Issuu

JUL/AUG 2022 • ISSUE 4 • VOL 49

THE MAGAZINE OF CANADIAN ENERGY GEOSCIENTISTS

Reservoir cspg.org

www.cspg.org/mountjoy

TWO DAYS OF PRESENTATIONS

TWO DAYS OF FIELD TRIPS

FOUR DAYS OF NETWORKING

Learn about the latest advances on a wide range of carbonaterelated themes and discuss new ideas and techniques applied to carbonate rocks

Explore world-class Cambrian stromatolite beds, excellent examples of large-scale dolomitization, and exposed analogues of hydrocarbon reservoirs.

Networking opportunities, receptions and dinners will be available throughout all four days of the Mountjoy Conference!

ABOUT THE CONFERENCE Mountjoy Conferences rightly honour Eric Mountjoy and his students' outstanding contributions to carbonate stratigraphy, sedimentology and diagenesis, particularly those on the Devonian reef systems exposed in the Alberta Rocky Mountains. In this third edition of the Mountjoy Carbonate Research Conference, held in the Banff Centre, we are returning to the Canadian Rockies where Eric Mountjoy spent much of his time teaching students and investigating carbonate strata that form the basis for our understanding of carbonate reservoirs and dolomitization.

REGISTRATION Individual Registration Rates: Member Registration: $2400.00 Non-Member Registration: $3000.00 Student Registration: $1750.00 Registration Includes: - Two full days of technical presentations - Two days of guided field trips - Networking reception and formal conference dinner - Accomodations at the Banff Centre from August 14th - 18th - Breakfast, lunch, and coffee breaks from August 15th-18th

In This Issue

JUL/AUG 2022

Letter from the Editor

Petrophysics in the Green Economy – Part 1: Water: For Every Purpose

12 Go Take A Hike – Rockbound Lake and Castle Mountain, Banff N.P., Alberta 19 2022 CSPG Regional Graduate Student Scholarship Winners

22 Detection and analysis of tectonically active fault zones and the introduction of new Neo-Tectonic (NET) maps of the Peace River Arch and the Deep Basin areas in Alberta and Northeast British Columbia (NEBC) 28 From the Desk of the AER 30 The Blue View: Industry Trends Through Woodmac’s Lens 33 Thank You to all the CSPG Sponsors

CONFERENCES

UPCOMING EVENTS

PAGE 2

PAGES 20

MOUNTJOY 2022

2022 UPCOMING INFORMATION HA LING PEAK, ALBERTA This alpine view was taken looking northwest along the Rundle Thrust Sheet in the Rocky Mountain Front Ranges above Canmore, Alberta. Ha Ling Peak is comprised primarily of the Late Devonian Palliser Formation, part of the Paleozoic succession in the hanging wall of the Rundle Thrust adjacent to the Jurassic-cored Mount Allan Syncline. Strata of the slightly older Fairholme Group and uppermost Cambrian are exposed on its lower slopes. The dip surface of the peak is along the original contact with the once-overlying Exshaw Formation. Photo by: Andrew Miall

RESERVOIR ISSUE 4 • JUL/AUG 2022

FROM THE EDITOR TOM SNEDDON, PROFESSIONAL GEOLOGIST (ALBERTA), PROFESSIONAL GEOSCIENTIST

ver notice that there are the same number of days in July (31) as January? How come July is so short…

Enough philosophizing. We have a July heatwave of articles in this edition of the Reservoir, beginning with the first of many parts of a series entitled Petrophysics for a Green Economy by Ross Crain, P.Eng. Number 1 is Water: for Every Purpose. As a P.Geol. Water Resources guy, your Editor appreciates Ross’s engineering perspective on hydrology and hydrogeology. I trust you will too. One of your Editor’s favourite hikes is Rockbound Lake immediately north of Castle Mountain in Banff Park. We are pleased to present a geological version of this fast trip to the Alpine zone by the Go Take a Hike crew led by Phil Benham, including Clint Tippett, Cathy Wang and Daniel Chen. It is a spectacular set of views and Upper Cambrian geology. Enjoy. Like fractured rocks? You will love Zeev Berger and his team’s new perspective on the tectonophysics of the Peace River Arch and related areas in the Deep Basin which cross the Alberta/British Columbia divide. Is “breathtaking” strong enough to cover the team’s interpretation of the geology, geophysics and petrophysics of one of the great petroleum sub-provinces of the Western Canadian Sedimentary Basin? You judge.

Best wishes from the Reservoir staff to all those whose work and volunteerism is much appreciated by the Society and the Trust.

This edition includes our regular feature “From the Desk of the AER”. Kelsey MacCormack and Alex MacNeil update us on the active Projects from the Alberta Geological Survey. They include work in progress on, among other things, Reservoir Aquifer Characterization and Containment, Carbon Capture Utilization and Storage. The article explores our resources from the depths of the basin to the heights above us with Earth Observations for Regulatory Solutions. Great stuff. AGS continues to lead. Woodmac’s Lens focuses on North America in Context: Overarching Themes Across the Industry. More high altitude/strategic insight from Scott Norlin and Brandon Myers that we often miss. Outstanding commentary. The big news for August is the Mountjoy 2022 Conference. Bug your boss to fund you to go. This one is not to be missed by the carbonates crowd. Attend, even if you are a clastics person. There is much to be learned. Until next time, get outdoors and get your hands on the rocks. Then write a nice article for the Reservoir! n

Tom Sneddon

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RESERVOIR ISSUE 4 • JUL/AUG 2022

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RESERVOIR ISSUE 4 • JUL/AUG 2022

Petrophysics in the Green Economy

PART 1

WATER: FOR EVERY PURPOSE INTRODUCTION Water is the “New Oil”. Like oil, water is valuable and has myriad uses. Like oil, water is wasted and mis-used. In many parts of

Many parts of western North America, much of Australia, and elsewhere are struggling with drought and reduced river flows, affecting irrigation for agriculture and potable water supplies for cities. These needs can be met at a cost – the cost of treating water from deeper sources, some of them containing meteoric water with low to moderate salinity. This article describes how petrophysics can locate the least costly, most useful water sources that can satisfy these new and growing needs.

the world, water for human and agricultural use is already scarce, contaminated, or too distant from potential users. Industrial uses compete against those needed to sustain life. The green economy will seriously impact availability and cost of water. For example, electrolysis of water to produce hydrogen as a fuel requires huge amounts of distilled water – where will it come from when the fresh water supply is already strained? None of the “net zero” goals have a plan for where the necessary water will come from or what it might cost.

RESERVOIR ISSUE 4 • JUL/AUG 2022

POTABLE AND NEAR-POTABLE WATER We use the term aquifer to describe a rock that contains water, as opposed to the word reservoir as used when the rock contains oil or gas. Water that has been in the rock since the rock was formed is termed connate water. It’s salinity can vary from saturated (300,000 ppm NaCl equivalent) to brackish (10 - 30,000 ppm). However, many aquifers outcrop at the surface, sometimes 1000s of miles away. These aquifers capture rainfall, often called meteoric water, which mixes with whatever connate water was there. Over millions of years, such reservoirs become fresher than nearby aquifers that do not receive recharge water from surface. Salinity often increases with increased depth, so any aquifer with a lower salinity than the trend may contain meteoric water, possibly fresh enough to be treated for use by humans, animals, or crops. Aquifers are used for many purposes besides potable and near-potable water, such as wastewater disposal, geothermal energy, CO2 sequestration, lithium extraction, and sources for oilfield water floods.

