural gas in the Cretaceous formation at an exploratory well being drilled in the BITTERN LAKE area of central Alberta, a few miles west and south of Armens-Camrose area Viking oil producers.
ALBERTA GOV'T AND CANADA'S PRIME MINISTER FAVOR AMALGAMATION OF TRANS CANADA & WESTERN FOR COMBINED ROUTE. PERMIT TO BE GRANTED FOR ADDITIONAL EXPORT OF NATURAL GAS FROM PALOWKI LAKE AREA S.E ALTA.
By: CARL O. NICKLE, M.P.
By: CARL O. NICKLE, M.P.
EXTENT OF 1955 GROWTH DEPENDS ON DEGREE U.S.CANADIAN OILGAS COOPERATION GAS STILL 'IDLE ASSET'
By CARL O. NICKLE M.P.
By: CARL O. NICKLE.
OIL DISCOVERIES: ALBERTA
Western Canada's oil industry weathered many a stormy session in 1959 and emerged at year's end with record rates of both oil and gas production. But despite the fact that the production of crude oil, natural gasoline and liquid petroleum gases climbed almost three percent higher than during any other single year in the industry history, income slipped back below the 1957 level as crude oil price cuts trimmed the operators margin of profit. Other non-too bright aspects of the year's activity was the decline in drilling operations and the trimming of geophysical exploration. On the brighter side along with the record output of oil and gas was the definite growth factor and the general maturing of the industry. As we enter 1960 another record production rate is already visible and crude and LPG production will climb past the 600,000 barrel per day mark for the first time. Natural gas should also reach new production peaks in January and both drilling activity and geophysical exploration have been on the climb in recent weeks. Therefore, on four important fronts the oil industry will move into the New Year in high gear.
By: CARL O. NICKLE
YUKON STRIKE HIGHLIGHT:
1961 OUTLOOK IS MIXED
1960 was a 'lean year' for a few of the separate phases of western Canada's oil industry, particularly the geophysical section, the drilling contractor, and the supply divisions. It was lean due to many contributing factors. The trimmed overall budget, coupled with the swing of money away from the exploration phase into the plant development stage must be the major factor. It's much too early in the game to state that the cut back in geophysical exploration in 1959 has started to take its toll in oil and gas discoveries, for there were actually more finds this year then last, however, the serious minded are cognizant of this definite possibility. It was slim pickings for many drilling contractors in 1960 as the fewer holes drilled, and greater drilling efficiency made this highly competitive business that much more so. In the supply section the fewer well completions didn't hurt near as much as competition from used equipment, and the draw down on inventories as firms changed purchasing habits.
Exploration drilling activity in Western Canada during 1960, for the main part, was rather disappointing and while success ratio was actually better during the twelve months than that of the previous year, the potential of new discoveries was weaker. During 1959, for instance, Alberta, British Columbia and Yukon Territories gave up such new finds as: Sarah Lake (which is now part of the Swan Hills oilfield proper); Judy Creek (now a fairly large sized oilfield In its own right);the Worsley and Lookout Butte gas structures; Petitot River and Kotcho Lake gasfields in the northeastern sector of B.C.; and the oil strike in the Yukon, In 1960, meanwhile, 'Cardium Alley' in southwestern Alberta would have to be considered the most important oil exploration and development region and the Celelibeta LakeNorthwest Territories gas strike the most outstanding in that category, even though British Columbia had new gas discoveries in the Komie Creek, Beaver River and Pocketknife areas to name a few and Alberta operations uncovered a multizone producer in the Knappen district, Mississippian and Crossfield gas on a new trend at Crossfield and shallowdepth Mississippian gas in the Wildhorse Creek region of the province's Foothills.
By: CARL O. NICKLE, Publisher of the Daily Oil Bulletin & Oil in Canada
By: CARL O. NICKLE. Publisher of the "Daily Oil Bulletin"
As always we will close out the old year with much unfinished business and important decisions pending. Three highly important decisions as far as the oil industry is concerned still have to be made by the province 's Oil and Gas Conservation Board. Included in this group are (1) ruling on a Trans Canada application for export of another 3.1 trillion cubic feet of gas from Alberta, (2) an answer on Great Canadian Oil Sands application for a 13,500 barrels per increase in its permit to process Athabasca Oil sands for synthetic production, and (3) decisions and direction on the future prorationing of oils to market demand in this province.
