Shale oil play emerges in Canada's Mackenzie Valley

A shale oil play is starting to emerge in the Mackenzie Plain and Franklin Mountains areas of the Central Mackenzie Valley in Canada’s Northwest Territories.

Holding leases in the area are Husky Oil Operations Ltd., ConocoPhillips Canada Resources Corp., MGM Energy Corp., Shell Canada Resources Ltd., and Imperial Oil Resources Ventures Ltd. The leases lie generally from 60 km northwest to 180 km southeast of Norman Wells along the Enbridge pipeline that ships crude from giant Norman Wells oil field to Edson, Alta.

The drilling targets of the new play are the Canol-Hare Indian and Bluefish shales of Devonian age. MGM Energy said a geochemical review indicates that the shales are comparable to many of those being developed elsewhere in North America.

MGM Energy holds four parcels and has begun regulatory and operational planning for the drilling of a well in the 2012-13 winter targeting the shales.

MGM Energy said the Canol/Hare Indian is 30-170 m thick at 1,000-2,500 m and the Bluefish is 15-25 m thick at 1,000-2,700 m. Both are highly brittle with 70-80% quartz content and less than 5% clay. Total organic carbon is 4-25% in the Canol-Hare Indian and 2-9% in the Bluefish. The plays are expected to be liquids-dominant.

MGM Energy already held blocks in the area that it held at the time of its spinoff from Paramount Resources Corp., and it picked up three more parcels totaling 627,000 acres at a land sale last July.

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