But protecting water that can be treated economically for humans, animals, or crops is paramount. That includes water up to about 10,000 ppm TDS as it is cheaper to treat than seawater. Water sources are divided between surface sources (streams, springs, rivers, lakes) and underground, produced from shallow or deep wells. Exploration for new sources of water makes use of existing well logs from oil and gas wells or from slim holes drilled for shallow water. From a petrophysical point of view, we are usually interested in the portion of the well below surface casing, because they have well logs that can tell us something about the quality of the rock and water. We can also use the water analyses from well tests or produced water. This information may be found in oil company well files, commercial data bases, or regulatory agency files. Some technical societies, such as the Canadian Well Logging Society and London Petrophysical Society, publish water resistivity catalogs that help us find meteoric water at depth. The shallow interval in oil field wells behind surface casing is seldom logged. A gamma ray log for shale vs sand and a neutron log for porosity may exist. These give some rock quality information but nothing about the water quality. Water at these shallow depths is usually assumed to be of low salinity and a possible source of treatable water. Water quality is divided, somewhat arbitrarily, into fresh, brackish, and saline. Fresh water is defined as having less than 1000 mg/ litre total dissolved solids (TDS). Good drinking water has less than 300 mg/litre TDS (but many shallow water wells run up past 500 mg/litre. Water with more than 10,000 mg/litre TDS are termed saline or salt water. Typical sea water has a salinity around 32,000 mg/litre, somewhat less in the Arctic regions. Brackish water has a salinity between 1000 and 10,000 mg/litre TDS. Brackish waters are common but need some treatment before use and deep wells are needed to produce them. Brackish water is often encountered during the drilling of oil and gas wells. Rock and water samples, and petrophysical well logs, are available from 10’s of millions of oilfield wells. Considerable technical data can be derived about such aquifers and the water contained in them.

To put these salinities into terms of water resistivity (RW) at 25C (77F), the fresh water cutoff of 1000 mg/l is about 5.5 ohm-m, the brackish water cutoff of 10,000 mg/l is 0.55 ohm-m, and typical seawater of 32,000 mg/l is 0.20 ohm-m. Saturated salt water at 300,000 mg/l would have an RW around 0.030 ohm-m at 25C. These values are near room temperature. Water resistivity decreases with increased temperature, which in turn increases with increased depth in the Earth. Arp’s Equation is used to convert water resistivity from one temperature to another: 1: FT = SUFT + (BHT - SUFT) / BHTDEP * DEPTH 2: KT1 = 6.8 for Fahrenheit units KT1 = 21.5 for Celsius units 3: RW@FT = RW@TRW * (TRW + KT1) / (FT + KT1) TRW is the temperature at which the RW was measured. This could be a lab (surface) temperature or a formation temperature. FT is formation temperature OR any arbitrary temperature for which an RW is needed. Underground sources of drinking water (USDW) is the current term used to cover fresh and brackish water resources that could be exploited by drilled wells, in contrast to water from surface sources such as lakes and rivers. The base of fresh water (BFW) is the true vertical depth of the deepest aquifer that can produce water of a specified TDS. BFW can be contoured to provide insight into the disposition of USDW. Porosity-thickness and permeability-thickness maps can be generated from petrophysical analysis results. These give volumetric and productivity information that will aid water source development. Some governments are taking more interest in USDWs. The US EPA defines any aquifer with less than 10,000 mg/litre TDS as potentially useful water for humans. Many aquifers in the USA are protected by the EPA, which means that these aquifers cannot be used for disposal of oilfield or industrial wastewater. Other restrictions on use may also be in force in specific cases. Some aquifers are exempt from protection rules due to existing licenses that permit injection. Shallow water wells are logged by observation of the drill cuttings and potential porous and permeable intervals are noted. Copies of the report are given to the well owner and to appropriate

Water sources are divided between surface sources (streams, springs, rivers, lakes) and underground, produced from shallow or deep wells.

RESERVOIR ISSUE 4 • JUL/AUG 2022

CWLS 1987 RW CATALOG FRESH / BRACKISH (< 11,000 ppm) UID

LAT

LONG

RW@25C

CALC TDS

4627

100132800711W300

49.59515

-107.44266

3.730

1,158

5285

109160600113W300

49.01274

-107.71742

3.133

1,413

5113

100053100211W300

49.16563

-107.46691

3.039

1,463

4663

109160600309W300

49.18748

-107.19135

2.999

1,485

4957

100121900403W300

49.31488

-106.40085

2.948

1,515

5358

109160605018W200

53.29223

-104.61148

2.945

1,516

government agencies who assess and map aquifer quality and thickness. A pump-down test is used to determine flow capacity in gallons or litres per minute.

If there is no Water Catalog in your area, form a committee and get after it - get an expert to help review the chemistry for signs of mud filtrate contamination.

Very few petrophysical logs are run in shallow wells, although I ran a single point resistivity log using a crowbar taped to the end of the logging cable to find the porous interval in a newly drilled town water well (way back in 1964). Potable fresh water is high resistivity compared to clay and shale.

USING LOG ANALYSIS TO FIND METEORIC WATER

Deep wells drilled for water are logged with conventional oilfield tools. Petrophysical analysis can tell you quite a bit about an acquifer – salinity, porosity, permeability, flow capacity, even potential flow rate. The need for drinking and agricultural water is paramount, but many industrial and energy related uses are growing rapidly as well. Whether you are involved with protecting underground water or exploiting it for hydrogen production, carbon storage, lithium extraction, geothermal power, wastewater disposal, or enhanced oil recovery, you need to know about the water sources near your project. Petrophysics, with help from other geosciences, will confirm the quality and quantity of water available – social needs and a strong moral compass will tell us how to share the most valuable resource in the universe.

USING WATER ANALYSES TO FIND METEORIC WATER Gathering water sample reports from oilfield tests or production are a good place to start a search for near-potable water. Each jurisdiction handles the collection and filing differently, so some local knowledge will be needed. Once the reports or summaries are located, make a spreadsheet containing things like well name and location, test depth, formation name, water resistivity, and NaCl equivalent salinity. Above is a small sample from the CWLS 1987 Water Catalog, after a sort to bring the lowest salinity to the top of the list. There were 600+ samples in the <11,000 ppm category, gleans from 5500+ samples. The CWLS 2002 Water Catalog has 10 times as many water samples and they are already sorted into “normal” and “recharge” samples. Some samples may be contaminates with mud filtrate so be sure that several samples confirm a possible source of near-potable water.

RESERVOIR ISSUE 4 • JUL/AUG 2022

Most oilfield wells have no logs in the interval behind surface casing so shallow water sources are hard to find. If a gamma ray and neutron log were run to surface, it gets easier as we can assume all porous intervals are water bearing down to a certain depth, determined from existing water wells. The lack of a resistivity log over the shallow interval means we cannot determine water quality (salinity). In ancient wells with only resistivity and SP, analysis is more difficult. The SP is usually flat and featureless so we must rely on resistivity. High resistivity is fresh or brackish water. Low resistivity is shale, clay, marl, or saline water. Beyond that, we are blind. In wells that have a reasonable log suite, there are some techniques that are useful to evaluate water quality and well performance. The usual results from analysis of well logs are shale volume (Vsh), total and effective porosity (PHIt, PHIe). Lithology (mineralogy), water saturation (Sw), and permeability (Perm). The first three results tell us how much water is present and what kind of rock it is in. The last item can be used to estimate initial flow rate of the water. In water zones, we assume water saturation (Sw) is very near 100% and use that fact to calculate the apparent water resistivity (Rwa). From that value, we can calculate the equivalent sodium chloride salinity (WSa) of the water, which in turn is a close approximation of the total dissolved solids (TDS). Below are the details of the petrophysical analysis steps required for a complete evaluation of aquifer and water quality. STEP 1: Calculate shale volume. The most effective method is based on the gamma ray log: 1: Vshg = (GR - GR0) / (GR100 - GR0) Adjust gamma ray method for young rocks using the Clavier equation, if needed: 2: Vshc = 1.7 - (3.38 - (Vshg + 0.7) ^ 2) ^ 0.5 To account for radioactive sands and volcanics, calculate Vsh from density neutron crossplot 3: Vshxnd = (PHIN - PHID) / (PHINSH - PHIDSH)

The minimum of these three values is shale volume Vsh. The spontaneous potential (SP) method is not very useful in fresh and brackish water zones. STEP 2: Calculate total and effective porosity. The best method available for modern, simple, log analysis involves the shale corrected density neutron complex lithology crossplot model. Shale correct the density and neutron log data and calculate total and effective porosity: 4: PHIdc = PHID – (Vsh * PHIDSH) 5: PHInc = PHIN – (Vsh * PHINSH)