Trans Canada Pipe Lines is of course the most interested party in the gas export application but many other firms are also closely involved, it will be a major factor in the planned $200 million expenditures on pipelines and gas plants in 1964. Trans Canada's own expansion projects will account for one quarter of this total. The three gas plants now on the drawing boards East Crossfield, Olds and Wimborne together will cost over $10 million and several more will be built in 1964 if T. C. gets its export permit. Another major pipeline project contingent on the gas export is Alberta Gas Trunk Lines 1964 expansion program. The Interprovincial PipeLine is also scheduled to spend millions of dollars on further large diameter looping of its oil transmission facilities.
As one oil industry executive aptly described the situation in 1963 if you had not heard a rumor of merger by 11:00 a. m. you started ore.
Although it was not actually a merger in the true sense of the word it was of particular interest that Sun Oil Company emerged as the leading company in the Great Canadian Oil Sands bid to place the first Athabasca Oil Sands processing plant in operation. Sun stepped in and has assured the proposal the financial backing it requires, one snag is that the now principal backer feels that a larger volume of synthetic crude 45,000 barrels compared to 31,500 will be needed to make it an economic possibility. As noted earlier Great Canadian and its partners are awaiting a Board decision on their application for an increase.
Western Canada's drilling contractors concentrated on efficiency in their operations in 1963 and showed good results. Rig active rates varied substantially when compared to particular dates in each of the past two years. In January with 198 rigs running the count was 25 lower than the same month of 1962; in June them were 149 rigs running compared to just 133 in the same mouth of the year earlier; and in December 1963 the tally was 190 operating in comparison to 199 going in the final mouth of '62.
Despite the fact that a large part of Western Canada's higher well completion tally was due to increased exploration in Alberta and Saskatchewan the area covered by the Daily Oil Bulletin completion statistics showed a better success ratio than in 1962. With 2,761 wells drilled in the year the 1,460 oilwells accounted for 53% of its 335 gassers were 12% of the total for 65% in all. In the previous year with 2,482 wells drilled oilwells added up to 1,248 for 50% of the total and the 318 gas wells drilled accounted for 13% of the total for 63% of the wells drilled.
1963 was a year of significant change in the geophysical phase of the oil industry. Trading of geophysical records has been much more prevalent in the past couple of years and this in turn has resulted in a large increase in the number of 'hot' shots taken in areas of particular interest. There was a very interesting increase in quick runs over lands offered at Crown Reserve sales and although this short term contract is less desirable than lengthy month in month out work programs it accounted for an appreciable number of work weeks throughout the year.
British Columbia failed to live up to expectations as far as drilling rates were concerned this year and only highly significant now discoveries of crude oil will lift that segment of the oil industry by its boat straps. In the gas phase of the industry results to date have been favorable and with extension of pipeline to the northern gas areas a new round of gas development can be expected. The sharp drop of well completions down to 173 from 332 in the record year of 1962 was due almost entirely to lack of oil development drilling.
Drilling results in Manitoba in 1962, both in terms of total completions and the result of wells drilled was highly encouraging. This sector of western Canada that has a relatively small potential oil hunting area more than doubled its total wells drilled this year over last and had 39 oil success compared to 16 dry holes.
As the year 1963 slips into history the Western Canadian oil picture is dotted with a few more crude oil and natural gas; pools than were in evidence this time one-year ago. However, of the 115 indicated discoveries during the past twelve months, only ten percent can be placed in the 'significant' category and some of those only because of their geographic location.
The Edson region of central west Alberta must be the 'exploration' highlight of the year for when gas reserves of over two trillion cubic feet are developed anywhere it is worthy of more than passing interest. The field was actually discovered late in 1962 but since that time further exploration has indicated the Elkton structure is capable of production over a distance of twenty five miles in a southeasterly direction and up to eight miles in width. It is reported that gas from this district will be taken in 1965 but will not go to the firm, which is presently the main purchaser in the western district.
