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CANADA briefs

Petrolia files Superior Court motion on Gaspé

Rimouski, Que., Can.-based firm, Petrolia announced April 24 that it has filed a motion for declaratory judgment with the Quebec Superior Court. The motion stems from a municipal bylaw adopted by the Town of Gaspé on Dec. 19, 2012, that halted the company's drilling activity at its Haldimand 4 well just outside the town.

The company is seeks to have the bylaw declared invalid citing its drilling permit issued by Quebec's Natural Resources Ministry. According to the company, no solution has been found to satisfy the municipal authorites. The bylaw was passed under the guise of protecting water wells in the area yet the company noted that official documents confirmed the Town of Gaspé passed its bylaw with no basis on hydrogeological study or professional opinion.

The company disclosed its toxicological evaluation of the products to be used in the drilling fluids of the Haldimand 4 well on Feb. 26, 2013.

The Haldimand project is located 16 miles from Gaspé. The company estimates recoverable reserves at 7.7 million bbl. The reservoir is conventional yet the company has opted to horizontally drill and does not intend to deploy hydraulic fracturing. If successful, Haldimand would by the first commercial oil operation in Quebec.

Delphi Energy brings Montney wells on stream

Delphi Energy Corp. of Calgary reported encouraging results from its initial development of its Montney play at Bigstone where Delphi last year brought three horizontal Montney wells on stream and recently brought on stream a fourth horizontal well (OGJ Online, May 22, 2012).

The 15-10-60-23W5 well at East Bigstone was drilled in late-2012 to 14,620 ft depth with a lateral length of 4,670 ft. The well was completed using a 20-stage slickwater hybrid completion. Total drilling and completion costs were estimated at $8.3 million. East Bigstone is northwest of Edmonton, Alta.

The well was brought on production Jan. 27. During its first 12 full days on production, the well averaged 4.2 MMcfd of raw gas. Associated condensate and natural gas liquids also were produced.

Total production rate over this initial period was 990 boe/d, of which 37% was NGLs.

Initial results of this well, and particularly a new completion design employed, were very encouraging as compared with the first three wells drilled in East Bigstone, which were completed with gelled oil hydraultic fracturing, Delphi said.

Delphi expects to commence drilling operations after spring break-up on the previously announced farm-in acreage to earn a 75% interest in the Montney and Nordegg on the 32.5-section land block. All total, Delphi will hold an average working interest of 85% in 78.5 sections of prospective Montney and Nordegg rights in the Bigstone area.

On March 26 the company announced its acquisition of an additional 30 gross sections on Montney rights in the heart of its Bigstone acreage. The purchase was based on the company's success of its previous five wells. The deal closed $13.65 million, the company said. The acquisitoin has added 54 drilling locations to the company's inventory, which is an increase of 40%. The company now holds 140 net potential two-mile horizontal drilling locations.

ExxonMobil completes acquisition of Celtic

The Canadian government approved ExxonMobil Canada's acquisition of Celtic Exploration Ltd. of Calgary. The $3.14 billion transaction was expected to close before Mar. 1.

ExxonMobil Canada and Celtic announced the planned transaction in Oct. 2012, pending the necessary government approvals (OGJ Online, Oct. 17, 2012).

On Feb. 20, Celtic said Canada's Industry Minister approved the deal and no other regulatory approvals are required.

Celtic assets include 545,000 net acres in the Montney shale play and 104,000 net acres in the Duvernay shale plays in Alberta. Other acreage in the deal is in the Inga area of British Columbia, the Grande Cache area in Alberta, and interests in oil and gas properties in Karr, Alta.

In December, Industry Canada supported CNOOC Ltd.'s $15.1 billion acquisition of Nexen Inc. (OGJ Online, July 30, 2012) and also approved Malaysia's Petroliam Nasional Bhd.'s $5.2 billion acquisition of Progress Energy Resources Corp. (OGJ Online, July 28, 2012).

Bellatrix, South Korean firm JV delayed

In January, Bellatrix Exploration Ltd., Calgary, signed a $300 million (Can.) joint venture agreement with an undisclosed company based in Seoul, South Korea, to jointly develop Bellatrix's undeveloped Cardium holdings in west-central Alberta. The company announced in April that its Seoul-based partner had requested and has been granted a one-month extension to finalize the JV. The deal is expected to close by May 30.

Terms call for the partner to pay $150 million to the JV, which plans to drill 83 Cardium wells.

The partner will earn 33% of Bellatrix's working interest in the Cardium wells until recovery of its investment plus an 8% return on investment. After payout, expected within seven years, the partner's share reverts to 20% working interest.

Bellatrix will be required to guarantee return of the partner's capital investment of up to $30 million if payout is not achieved within seven years. The partner may elect to invest in Cardium wells already drilled earlier this year.

As a result of the JV, Bellatrix boosted its net capital expenditure plan for 2013 to $230-240 million compared with a previously announced $180 million budget.

Bellatrix anticipates a 2013 exit rate of 30,000-31,000 boe/d. On Dec. 14, 2012, Bellatrix acquired an additional 11 gross and net sections of highly prospective Cardium and Notikewin-Falher assets in the Ferrier area of west central Alberta. This acquisition is expected to yield 37 net drilling locations in the Cardium, nine net locations in the Notikewin-Falher, and 66 net locations in the Duvernay formation.

Bellatrix continues to focus on its core Cardium and Notikewin-Falher assets.

On Dec. 31, 2012, Bellatrix had 206,638 net undeveloped acres and had identified more than 1,700 net opportunities with estimated capital requirements of $8.17 billion based on current costs. The firm believes inventory would take more than 40 years to develop based upon its current cash flow.

Macasty shale core analysis encouraging

Core analyses from the Ordovician Macasty shale in two wells on Anticosti Island, Que., "are impressive and compare favorably with producing wells from the Utica formation that occurs in the Eastern Ohio region" and are "very positive indicators for the potential production of hydrocarbons from the Macasty formation," said Corridor Resources Inc., Halifax.

The Macasty formation is the lateral equivalent of the Utica formation in eastern Ohio, Corridor noted. The Petrolia/Corridor Princeton Lake and High Cliff wells on Anticosti Island were drilled in the fall of 2012. Corridor and Petrolia hold 1.5 million gross acres of licenses on the Island.

The wells intersected 90 m and 57 m, respectively, of highly organic Macasty formation. The cores were sampled at 50-cm intervals. Weatherford analyzed the Princeton Lake core and TerraTek examined the High Cliff core.

The results provided an average of 4% total organic carbon in both wells. It is important to note that TOC averaged 5.5% through a 10-m section at the High Cliff well, with the highest TOC measured at 7.1%. Princeton Lake TOC averaged 6% through a 10-m section with the highest TOC measured at 7.5%.

The results include hydrocarbon saturation levels as measured by the S1 (free hydrocarbons in pore spaces) at an average of 5.7 mg/g at Princeton Lake and 4.6 mg/g at High Cliff through the 10-m sections. The analyses also confirmed the Macasty formation is in the oil window at both wellsites.

Corridor will provide updates on further analytical results from the three wells drilled in the 2012 Petrolia/Corridor program on the island as they become available. The results will be helpful in determining locations for the next stage of the resource development program on Anticosti.

Corridor intends to engage Sproule Associates Ltd. to update the Anticosti Macasty resource estimate that was effective June 1, 2011 (OGJ Online, Sept. 4, 2012).


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