FIGURE 1: Graph of Arp’s Equation showing the relationship between water resistivity, temperature, and salinity

6: PHIt = (PHIN + PHID) / 2 7: PHIe = (PHInc + PHIdc) / 2 This model is quite insensitive to variations in mineralogy. A gas correction is needed for greater accuracy in gas zones, but this will not affect the results in water zones. A graph representing this model is shown below. The shaly sand version of the density neutron crossplot is not recommended because it underestimates porosity in sands with heavy minerals. If density or neutron are missing or density is affected by rough hole conditions, choose a method using the sonic and/or neutron logs will suffice. STEP 3: Calculate mineralogy. If the well penetrates a young sand shale sequence, this step is not usually required as there are few heavy minerals in the sands. In Lower Cretaceous and older rocks, choose a method from the Handbook Index appropriate for the log curves available. STEP 4: Calculate permeability and flow capacity. If the analysis is for water quality (salinity, TDS) only, this step is not required. If the aquifer is being assessed for injection of wastewater or production of industrial or drinking water, this step is essential.

GRAPH 1: Rw Models - Red line = Crain, Black = Bateman and Konen, Blue= Kennedy

Estimate irreducible water saturation from porosity-saturation product using assumed Buckle’s Number (KBICKL). Graph at right shows the intimate relationship between porosity (vertical axis), irreducible water saturation (horizontal axis), permeability (diagonal lines), and Buckle’s Number (hyperbolic lines running from top left to lower right). A constant Buckle’s Number indicates a uniform rock type. The equation is: 8: SWir = KBUCKL / PHIe / (1 - Vsh) Calculate permeability from Wyllie-Rose equation: 9: Perm = CPERM * (PHIe^6) / (SWir^2) For coarse to medium grained sands, KBUCKL = 0.0300 to 0.0500, higher for fine grain, lower for carbonates. Default = 0.0400. Default for CPRM = 100,000. Adjust to calibrate to core permeability. Flow capacity is: 10: Kh = Perm * (BASE - TOP) Where TOP and BASE are measured depths of top and base of this aquifer. Note that in a horizontal well, Kh is Perm times the length

GRAPH 2: Cw Models - Red line = Crain, Black = Bateman and Konen, Blue = Kennedy.

RESERVOIR ISSUE 4 • JUL/AUG 2022

of the wellbore exposed to the aquifer. STEP 5: Calculate apparent water resistivity at formation temperature. In relatively clean rocks, the Archie model using appropriate electrical properties is sufficient: 11: Rwa@FT = (PHIt ^ M) * RESD / A It is useful to also calculate Rwa at 75F or 25C using Arp’s equation, to allow us to compare log derived values to lab water analysis reports or water catalogs: 12: Rwa@75F = Rwa@FT * (FT+ 6.8) / (75 + 6.8) with temperatures in Fahrenheit OR 13: Rwa@25C = Rwa@FT * (FT+ 21.5) / 275 + 21.5) with temperatures in Celsius RECOMMENDED PARAMETERS: for carbonates A = 1.00 M = 2.00 ( Archie Equation as first published) for sandstone A = 0.62 M = 2.15 (Humble Equation) OR A = 0.81 M = 2.00 ( Tixier Equation - simplified version of Humble Equation) STEP 6: Convert Rwa@FT to NaCl equivalent (ppm) and TDS (ng/l) Calculate formation temperature: 14: FT = SUFT + (BHT - SUFT) / BHTDEP * DEPTH IF FT is Celsius, convert to Fahrenheit 15: THEN FT1 = 9 / 5 * FT + 32 16: OTHERWISE FT1 = FT Using Crain’s Equation inverted for water salinity WSa in ppm NaCl equivalent: 16: WSa = 400000 / FT1 / ((RWa@FT) ^ 1.14) An alternate method Baker Atlas (2002) 17: WSa = 10 ^ ((3.562 - (Log (RW@75 - 0.0123))) / 0.955) Convert WSa (ppm) to TDSa (mg/l) using the density of the water plus its solute: 18: DENSw = 1.00 + (WSa * 2.16 / 1000000) 19: TDSa = WSa * DENSw CAUTION: If hydrocarbons are present, Rwa will be higher and TDSa will be lower than the truth. Always investigate the well history file, especially the sample log, for indications of oil or gas in the interval to be studied.

LOG ANALYSIS EXAMPLE – AQUIFER EVALUATION The example in Figure 2 shows how conventional petrophysical analysis can assist in evaluation of potential water wells. The salinity curve, derived from the porosity and resistivity log data, can be used to determine the base depth to any given water quality (salinity).

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FIGURE 2: Track 1 contains gamma ray and caliper, Track 2 is deep resistivity, Track 3 is density and neutron porosity. This raw data is used to calculate shale corrected porosity (Track 4), apparent water resistivity (Rwa in Track 5), and salinity in Track 6. The right-hand track shows the lithology with shale volume shaded black. The salinity curve is shaded between the curve and 10,000 ppm total dissolved solids (TDS) to help identify useable water sources. Note that TDS values in shaly zones

ACKNOWLEDGEMENT

Thanks to Dorian Holgate of Aptian Technical for providing the example in Figure 2.

REFERENCE

1. Crain’s Petrophysical Handbook online, 2022 Chapters 5, 11, 12, 13, 15,

GO TAKE A HIKE

Rockbound Lake and Castle Mountain, Banff N.P., Alberta

Philip Benham, Clinton Tippett, Cathy Wang, and Daniel Chen

Trailhead: Take exit 50 from Trans-Canada Hwy. and proceed northeast about 1 km. At Castle Junction turn right (southeast). 100 m along is the trailhead parking lot (north side of the highway). Distance: Return distance is about 16.8 km to lake with another 2 km to ascend Helena Ridge, opposite Castle Mountain. Elevation Gain: 700 m to Rockbound Lake and about 1200 m if one climbs the ridge dominated by Helena Peak.

astle Mountain, originally known by the Blackfoot as Miistukskoowa, was named by geologist James Hector in 1858 during the Palliser Expedition. Between 1946 and 1979 it was renamed Mount Eisenhower. Under pressure of public opinion the famed general was then geographically relegated to the southern peak on Castle Mountain. Hector correctly observed “quartzite and indurated sandstone of a pinkish hue” [the Cambrian Gog Gp.] and a peak of thick-bedded limestones [the Cambrian Cathedral and Eldon formations] “giv(ing) rise to the castellated appearance” (Palliser, 1863). Castle Mountain is the easternmost part of the Main Ranges. The Front Ranges (Figure 5) comprise complex thrusted packages dominated by Devonian to Mississippian strata structurally overlaying recessive Mesozoic clastics. The Eastern Main Ranges, in contrast, are made up of simpler flatlying thrust packages of Late Proterozoic slates, sandstone, and coarse ’grits‘ of the Miette Gp. 1

FIGURE 1: Map of Rockbound Lake Trail. Note the horseshoe shape of the mountains and the two steps on either side of Rockbound Lake. The northern step roughly coincides with the recessive Stephen Formation, while the southern, between Rockbound and the smaller Tower Lake to its southeast, occurs with the Cathedral formation. The steps are plucked out by past glaciers, which occupied the cirques. P=Parking lot. FIGURE 2: View of Castle Mountain from Bow River, looking to the northeast. Image By Jakub Fryš (CC BY-SA 4.0, https://commons.wikimedia. org/w/index.php?curid=78701870)

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FIGURE 3: Sketch of the Geology of Castle Mountain as seen from Copper Mountain roadside stop, on Highway 1, near the turnoff to the Rockbound Lake trailhead. Note the flat lying Castle Mountain Thrust carrying a very thick stack of sediments and metasediments from the slates of the Miette Group at its base through a stratigraphic sequence involving the entire Cambrian including the Pika, Arctomys and Waterfowl formations. The latter two are only visible by ascending the mountain (Figure 4). Source Price et al. (1972), drafted by Emma Fernando. FIGURE 4: Geology in the vicinity of Castle Mountain. The trail is marked with a dashed red line. Trail passes Tower Lake and then Rockbound Lake. The key strata exposed along the hike include Gog Group (Cgg), Mount Whyte (Cmw), Cathedral (Cca), Stephen (Cst), Eldon (Cel), Pika (Cpk), Arctomys (Car) and Waterfowl (Cwf) Fm. Note Simpson Pass Thrust (floor of Bow Valley) and the Castle Mountain Thrust, best viewed from Hwy 1 (Figure 3). GSC Map 1297A : Price and Mountjoy (1972).