As is the case of the gas successes in the Edson region, the Cardium 'Oil Alley' developing between the northwest corner of the Pembina oilfield to Edson, is still being classified by operators. It is known however, that Champlin Oil & Refining Co. has found scattered Cardium production along the trend and is still in the process of developing strikes of unknown quantity or quality. However, the same firm has released information on such discoveries as CynPem and East Edson and has indicated that both are very substantial oil producing regions. Pan American Petroleum Corporation, meanwhile, has indicated highly productive Cardium sand successes along the same trend at Carrot Creek and Hudson's Bay Oil & Gas Co. Ltd.'s strike north of Edson townsite is also a very good Cardium oil producing pool. In the same district but quite widely separated from the 'Alley' Mobil Oil of Canada Ltd. has found exploratory Cardium oil success in the McLeod River region.
By: CARL O. NICKLE. Publisher of the "Daily Oil Bulletin"
Drilling rig activity a primary yardstick in measurement of oil and gas industry operations showed comparative levels to the previous year in 1964 but greater efficiency in drilling techniques and equipment resulted in a substantial increase in the number of wells drilled. The year showed a general firming in footage rates and majority of Western Canada's better than forty drilling contracting companies chalked up a profitable year. As we move into the new year there is concern among drilling men re this same footage rate as it has to be realized that there are more than ample drilling rigs to meet the immediate demand and rigid bidding ethics will have to be adhered to avert economic suicide. The drilling contractor has proved his metal in this regard in the recently completed lean years and is expected to do the same in 1965.
The level of geophysical activity slightly lower for the year than was anticipated and only the mid-year tally compared favorably with the 1963 figures. The number of crews operating in both January and December was off from the year earlier and in particular at year end the decrease was significant.
More than 3,200 well completions were chalked up in 1964. This is only the second time in the history of the oil and gas industry that this figure has been exceeded. 1964's tally of 3,211 wells drilled was only 51 wells fewer than the record established in 1956. Although footage drilled figures are not yet compiled this year's total will also be close to the record tally of 15.4 million feet drilled eight years earlier.
AS LESSER SLAVE LAKE AREA PRODUCES MAJOR OILFIELD OTHER YEAREND DISCOVERIES IN SAME DISTRICT WILL MAINTAIN INTEREST
Construction of a new building complex, highlighted by a towering spire topped with an observation deck and revolving restaurant, on the site of the present Canadian Pacific Railway station at Centre Street South and Ninth Avenue in downtown Calgary was announced today. Officials of the three participating companies jointly announcing plans for redeveloping the area were Glenn E. Nielson, president, HUSKY OIL CANADA LTD., W. G. Milne, president of TUNDRA HOLDINGS. H, M. Pickard, vice president and general manager and J. R. W. Sykes, assistant general manager, MARATHON REALTY COMPANY LIMITED, a wholly owned subsidiary of Canadian Pacific Investments Limited. Milne is the architect for the tower project which will be identified with Husky Oil. In addition to the 550 foot tower which will be more than twice the height of any Calgary building, the new development contemplates a transportation terminal, and office building to be occupied by Husky Oil and other tenants. Also included is a further stage in the planned renovation of the Palliser Hotel expected to encompass new parking facilities, a drivein hotel entrance, swimming pool and other facilities to be announced later.
By: CARL O. NICKLE, Publisher of the "Daily Oil Bulletin"
MUSKEG & KEG RIVFR POTENTIAL AT RA.NBOW SPARKED EXTENSIVE DRILLING PROGRAMS
Add to the aforementioned highly favorable performance of the producing, marketing, exploration and development phases of Canada's petroleum industry the basic ingredients of further potential, research and numerous incentives and we can look into the New Year with considerable optimism.
INDUSTRY SPENDS ABOUT $947 MILLIONS. OIL PRODUCTION AVERAGES OVER MILLION BARRELS/DAY
The "Daily Oil Bulletin " Staff has now completed its annual "guesstimating" effort, compiling close estimates of the Canadian oil industry's performance for 1966. While all 1966 data is sub act tore vision as official figures are compiled over the next three months. the estimates are correct within a small margin for error. They confirm material progress for the year now ending.
Panarctic has acquired a total of 44,137,577 acres of Canadian Government oil and gas Permits in the Arctic Islands, from a host of companies and individuals exceeding seventy five in number. The Permits have been issued over the past eight years. Several million dollars have already in total been invested in them, in surface geological and on geophysical work, and in a limited deep drilling program.
