An apparent gas discovery with probable gas reserves of 300 bcf or more would not make big news in many parts of the world, but in the Canadian Maritimes it is important.
This one raises even more eyebrows because it is on land, and it should generate further exploratory drilling in the area.
Equal partners in the McCully 1 near Sussex, NB, are the operator, state-owned Potash Corp. of Saskatchewan (PCS), and Corridor Resources Inc., Halifax, NS.
Corridor, an independent with more than 5 million acres in the Maritimes from Quebec to Newfoundland, believes McCully field large enough to serve local markets and eventually warrant connection to the Maritimes & Northeast Pipeline (M&NE).
The general prospect location has been in Corridor's inventory for two years, said Norm Miller, Corridor president. It was presented as the McLeod Brook prospect twice at the North American Prospect Expo in Houston with no takers.
"Drilling was precipitated by PCS when it approached Corridor to drill a possible injection well in the area to dispose of salt water seeping into their potash mine," Miller said. "PCS had run a 3D seismic survey for mine evaluation purposes in 1999, which helped to identify the McCully prospect in the Albert sands underlying the mine."
Sizing it up
Corridor said well data with 3D and 2D seismic data indicate that McCully, named for a nearby community, is potentially a major gas find.
The well, 12 km northeast of Sussex, reached TD of 2,657 m in October and was production tested in November.
"Initial analyses of well logs, production tests and 3D seismic data indicate in-place natural gas reserves possibly in excess of 300 bcf within the McCully Joint Venture area (four sections or 3,550 acres)," Corridor announced.
"The McCully discovery appears to be much larger than anything we expected onshore in the Maritimes," Miller said. "It signals an exciting new exploration play for New Brunswick."
As of Dec. 19, the companies planned to spud the first stepout well on joint venture lands in January, but they still had not decided on the completion design for McCully 1. Several stepouts will be needed to determine the reservoir's commercial value, Corridor said.
Well results
McCully 1 cut more than 40 m of net gas-bearing sand within a 340 m gross sand-shale sequence at 2,030-2,370 m.
Within this section, the bottom sand has 22 m of net pay in a relatively continuous vertical sequence. The sands, in the Mississippian Albert formation, have low porosities and permeabilities.
The companies air-drilled the well to 2,389 m, and it flowed gas at a rate of 2.4 MMcfd for 8 hr while drilling. Circulation with a conventional heavy drilling mud began below 2,389 m.
Pressure in the main gas-bearing reservoir is indicated to exceed 4,100 psi. This is 600 psi above normal reservoir pressure for this depth. The firms cemented 7 in. casing to 2,400 m.
On production tests the bottom sand flowed 750 Mcfd and no water for three days. Preliminary analysis of flow and pressure data from the test by Adams Pearson Associates Inc. (APA), Calgary, confirmed the high reservoir pressure and found no indication of reservoir depletion, Corridor said.
Completion, development
APA's analysis also indicated that the reservoir near the wellbore was damaged during drilling and should be capable of higher rates of production than those achieved during the production test.
Gross porosities vary from 8-12%, but bitumen infill reduces net porosity to gas to 7-8%. Permeabilities are 0.1 md to 2 md. The measurements were determined from rotary sidewall cores and a Modular Formation Dynamic Test tool.
An attempt to hydraulically fracture the reservoir was unsuccessful, possibly due to a bad casing cement job and tubing sized too small for the higher than expected formation breakdown pressure.
"We appeared to lose downhole pressure during the frac and sanded off very shortly after formation breakdown," Miller said. Plans are to re-complete the well "barefoot."
Expected design flow rates are still speculative, but it appears that McCully field wells should be capable of rates of at least 2 MMcfd.
That would require 10 producing wells to initiate deliveries to M&NE, Miller said. He put completed well cost in the area at $1.5 million to $2 million (Canadian).
The natural gas is of good quality, with minor traces of carbon dioxide and no hydrogen sulfide.
A number of regulatory steps are needed get approvals for gas development, transportation, and marketing.
Prospect, lease data
The McCully discovery is in the Moncton sub-basin, an onshore part of the Maritimes basin sometimes referred to as the Magdalen basin, which mostly lies under the Gulf of St. Lawrence.
The McCully prospect is a large, anticlinal structure with simple four-way closure that covers at least 7,000 acres. In addition, the overlying Hillsborough unconformity provides a regional stratigraphic trap across this prospect.
Reprocessed 2D seismic indicate the field extends west, north, and east of the four-section joint venture lands onto lands held 100% by Corridor.
The prospect also extends to the south, where on Dec. 7 Corridor and PCS were successful tenderers for an exploration license covering 14,784 ha, including the southern flank of McCully field. The companies shared equally in a $4.63 million spending commitment.
Corridor was the successful bidder for full interest three new exploration licenses west of McCully. This added 43,107 ha to Corridor's existing 52,000 ha held with 100% interest north of the discovery area.
Others with leases in the area include Columbia Natural Resources Canada Inc., MariCo Oil & Gas Corp., and RHT Enterprises.
Dual markets
The McCully well is 35 miles from the M&NE Pipeline that delivers gas from fields near Sable Island in the Atlantic off Nova Scotia to markets in the Maritimes and New England.
Future drilling will be aimed at proving sufficient reserves to economically justify the development of pipeline infrastructure to transport McCully gas to both local markets and markets served by M&NE.
First steps will be to secure 3-4 MMcfd of production for local markets and assess flow to those markets to evaluate commerciality of larger scale development. A threshold delivery rate of 20 MMcfd would justify connection with M&NE.
It is likely that McCully gas initially will serve markets around Sussex that are too small and too distant to be served economically by M&NE. McCully has the potential to be quite a large discovery, Miller said.