(Figure 4), sandstone-dominated clastics of the Early Cambrian Gog Gp. and a series of alternating carbonates and shales of Cambrian to Ordovician age.

The Miette Gp. consists of at least 4 km of submarine fan deposits deposited during the rifting and separation of the Rodinia Supercontinent at the end of the Proterozoic (between 750 and 540 Ma). The contrast in geomechanical properties between the crystalline basement and the heterolithic Miette resulted in a detachment surface near the bottom of the Miette for the Simpson Pass Thrust (Figure 5) (Taerum, 2011). The Castle Mountain Thrust (likely a leading edge imbricate of the Simpson Pass Thrust that has been somewhat overridden) carries the Proterozoic Upper Miette Gp.,

RESERVOIR ISSUE 4 • JUL/AUG 2022

FIGURE 5: This figure combines a view of the topography of the Front and Main ranges at the latitude of Lake Louise with a simplified crosssection view of the structural configuration of the Rockies (thrust faults are marked red). Within the Main Ranges, the detachment occurs within the Miette Group, its eastern limit at the Castle Mountain thrust (CM). To the west of Lake Louise, the Simpson Pass Thrust (SP) ramps up-section, either associated with basement structure related to rifting of Rodinia (Figure 8) or just due to thinning of the sediment wedge. Simpson Pass Thrust was one of the first active in the Rockies (162Ma), and its growth lead to foreland loading, initiation of the Western Interior Seaway and accumulation of clastic wedges belonging to the Fernie and Kootenay / Nikanassin Groups. In the Front Ranges the basal detachment is within in shaly portions of the Eldon Fm and contains strata as young as Triassic in the Footwall. Front Range faults of note include the Rundle t (RU) , Sulphur Mountain (SM), Johnston Creek (JC), Bourgeau (BG), Inglismaldie (IN); Exshaw (EX) and McConnell (MC) thrust faults. They all die out northwards, with displacement taken up by the Brazeau Thrust (BZ) and other un-labeled faults in the north. The easternmost of these McConnell Thrust, is the last major thrust carrying Paleozoic strata to the surface. In its footwall and further east in the subdued topography of the Foothills, are exposures of Late Cretaceous and Paleocene strata. The white line west of Lake Louise is the provincial border, defined by the continental drainage divide. Source: Bégin and Veilleux, (2017), whose guide provides an excellent structural overview of the Rockies.

FIGURE 6: Sheared phyllites (metamorphosed shale) of the Miette Gp are encountered early on the trail. FIGURE 7: Thinly bedded bioturbated carbonates of the upper Cathedral Fm are exposed at the southern shore of Rockbound Lake.

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FIGURE 8: Regional reconstruction of the Kootenay to Lake Louise region during the lower Cambrian. In the latest stages of the rifting of Rodinia, the extended crust contained a series of rotated blocks of Windermere Supergroup strata, including the Miette Group (shown below in grey). The “basin and range” setting with active half grabens was infilled westwards by braided streams and marginal marine deposits (lower MacNaughton and Jasper Formations – coloured orange) and westwards into shallow marine clastics (Hamill Group in yellow). Some of the deep seated faults gave rise to volcanics (meta-basalts may be found atop syn-rift sediments in the Vavenby area (green). The subsiding topography was then overlain by increasingly marine clastic strata (rest of the Gog Gp) and eventually by the middle Cambrian carbonates and their distal equivalents. The deep seated faults, however, remained zones of weakness. The Cathedral Escarpment and associated Pb-Zn mineral deposits likely formed along these deep fluid conduits (Johnston et al., 2009). Compression during the initial growth of the Rockies may have resulted in reactivation of the fault old faults as the Simpson Pass Thrust (speculatively illustrated in red) Figure adapted from Lickorish and Simony (1995) with modifications by Hughes (2001) and Bégin and Veilleux (2017).

FIGURE 9: East side of Castle Mountain as seen from top of Helen Ridge. Lakes, resistant ridge, steep ledge plucked clean by glacial movement, talus slopes, covering most of Stephen outcrop.

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FIGURE 10: Zebra dolomite is a fairly common feature in the Lower Paleozoic carbonates of the Rockies (in this case within the Eldon formation). It is typically associated with hot, overpressured saline fluids during the formation of the fold and thrust belt, but its exact mechanism of formation remains a mystery (Swennen et al., 2003). Recently Kelka et al. (2017) have argued that pressure fluctuations from compaction waves are the trigger. FIGURE 11: Birdseye's or stromatactis texture in carbonate mudstones of the Eldon Fm, considered a signature of peritidal settings, though its origin remains debated. Stromatactis may be syndepositional calcite infill of gas bubbles in the sediment or it may be recrystallized algal colonies. FIGURE 12: Blocks of characteristic red and grey weathered mottled burrowed dolomite and calcite of the Pika formation can also be found in the valley. FIGURE 13: Cross-bedded grainstones with low angle cross-bedding are exposed in upper Cathedral outcrops on the ascent between Tower and Rockbound Lake.

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Early Cambrian Gog Gp., and middle to late Cambrian strata over Proterozoic to Triassic strata (Figures 3, 4). Movement on the overriding Simpson Pass Thrust deformed its footwall strata, now exposed in Castle Mountain, into a broad gentle synclinal fold that runs northwest-southeast. Rockbound Lake lies in the axis of this fold. It was R.G. McConnell who first properly described the regional fault geometries, referencing the Cambrian strata named for Castle Mountain, and relating them to Mount Yamnuska, well to the east, as: “The dominant structural features of the eastern district (mountain front) .. .are due to a series of gigantic thrust faults, which have carried the older formations forward, and placed them ... above the highest beds of the series. One of the largest and most … important of these occurs along the eastern base of the chain, and brings the Cambrian limestone of the Castle Mountain Group [an obsolete term] over the Cretaceous of the foot-hills. This fault has a vertical displacement of more than 15,000 feet, and an estimated horizontal displacement of the Cambrian … beds of about seven miles in an easterly section” (McConnell, 1886). Even today this is a passable description of the structure at Yamnuska, though more recent estimates (McMechan, 1981) put the lateral displacement of what is now called the McConnell Thrust (so beautifully displayed at Mount Yamnuska) at approximately 40 km (24.9 miles). Relatively early on the hike, sparse, deformed exposures and loose rubble from the Miette and Gog groups are exposed along the trail as it eventually climbs and then swings northwest into the grand natural amphitheater that surrounds Rockbound Lake. Near the southern shore of the lake and in the lower cliffs are extensive exposures of the Cathedral Fm. (Figure 7). The Cathedral consists primarily of burrow-mottled dolomitic limestone, along with minor pelletoid grainstones and oolites. Part of the way up Castle Mountain is a distinctive recessive notch, marking the shales of the Stephen Fm. here well east of the submarine Cathedral Escarpment that is associated with the legendary Burgess Shale. To the north the cliffs continue with a 340 m thick package of shallow

FIGURE 14: View northwest across Rockbound Lake from Helena Ridge. The bedded strata in the foreground and the cliffs surrounding the lake belong to the Eldon formation. Pika (Cpk) and Arctomys (Car) formations rise in the distance. FIGURE 15: The glacially over-steepened slopes in the valleys surrounding Rockbund lake occasionally release large blocks. This huge boulder of Eldon Formation displays deep karst crevices on its flanks and crest. It may have fallen shortly after the termination of the Ice Age. FIGURE 16: View northwest from the southern shore of Rockbound Lake, where the dark lineations of glacially incised grooves in the uppermost strata of the Cathedral Formation outcrops can be observed. While not apparent in the photo, if you investigate closely would will find a mottled pattern, evidence of abundant burrowing.