(SECOND PAPER - State of Industry Reports to Federal Cabinet of Canada by the Independent Petroleum Association of Canada, November 1968)
The record of World Oil Consumption from 1918 to date and forecasts to 1980, together with data on the United States and Canada, is presented in Chart form by the "Daily Oil Bulletin" today the chart was prepared by D. O. B. Publisher Carl 0. Nickle. The Chart, broken down into sections, w as used to illustrate "C. F. C. N. T. V. OIL REPORT", the weekly telecast by Mr. Nickle, on Monday, December 2nd. Following is that portion of his telecast, which was built around the Chart:
ALBERTA'S OIL & GAS CONSERVATION BOARD yesterday afternoon, December 2nd 1968, made public its recommendations on the application of SYNCRUDE for an 80, 000 barrel per day processing facility within the ATHABASCA TAR SANDS. The Board revealed that with the approval of the Lieutenant Governor in Council it is prepared to recommend approval of the application. How ever, in view of the possibility of very rapid change in North American oil marketing patterns, primarily linked to North Slope Alaska potential, the Board approval will not be forthcoming until November 1969, and will require a further application by Syncrude expressing its decision to continue with the project.
By: CARL O. NICKLE, Publisher, Daily Oil Bulletin
The industry's Gross Revenue from oil, gas and sulphur at field or plant prices increased by $94.6 Millions or 7. 7% in 68, to a record of about $1,313 Millions. Alberta, as usual, accounted for the lion's share, with revenues of $994.8 Millions, up 9.1% or $83.1 Millions over 67. Saskatchewan barely held its own, with revenues $218.7 Millions, down 0.7% or $1.7 Millions from 67. British Columbia showed a 17.2% or $11.7 Millions jump to $79.5 Millions for 68. Manitoba revenue climbed 11.8% or $1.6 Millions to $15.6 Millions. The Northwest Territories (currently Norman Wells field) was up 18.9% or some $96,000 to about $605,000 revenue for 68. Eastern Canada, for oil only, was down 5.6% or, $208,000 to a 68 revenue of $3.5 Millions. (Data isn't available on the East's revenue from its limited Gas production).
Of Canada's 1968 Production of Crude Oil and Natural Gas Liquids, about 185.1 Million barrels or 42.5% was exported, with the United States accounting for 499,755 barrels daily and Japan about 6,000 barrels daily. That left 249.9 Million barrels for Canadian domestic sales or other utilization. (Canada, under the current informal agreement with the U.S., provided a market for Overseas oil in substantially larger amount than its own exports).
Insufficient data is yet available to closely estimate Expenditures by the Oil & Gas Industry in Canada in 1968. Our preliminary estimate indicates total Spendings of $1,300,000,000 in Land Acquisition, Exploration, Development, Production Costs and Royalties, and Field Lines and Gas Plants. On this basis, spendings are up by $130,000,000 over the record of $1,170,000,000 recorded by the Canadian Petroleum Association for 67. A further increase is looked for in 69.
1968's big oil event in North America was the Discovery of major oil reserves at Prudhoe Bay, on the North Arctic Slope of Alaska. The results of two wells so far completed, correlated with geological and geophysical data, has indicated a prospective reserve of five to ten Billion barrels, equal to one to two o years' current demand for North America, and probably the biggest single field yet found on the Continent. Followup drilling now underway will more fully evaluate the find in 69.
Wet sour natural gas discoveries of major rating highlighted Western Canada exploration activity during 1968, and although the first of the discoveries referred to has been proven as one of the largest, if not the largest reserve of its type in Western Canada, it will be some months before potential of the second is known and reported. January' 1968's most important wet gas find at FOX CREEK CLARK LAKE in central west Alberta was heralded with almost simultaneous discoveries by Chevron Standard, Canadian Fina and Triad Oil. The Beaverhill Lake zone was pay section at all three and subsequent development drilling indicates a single reservoir of some three trillion cubic feet of natural gas. Development is continuing at a rapid pace and plans are well advanced for construction of processing facilities in line with the size of the field. Plant size has been set at half a billion cubic feet daily, making it potentially the largest single unit in the province.
