Resource Play Wrap-up

I have been building the case over the past 10 or so weeks that Resource Plays have been the primary drivers behind the growth of the western Canadian oil and gas industry. The introductory article can be found here. These plays burst on the scene using the technology of the day. They didn’t wait for the advent of horizontal multi-stage fractured wells. In this regard, they aren’t “unconventional plays” but just the plays we have been exploiting for decades. These plays are more the result of the geology of the Western Canada Sedimentary Basin than the technology employed. The geology of this basin is amazing.

An obvious corollary is that understanding the geology of the plays is every bit as, if not more, important than extending the wellbore length or tweaking the frack spacing. A large effort has been placed over the past decade into the latter investigations. Consideration should be given to the relative cost-effectiveness of drilling vertical test holes, cutting core, or running well logs.

Whether or not you agree with me, I believe we are able to draw some lessons from these epochal plays. The following is my take on the implications of these watershed moments in our industry.

First gas well in Western Canada: Never overlook the munificence of serendipity. They were drilling for water and found a massive gas pool. We should all be so lucky. But then, the well was a failure as far as providing water for the CPR’s thirsty locomotives. I imagine they had a tense time explaining the result at the 1890’s equivalent of a Management Meeting. But the value delivered by this fluke discovery has been immense.

First oil well in Western Canada: The 2WS has always been on our radar as a promising play but over a century later we still need to “crack the code.” We know there is a massive resource that, as of yet, remains untapped. With all due respect to the nay-sayers, we should keep trying to figure this play out. The geology of this basin is amazing!

Norman Wells Canol: The importance of natural fracturing in Resources Plays was recognized just over a century ago in the description of this discovery. And again, in a general sense, by Ted Link in 1950. In 2021, we are still groping around for a better understanding of these features. Research needs to be done. And, please, real research based on solid science. Not the false god of brittleness but real geomechanics. Young’s Modulus and Poisson’s ratio might be easy to calculate with existing data but that doesn’t get us any closer to an effective understanding of the problem.

Bitumount: Ever need to wrangle a massive amount of data? People often start with a laborious and hand-crafted process trying to move a mountain with a teaspoon. After a while you realize that it is better to start from scratch with a better process. This is the metaphor that comes to mind regarding Bitumount. Yes, it was a start at producing the oil sands but, OMG there was a lot of inefficient back-breaking work involved compared to what is underway today. When dealing with resource plays, continue to refine your process.

Cardium: What more can one say about the Cardium? Seven decades on and it is still a key producer. What a prolific formation. And a statement of how these plays can remain an important contributor to our energy mix for a long time. There are vast tracts of this play that are still effectively unevaluated. The geology of this basin is amazing!

Deep Basin Spirit River: The first resource play recognized as such and the detailed geological work to create the deep basin model applicable around the world was done right here in Calgary. Our industry has sponsored world-leading research in the past and we can do it again. If we try. In the meantime, the deep basin continues to produce. The geology of this basin is amazing!

Uppermost Cretaceous Gas: While somewhat quiescent right now, the fact we have this large a resource of low GHG energy just waiting for exploitation at the right moment in time just screams out: The geology of this basin is amazing!

Montney, Horn River, Bakken and Duvernay: These plays were primarily, if not entirely, projects predicated on the application of horizontal wells with completions utilizing multi-stage fracturing techniques. The low permeability of these formations precluded their economic development through conventional techniques.

But no matter how amazing this drilling and technology is (and have no doubt, it represents an amazing advancement), the massive investments in these projects would not have happened without significant geological investigations.

These plays are all different but prove an important point. Oil and gas is not produced from cable tool or rotary table wells, nor from vertical or horizontal wells. Hydrocarbons are produced from rocks through the medium of wellbores. Success requires continual geological research. Moving forward requires more core, more logs, more tests. More data.

The term “De-risking” is sometimes used to claim that we have learned enough, and we can stop delving into the rocks and move to a production mode. De-risking is anathema and should be tossed in the bin with other archaic and obsolete buzzwords. I had a 1998 4Runner. Wonderful SUV. I put over 320,000 kms on it before I sold it. Still see a ton of them on the road. Did Toyota say they had de-risked cars and stop research and development?

As the industry climbs out from the pit of 2020 - 2021, the next big resource play is waiting to be exploited. Let's get to work on the geology now!

Is this article verging on being a polemic? Perhaps. Maybe, as CSPG President, it is incumbent on me to use this soapbox to try and proselytize on the need to hire more geologists. Regardless, if you have read this far, thank you.

Enough of my rant, you clicked on the Well of the Week for vignettes on key discoveries. Next week I will return to that theme with the kick-off to a series of posts on "Wells that make you go hmmm.".