marine, burrowed to cryptalgal laminated, argillaceous limestone and calcareous mudstones of the Eldon Fm. This formation is named after the nearby Eldon Switch on the CPR rail line. By ascending Helena Ridge, opposite Castle Mountain, one will be able to examine the Middle to Upper Cambrian strata of the Pika, Arctomys, and Waterfowl. Boulders of these distinctive formations also litter the valley floor for those not up for the climb. All of the Cambrian and older strata thicken westwards from the Front Ranges, but more dramatically so in the Main Ranges. For example, the Early Cambrian Gog triples from 350 to 1,000 m and the combined Cambrian carbonates, 950 m thick at Castle Mountain, nearly double to 1,700 m near Lake Louise (Price, 2000). These dramatic thickness variations, in combination with deep-seated basement structures of Rodinian heritage, undoubtedly influenced where the succession of thrust faults that make up the Main Ranges were initiated. They also likely resulted in the change in structural style from the broad shallowly dipping blocks in the Eastern Main Ranges to the more complex series of thrust faulting observed in the Front Ranges.

SILVERTON:

In 1881, frontiersman John Healy was shown a sample of “copper ore” collected from a site on Castle Mountain by Edwin Hunter of the Chiniki Nakoda band. An assay indicated the presence of copper and lead. A year later Healy returned and staked his claim as Copper Mine. In November 1883 construction of the Canadian Pacific Railway allowed easy access to the region and within months a ramshackle town with 3,000 residents had sprung up. Perhaps as a marketing ploy, the town acquired the name Silver City (later Silverton) and was replete with hotels, casinos, pool bars, and stores to supply those working as many as five mines. However, the boom town had only six ladies and no dancehalls, schools, or churches. If silver wasn’t enticing enough, it is rumoured that owners of one claim (the Homestake Mine), salted their site with gold dust, sold shares for $5 (about $125 in present day value) and then fled the country with $10,000 of investors’ money (today’s equivalent of a cool quarter-million dollars). By 1885 most of the miners had left for greener (or more golden) pastures. The town’s last resident, 94 year-old Joseph Smith, left in 1937 as his eyesight began to fail. Shortly thereafter, Parks Canada chose to burn all remaining buildings to the ground and returned the site to natural parkland.

The original claim site, reported by Godfrey (1985) as Baker Creek, is located on the northwest flank of Castle Mountain and contains sphalerite [(Zn,Fe)S] and galena [PbS] mineralization but no copper, silver, or gold. Given its composition and its hosting in the Cathedral Fm., the mineralization may be of a similar origin to the deposits later exploited in Yoho National Park (Kickinghorse and Monarch Mines) (Johnston and Johnston, 2019).

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FIGURE 17: Mud-cracks in calcareous shales are common in the Middle Cambrian Arctomys Formation. The green, gray and red shales of the Arctomys appear to be deposited in lagoons, mud flats and shallow saline lakes. The Arctomys outcrops on the upper parts of Helena ridge, but boulders of it containing mud-cracks, salt crystal casts and ripples can also be found on the valley floor. FIGURE 18: Photo is of Joseph Smith and Dave White at Silver City, about 1920. Photo and historical information in blue story box from: Whyte Museum of the Canadian Rockies, Peter and Catharine Whyte fonds number V683/107/NA66/460. http://whytemuseum.blogspot. com/2019/05/in-castle-mountains-shadow-story-of.html

FIGURE 19: Inmates at the Castle Mountain Internment Camp in 1915. During WWI various Ukrainians, Germans, Austrians and “dubious” others were rounded up into work camps where they labored to upgrade Banff park facilities including Banff Springs Hotel and golf course, the buffalo paddock and an ice palace for the Banff winter festival. Photo is public domain, Glenbow Museum archives, NA-3959-2.

REFERENCES: Aitken, J.D. 1997. Stratigraphy of the Middle Cambrian platformal succession, southern Rocky Mountains. Geological Survey of Canada, Bulletin 398, 322 p. https:// doi.org/10.4095/209146 Bégin, N. and Veilleux, B. 2017. Effects of sedimentary facies on structural styles in the Canadian Rocky Mountain Fold and Thrust Belt. 2017 Meeting of the GSA Rocky Mountain Section: Geological Society of America, Field Guide 48, p. 1-46. https://doi.org/10.1130/2017.0048(01) Deiss, C.F. 1939. Cambrian formations of southwestern Alberta and southeastern British Columbia. Bulletin of the Geological Society of America, v. 50, p. 951-1019. Desjardins, P., Buatois, L., Pratt, B., and Mangano, M. 2012. Sedimentological–ichnological model for tide‐ dominated shelf sandbodies: Lower Cambrian Gog Group of western Canada. Sedimentology, v. 59, no. 5, p. 14521477. https://doi.org/10.1111/j.1365-3091.2011.01312.x Desjardins, P., Pratt, B., Buatois, L., and Mangano, M. 2010. Stratigraphy and sedimentary environments of the Lower Cambrian Gog Group in the southern Rocky Mountains of western Canada: evolution of transgressive sandstones on a broad continental margin. Bulletin of Canadian Petroleum Geology, v. 58, p. 1-37. https://doi. org/10.2113/gscpgbull.58.4.403 Freebold, J. 2012. Alberta History - The Old North Trail (Cree Trail), 15,000 Years of Indian History; 1820-1850. Publisher Lulu.com. Godfrey, J.D. 1985. Lead and Zinc. Alberta Geological Survey Open File #8. https://static.ags.aer.ca/files/ document/OFR/OFR_1985_08.pdf Hughes, N. 2001. Tectonic significance of the Early Cambrian (and older?) Eagle Bay assemblage, Vavenby area south-central British Columbia. Ph.D. thesis, University of Montana. https://www.semanticscholar.org/ paper/Tectonic-significance-of-the-Early-Cambrian

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Johnston, K. and Johnston, P. 2019. Kickinghorse Mine Adits (Hike 56). In: Go Take A Hike. P. Benham, B. McKenzie, J.Y. Chatellier, and C.R. Tippett (eds.). Canadian Society of Petroleum Geologists, Special Publication, p. 202-205. Johnston, P., Johnston, K., Collom, C., and Pollock, R. 2009. Palaeontology and depositional environments of ancient brine seeps in the Middle Cambrian Burgess Shale at The Monarch, British Columbia, Canada. Palaeogeography, Palaeoclimatology, Palaeoecology, v. 277, p. 86-105. https://doi.org/10.1016/j. palaeo.2009.02.013 Kelka, U., Veveakis, M., Koehn, D., and Beaudoin, N. 2017. Zebra rocks: compaction waves create ore deposits. Scientific Reports, v.7, no. 14260. https://doi. org/10.1038/s41598-017-14541-3 Lickorish, W.H. and Simony, P.S. 1995. Evidence for late rifting of the Cordilleran margin outlined by stratigraphic division of the Lower Cambrian Gog Group, Rocky Mountain Main Ranges, British Columbia and Alberta. Canadian Journal of Earth Sciences, v. 32, p. 860-874. https://doi.org/10.1139/e95-072

North America, which, in latitude, lies between the British boundary line and the height of land or watershed of the northern or frozen ocean respectively, and in longitude, between the western shore of Lake Superior and the Pacific Ocean during the years 1857, 1858, 1859, and 1860. London: G.E. Eyre and W. Spottiswoode. p. 101102. Price, R.A., Balkwill, H.R., Charlesworth, H.A.K., Cook, D.G., and Simony, P.S. 1972. The Canadian Rockies and tectonic evolution of the southeastern Canadian Cordillera. 24th International Geological Congress, Guidebook for Excursion A15-C15. Geological Survey of Canada, 129 p. Price, R.A. and Mountjoy, E.W. 1972. Geological Survey of Canada Map 1297A: Mount Eisenhower (west half), Alberta 82 O/5W. https://doi.org/10.4095/108964 Swennen, R., Vandeginste, V., and Ellam, R. 2003. Genesis of zebra dolomites (Cathedral Formation: Canadian Cordillera Fold and Thrust Belt, British Columbia), Journal of Geochemical Exploration, v. 78-79, p. 571-577, https:// doi.org/10.1016/S0375-6742(03)00065-7