CANADIAN PACIFIC OIL& GAS LIMITED, as operator of a new drilling venture at Sukunka River, B.C., today announced that BOW VALLEY EXPLORATION and COMINCO LIMITED will be its partners in the 9,000 foot probe. Drillsite was announced in yesterday's Bulletin. It is noted that CPOG and its partners will drill the test well CPOG ET AL SUKUNKA d-57-B, NTS Map 93-P-5, on rights acquired under farmout agreement from Triad Oil Ltd. and BP Exploration Canada Limited. Terms of the farmout were not announced. An immediate start date is anticipated.
Imperial Oil Enterprises today confirmed a December 25th, 1968 spud date for its whollyowned exploratory test at TUKTOYATUK in the Mackenzie Delta area of the Northwest Territories. The well is being drilled by Imperial owned and operated rig. Drilling depths will be reported periodically.
During 1968 there were 81 indicated discoveries in Western Canada, two less than in 67. Of these 40 are classed as Oil Discoveries, down from the 50 recorded in 67; while 41 are Gas Discoveries, up from the 33 made in 67. Alberta provided over threequarters of the finds in 68, accounting for 28 Oil and 34 Gas, a total of 62. Saskatchewan provided 12 Oil Discoveries; British Columbia, 6 Gas Discoveries; and the Northwest Territories one Gas find.
By: Carl O. Nickle Publisher "Daily oil Bulletin"
Coming back to the 1969 Performance Record, of the Canadian Oil & Gas Industry, Production of Crude Oil and Natural Gas Liquids averaged about 1,315,728 barrels per day for the year, an increase of 10% or 119, 219 barrels daily over 1968. Production of Natural Gas averaged 1, 601 Million cubic feet per day, an increase of 14.9% or 729 Million cubic feet daily over 1968.
In Western Canada, including the Far North, wells completed during 1969 recorded a modest increase over the previous year, reaching 3,117 wells, compared with 2,976 in 1968. The completions included 1,050 oilwells 491 gaswells, 1,526 dry holes and 50 service wells. Totals for Eastern Canada are not yet available
In 1969 Canada produced and marketed oil, gas and by products with a field value totaling $1,446,700,826, according to estimates prepared by the "Daily Oil Bulletin. " of that total,Petroleum Liquids dominated,accounting for revenues in the year of about $1,162,636,656. Natural Gas, based on field plant prices brought in an estimated $225,252,170. Sulphur marketed, at gross plant prices, brought in about $58,812,000. Petroleum Liquids revenues were up 9. 6% over the previous year, while Gas revenues were up 11. 6% and Sulphur sales were down 24. 6%
Canada's record production rates, in particular crude oil, equivalents and natural gas liquids were linked directly in the sharp demand increase south of the forty ninth parallel. Despite pressure brought to bear to limit Canadian oil exports to suggested levels by Governments on both sides of the border at various times during the year oil exports added up to more than 213 million barrels, an average of 584,731 barrels daily for the year. This volume is some 80,000 barrels a day higher than corresponding exports in 1968, representing a 15% increase over the 184 million barrels delivered to United States markets in the previous year. It should be noted that the 584,731-barrel per day estimate includes crude oil and equivalent, natural gas liquids and finished and unfinished products.
Natural gas sales topped the four billion cubic feet per day level by a considerable margin climbing some 14% beyond the 1968 level of 3.7 billion cubic feet per day. Domestic markets consumed about 44% of the total gas marketed and exports to the United States added up to 1.85 billion cubic feet per day, Eighty percent of the total of 1,548,513,530 MCF of natural gas sold was produced in Alberta, while, British Columbia yield accounted for 15% of the total sales and Saskatchewan added the other 5%. In B. C. gas sales added up to 247,318,380 MCF and Saskatchewan's total was 53,155,150 MCF.
Exploratory drilling efforts that were scattered across the width and breadth of Canada failed to come up with the really 'big' of exciting new geological find in 1969 but with many exciting plays in relatively early stages the industry looks ahead with anticipation for the big strike in 1970. The world oil spotlight could; wing rapidly to one of many areas in Canada on very short notice. The Arctic Islands considered by most to be in the same geological setting as the famed Prudhoe Bay on Alaska's North Slope was the scene of three wildcat drilling projects in the year of 1969 and there are two to three times that number of tests programmed for the ensuing 12 month period. The far northern reaches of Canada's Northwest and Yukon Territories also hold promise of major demand the general Mackenzie Delta area as well as more southerly prospects in the Territories are receiving very special attention.