McConnell, R.G. 1886. Report on the geological structure of a portion of the Rocky Mountains, accompanied by a section measured near the 51st parallel. Geological and Natural History Survey of Canada, Report D, volume II, Part 2 of the Annual Report Series, p. 5D-41D. Montreal, Dawson Brothers. https://doi.org/10.4095/296711

Taerum, R.L. 2011. Effect of mechanical stratigraphy on structural style variations in the central Alberta fold and thrust belt (unpublished Ph.D. thesis). University of Calgary, Calgary, Alberta. http://dx.doi.org/10.11575/ PRISM/24411; http://hdl.handle.net/1880/48515; https:// prism.ucalgary.ca/bitstream/1880/48515/1/2011_Taerum_ PhD.pdf

McMechan, M. 2001. Large-scale duplex structures in the McConnell thrust sheet, Rocky Mountains, Southwest Alberta. Bulletin of Canadian Petroleum Geology, v. 49, p. 408-425. https://doi.org/10.2113/49.3.408

Whyte Museum 2019. In Castle Mountain’s Shadow: The Story of Silver City (blogspot http://whytemuseum. blogspot.com/2019/05/in-castle-mountains-shadow-storyof.html)

Palliser, J. 1863. Exploration - British North America: The journals, detailed reports, and observations relative to the exploration, by Captain Palliser, of that portion of British

2022 CSPG REGIONAL GRADUATE STUDENT SCHOLARSHIP WINNERS The regional graduate student scholarships exist to provide financial support for Geology or Earth Science graduate students (MSc. or PhD candidates) who are pursuing a thesis-based degree with a dissertation in a field of Earth Science in areas related to the discovery, delineation or recovery of oil and gas resources.

Maziyar Nazemi Interview PhD: Maziyar Nazemi

(Simon Fraser University)

THESIS TITLE:

3-D Reconstruction of the Georgia Basin and Potential for Carbon Sequestration in the Lower Mainland B.C.

Nicole Virginillo Interview Nicole Virginillo (University of Calgary)

MSc:

THESIS TITLE:

The Relationship Between Hydraulic Fracture Injection Properties and Facies in the Montney and Predict Faulting and Induced Seismicity

Andrea Sanlorenzo Interview MSc: Andrea Sanlorenzo

(University of British Columbia) THESIS TITLE:

Petrophysics, Carbon Dioxide Sequestration and Storage Potential of the Montney Formation with Associated Enhanced Oil Recovery Potential.

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2022 UPCOMING EVENTS INFORMATION

VISIT UPCOMING EVENTS

CHECK OUT OUR FALL LINE UP

SEPTEMBER September 6-8th Tuesday – Thursday | 8:00 am to 4:30 pm

OCTOBER October 3-5th Monday – Wednesday | 9:00 am – 5:00 pm

CSPG Short Course

Sequence Stratigraphy: Non to Marginal Marine & IV Deposits

Integrated characterization of Oil Sands Reservoirs

Instructor: Brian A. Zaitlin Location: Core Research Centre

Instructor: Dr. Paul Durkin Location: Core Research Centre and CSPG Classroom

September 17th Saturday | 7:30 am – 5:00pm

October 17-18th

Field Trip

Monday & Tuesday | 9:00 am – 5:00 pm

Structural Geology Transect in the Eastern Canadian Rocky Mountains, Calgary (AB) to Field (BC)

Introduction To Geosteering

Speakers: Normand Bégin Location: TransCanada Highway 1

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CSPG Short Course Instructor: Janelle Springer Location: CSPG Classroom

RESERVOIR ISSUE 4 • JUL/AUG 2022

Detection and analysis of tectonically active fault zones and the introduction of new NeoTectonic (NET) maps of the Peace River Arch and the Deep Basin areas in Alberta and Northeast British Columbia (NEBC) Dr. Zeev Berger and the technical team of Image Interpretation Technologies Inc. Calgary, Alberta.

INTRODUCTION Integrated tectonic studies have been routinely used by the oil industry to assess the hydrocarbon potential of both mature and frontier basins. These studies integrate conventional exploration tools such as seismic and well data with unconventional exploration tools such as high-resolution magnetic surveys (HRAM) and remotesensing imagery data to identify and map key geological structures, determine their style and timing of deformation and assess their potential influence on the development of hydrocarbon plays.

In this article, we used both conventional and unconventional exploration tools to develop a new tectonic map of the Peace River Arch and the Deep-Basin in Alberta and NEBC. The map is focused on the recognition of tectonically active fault systems and related zones of tectonic instabilities that are likely to be susceptible to drilling induced seismicity events. The term Neo-Tectonic (NET) maps is proposed here to describe both regional and site-specific maps that are designed to identify tectonically active fault systems. The term Tectonically Active Fault Zones

(TAFZ) is also proposed to describe areas of tectonic instabilities that are mostly found at the intersections of two tectonically active faults. Multiple examples are provided here to illustrate the different data sets that were used to develop the NET maps and TAFZ’s that are shown in this study. We hope that this article will stimulate greater interest in the geoscience community to use this approach to map all the tectonically active areas of the Western Canadian Sedimentary Basin.

The new Neo- tectonic map (NET) of the Peace River Arch and the Deep Basin area. The new Neo-tectonic (NET) map of the Peace River Arch and the Deep basin areas is shown in figure 1. The map is based on the integration of well data, production and pressure information, seismic and non-seismic data, as well as historical record of earthquake activities in these areas. The key features that are shown on the map include: the outline of the Peace River Arch, the main faults of the Fort St John Graben (FSJG), the outline of the Western Arm of FSJG that have been inverted by Laramide compression, the traces of a regional scale Hinge-line fault that marks the eastern boundary of the area effected by the formation of the Deep Basin, the leading edge of the thrust front that is encroaching into the Deep basin from the west, and the location of HTD reservoirs that are known to be related to the presence of fault systems that were active in this area during DevonianMississippian times (Davies and Smith 2006).

• Faults that are mapped in purple color usually follow major basement lithological boundaries such as the Hey River Shear Zone (HRSZ, also known as the Great Slave Lake Shear Zone) and Snowbird Suture Zones (SBSZ).

• The green color was used to identify faults that were active during the Laramide Orogeny which began at early Triassic time and continue to be active until today. The same green color was also used to describe portion of the faults in the FSJG area that are presently responding to isostatic rebounding processes.

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• The blue color faults describe the initiation of the FSJG during the collapse of the Peace River Arch at early Mississippian time (Barclay et al, 1990). The same blue color is used to identify strike slip faults that are known to be associated with the development of HTD reservoirs in the Deep-Basin and the southern edge of the Peace River Arch (Davies and Smith, 2006). • The red color was used to describe the initiation of the Hingeline fault during early Jurassic time. The same red color is also used to identify the FSGJ faults which were active during the sag phase of the FSJG (mostly “Halfway time”).

FIGURE

Different Tectonically Active Fault Zones (TAFZ) are also recognized on this map and are labeled in different colored circles that are related to their association with different major fault systems.

The new Neo-tectonic (NET) map of the Peace River Arch and the Deep basin areas is shown in figure 1. The map is based on the integration of well data, production and pressure information, seismic and non-seismic data, as well as historical record of earthquake activities in these areas. The key features that are shown on the map include: the outline of the Peace River Arch, the main faults of the Fort St John Graben (FSJG), the outline of the Western Arm of FSJG that have been inverted by Laramide compression, the traces of a regional scale Hinge-line fault that marks the eastern boundary of the area effected by the formation of the Deep Basin, the leading edge of the thrust front that is encroaching into the Deep basin from the west, and the location of HTD reservoirs that are known to be related to the presence of fault systems that were active in this area during Devonian-Mississippian times (Davies and Smith 2006).

FIGURE 1 - A new Neo-Tectonic (NET) map of the Peace River Arch and the Deep-Basin area.

The legend of the map is designed to describe the style and timing of deformation of the main faults that are mapped in the study area. The different faults can be divided in the following categories: • Faults that are mapped in purple color usually follow major basement lithological boundaries such as the Hey River Shear Zone (HRSZ, also known as the Great Slave Lake Shear Zone) and Snowbird Suture Zones (SBSZ). • The blue color faults describe the initiation of the FSJG during the collapse of the Peace River Arch at early Mississippian time (Barclay et al, 1990). The same blue color is used to identify strike slip faults that are known to be associated with the development of HTD reservoirs in the Deep-Basin and the southern edge of the Peace River Arch (Davies and Smith, 2006). • The red color was used to describe the initiation of the Hingeline fault during early Jurassic time. The same red color is also used to identify the FSGJ faults which were active during the sag phase of the FSJG (mostly “Halfway time”). • The green color was used to identify faults that were active during the Laramide Orogeny which began at early Triassic time and continue to be active until today. The same green color was also used to describe portion of the faults in the FSJG area that are presently responding to isostatic rebounding processes.

Integration of regional seismic lines. Several seismic lines were used to map the key structural features of the study area, identify their structural style and timing of deformation, and determine their influence on the presence of areas of tectonic instability and seismicity zones. The interpreted seismic line that is shown in figure 2B and 2C illustrates the structural setting of the Fore-Foothills area in NEBC. This area exhibits the typical structural style of a Foreland basin. That is, the structures above the detachment level show compression and shortening and the structures below the detachment level show extension and subsidence related to the loading of the thrust sheets from the west. The two key features to observe in this area are: 1) The major thrust front that form the eastern boundary to the gently folded anticlines that host many of the conventional Triassic gas fields of the Fore-Foothills area, and 2) The inverted Hinge-line fault that marks the eastern boundary of the overpressured Montney resource play. Both structural features are presently active and are likely to be the source of tectonic instability in their vicinities. The seismic line that is shown in figure 2C was collected across the Hinge-line fault in the early nineties. The line was flattened on the base of the Cretaceous horizon to reflect the structural setting of the Hinge-line fault during the development of the Deep Basin to the west. As illustrated, this fault is made of several “down to the basin” normal faults that form a wide fracture zone in the deeper carbonate section of the Debolt and the Wabamun formations. It is interesting to note that a deep well that was drilled into this fracture zone in the early nineties tested high-pressure gas at the Debolt level but didn’t maintain commercial production. The area over and around the Hinge-line fault is tectonically active.

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The regional seismic line across the southern parts of the Deep Basin area that is shown in figure 2C illustrates that this area exhibits similar structural setting as the Fore-foothills area; however, the entire section is less deformed and the structures below the detachment level are more subtle. Yet, the main structures in this area are also active and produce the same pattern of tectonic instability as the one observed in the NEBC area. The seismic line in figure 4D illustrates the unique inversion of the Western Arm of FSJG which lead to the development of the Monias (Halfway) gas field. This is the only portion of the

FSJG that is interpreted to have been affected by Laramide compression, but the entire inverted portion of the graben doesn’t seem to be tectonically active. It is possible that the tectonic stability of the inverted portion of the Western Arm is related to the fact that this unique tectonic element is in an area of normal pressure of the Montney formation. Finally, figures 2E and 2F, show the seismic expression of the HRSZ which is characterized by the presence of a wide zone of faults and fractures that trend oblique to the thrust front and thus are being reactivated as shear faults during Laramide compression.

FIGURE

The interaction between the shear faults and the thrust front or the hinge line fault is the prime cause for the development of Tectonically Active Fault Zones (TAFZ) in this area. FIGURE 2 - Examples of interpreted seismic lines that were used to constrain the new Neo-Tectonic (NET) map that is shown in figure 2A. The geological cross section and seismic lines that are shown in figures 1B illustrates the structural style of the Deep basin in NEBC. Figure 2C illustrates the seismic expression of the Hinge-line fault near a deep well that was drilled in this area in the early nineties. Figure 2D shows a dip-line across the southern part of the Deep-Basin running across the Ricinus

(Cardium) and Ferrier (Banff) gas fields. The unique expression of the Monias gas field before and after Laramide inversion is shown in figure 2E. The structural style of the Hey River Shear Zone (HRSZ) is illustrated in figures 2E and 2F. Location of seismicity zones are marked on the seismic lines are tied with blue arrows to the regional tectonic map. Figure 2B and 2D are courtesy of Sigma.

Integration of high-resolution magnetic (HRAM) surveys and remote-sensing data.

surface and manifest clear diagnostic expressions of faults and thrusted anticlines. The remote-sensing images were also used to identified geomorphic features such as deeply entrenched stream valleys or structurally controlled distributary channels that reflect the presence of tectonically active buried and obscured structures (Berger 1994).

The contributions of High-resolution magnetic (HRAM) survey and remote-sensing imagery data to the generation of the new Neo-Tectonic (NET) map are illustrated in Figure 2. The magnetic surveys have been used to improve the mapping of basement structures and identify areas of shallow structures that are tectonically active. The remote-sensing images were used to identify the presence of structures that are exposed at the

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Detailed structural interpretation of HRAM data of the Forefoothills and the southern areas of the Deep Basin are shown in figure 3B and 3C (respectively). In both cases, the intersection of reactivated basement faults with the Thrust front and the Hingeline faults forms Tectonically Active Fault Zones as noted on both

maps. In the case of the Fore-foothills in NEBC the strike slip faults follow the lithological boundaries of the Hey-River Shear Zone. In the southern part of the Deep-Basin in Alberta the reactivated strike slip faults follow the lithological boundaries of the Snowbird-Suture-Zone.

tectonically active areas such as escarpments of exposed fault and deeply entrenched stream valleys. The area that is marked in red star shows the location of a 4.5 magnitude earthquake that was recorded in the area in 2018 and was attributed to be induced by drilling activities.

Figures 3D and 3E are focused on the expression of the inverted Hinge-line fault near the Ferrier (Banff) gas discovery. The first figure shows the expression of the inverted Hinge-line fault on seismic and super high resolution magnetic data that was flown in this area by a helicopter survey at 50-meter line spacing and 20 meters elevation clearance. The second figure shows the expression of the inverted Hinge-line fault on satellite imagery data.

Figure 3- Examples of non-seismic exploration tools used to constrain the interpretation of the Neo-tectonic (NET) map that is shown in figure 3A. Figures 3B and 3C shows the interpretation of HRAM data along the Hey-River-Shear Zone in the ForeFoothills of NEBC and the Snow-Bird-Suture-Zone in the Ricinus/ Ferrier area of the Deep Basin in Alberta. Figure 3D and 3E show the expression of the inverted Hinge-line fault in the Ferrier area on seismic, super-high resolution magnetic surveys and highresolution digital elevation (DEM) imagery data. Figure 3F shows DEM data of the FSJG near the Parkland (Wabamun) gas field. Key geomorphic features that reflect neo-tectonic activities are shown as well as the location of an intense earthquake that was recorded in this area in 2018. The HRAM images are courtesy of CGG, Chad data and IITECH.

Finally, figure 3E shows a regional overview of the FSJG using a high-resolution imagery data set that was produced by a digital elevation model that was collected by the US space shuttle and has spatial resolution of 30 meters. This image can be used to identify many geomorphic features that reflect the presence of

FIGURE

Integration of other data sets Several different maps and derivative products were used to further constrain the Neo-tectonic (NET) map that is shown in figure 4A. The structure map of the Fore-foothills area that is shown in figure 4B was made through the integration of HRAM data, well and production information. The major gas pools in this area are located along the inverted portion of the Hinge-line fault which is offset by the reactivated strike slip faults of the Hay-River Shear Zone. The structural setting of the Hinge-line fault in the central portion of the study area is illustrated in figures 4C and 4D. The northern part of the Hinge line fault is illustrated with an over-pressure map that was published by the BC Oil and Gas Commission in their Atlas of the Montney formation (2012), whereas the southern portion of the Hinge-line fault is imaged by a residual structure map of the Bluesky formation. This unique display shows the impact of the inverted portion of the Western Arm of the FSGJ on the position of the over-pressure zone as well as the location of strike slip faults that cut and offset the Hinge-line fault in the Dawson Creek area.

An isopach map of the Kiskatinaw formation is shown in figure 4E. The map illustrates the basic fault pattern of FSJG during the collapse of the Peace River Arch at early Mississippian time (Barclay et al 1990). The graben is divided into three segments that are marked by a significant change in orientation that often is refer to as “dog-leg” features (Harding 1984). The western “dog-leg” set up the position of the Monias inverted Halfway pools whereas the eastern “dog-leg” feature set up the position of the Wabamun Parkland gas field that is trapped at the intersection of two major normal faults. This type of structural setting is commonly referred to as a “trap-door” structure (Harding 1984). The structural setting of the inverted portion of the FSJG is illustrated with a unique display of the Bluesky structure contour map that is shown in figure 4F. The area that is shown in red contour lines reflect the portion of the graben that is presently elevated above the surface. It is interesting to note that this structure map also identifies the presence of several strikeslip faults that are located at the faulted boundaries of the South Eagle (Belloy) gas field. This area was reported to have significant increase in earthquake activities that was induced by

RESERVOIR ISSUE 4 • JUL/AUG 2022

the development of the field in the early nineties (Horner et al 1994). FIGURE 4 - Examples of different data sets that were used to constrain the interpretation of the Neo-tectonic (NET) map that is shown in figure 4A. The structural setting of the Fore-foothills area that was interpreted through the integration of HRAM data

with well and production information is shown in figure 4B. The traces of the Hinge-line fault are examined by combining pressure maps and Bluesky residual structure maps that are shown in figure 4C and 4D (respectively). The general structural setting of the FSJG area is shown in figure 4E. The structural setting of the inverted portion of the Western Arm of the FSJG is illustrated with a Bluesky structure contour map in figure 4F.

FIGURE

The Neo-Tectonic (NET) map of the Parkland gas field. The final example of this article is focused on detailed investigation of the area surrounding the Parkland gas field. The objective here is to illustrate with a variety of data sets that this area is slowly rising in response to isostatic rebounding processes leading to the exposure and reactivation of preexisting faults. Tectonically Active Fault Zones are likely to be found at the intersection of two sets of faults following the same pattern that was found in the Deep basin area. The structural setting of the Parkland field area which was previously established through the integration of all available data sets is shown in figure 5A (after Packard et al 2001).

Evidence of uplift, exposure of pre-existing faults, and the presence of structurally controlled stream valleys that are deeply entrenched can be seen on the DEM imagery that is shown in figure 5B (see also Berger et al 2010). The rate of uplift and erosion can be estimated in this area by using a super high-resolution magnetic survey and an outcrop study that was carried out by IITECH in 2002 (Davis et al 2002). The magnetic data shows the presence of a buried glacial channel that was cut, offset, and eroded by a deeply entrenched stream valley that follows the reactivated bounding fault of the Parkland trap-door structure (figure 5C). The outcrop field study shows that the glacial channel is now “hanging” 200 meters above the surface. This observation suggests that the Parkland trap-door structure has risen 200 meters since the last ice age

FIGURE

26 R E S E R V O I R I S S U E 4 • J U L / A U G 2 0 2 2

FIGURE

which occurred about 21,000 years ago. This observation is compatible with other observations made in the NEBC portion of the study area (Enlighten Geoscience 2019).

FIGURE 5 - Examples of data sets used to identify neo-tectonic activities in the Parkland area. Figure 5A shows the pattern of faults that were interpreted in this area by Packard et al 2001. Figure 5B shows a high-resolution Digital Elevation Model (DEM) imagery data highlighting the presence of exposed faults at the northern part of the field area. The red star shows the location of a major earthquake that was recorded in this area in 2018. Figure 5C shows a magnetic image of a glacial channel that is cut and offset by the deeply entranced Kaskatinaw river valley. The field photograph in Figure 5D shows the outline of a glacial valley that is “hanging” about 200 meters above the active stream of the Kiskatinaw River. Finally, figure 6, incorporates information that is derived from well data, 3D seismic, super high-resolution magnetic data, outcrop information and remote sensing data to produce a NET map of the Parkland area. FIGURE 6 - Integrated Neo-Tectonic (NET) map of the Parkland field area. The map was prepared through the integration of seismic and non-seismic data set.

Closing remarks

Acknowledgements

We hope that the result of this project stimulates enough interest in the geoscience community to continue to improve and expand the practice of generating NET maps over all the areas in the WCSB that are tectonically active. This task will require access to data that is not routinely used by different stakeholders and some additional training in the analysis of nonseismic exploration tools.

Finally, we would like to acknowledge the contribution of individual members of the IITECH technical team who made specific contributions to this mapping project. Jim Davis and Martin Mushayandebvu have work on the concept of mapping glacial channels with super-high resolution magnetic data. Xiang Wang and Denny Fortin worked on the structural setting of the HeyRiver Shear Zone. Michelle Boast and Martin Mushayandebvu participated in building the early versions of the tectonic map of the Deep-Basin area. Freedy Nzue Nzue have made significant contributions to the mapping of the Montney Formation in the Peace River Arch area. Jim Ellis from Ellis Geospatial processed all the remote-sensing data that was used for this project and generated the GIS files that made this integrated process possible. Thanks, are also due to Graham Davies for reviewing this article and allowing us to use his HTD maps.

It must be reiterated here that this study is focused only on demonstrating the “old fashion” way of establishing the basic structural framework of an area under investigation. This study doesn’t attempt to take this mapping project into the realm of risk assessment and mitigation practices which falls clearly beyond our areas of experience and expertise.

REFERENCES CITED IN THIS ARTICLE Barclay, J. E., Krause, F. F., Campbell, R. I., Utting, J. 1990. Dynamic casting and growth faulting: Dawson Creek Graben Complex, Carboniferous-Permian Peace River Embayment, Western Canada. In: Geology of the Peace River Arch. S.C. O’Connell and J, S. Bell (eds.). Bulletin of Canadian Petroleum Geology, v. 38a, p. 115-145. Berger, Z. 1994. Satellite hydrocarbon exploration: Interpretation and integration techniques. Springer-Verlag Berlin Heidelberg. New York. 319 p. Berger, Boast, and Mushayandebvu. 2008. The contribution of integrated HRAM studies to exploration and exploitation of unconventional plays in North America Part A. Canadian Society of Petroleum Geologists. The Reservoir, v. 35, issue 10. p. 42-47.

Davies, G. R. and Smith, L. B. 2006. Structurally controlled hydrothermal dolomite reservoir facies, an overview. In: Structurally controlled hydrothermal alteration of carbonate reservoirs. Bulletin of the American Association of Petroleum Geologists, v. 90, no. 11, p. 1641-1690. Dix, G. R., Barclay, J. E., and O’Connell, S. C. 1990. The origin, history, and regional structural development of the Peace River Arch, Western Canada. In: Canadian Society of Petroleum Geologists Special Volume 38A, p. 4-24. Enlighten 2019. Induced Seismicity Study in the Kiskatinaw Seismic Monitoring and Mitigation Area, British Columbia. Final report to the BC Oil and Gas Commission. Harding, T.P. 1984. Graben hydrocarbon occurrence and structural style. AAPG Bull 68: 333-362.

Berger, Boast, and Mushayandebvu. 2009. The contribution of integrated HRAM studies to exploration and exploitation of unconventional plays in North America Part B. Canadian Society of Petroleum Geologists. The Reservoir, v. 36, issue 2. p. 40-45.

Horner. R.B. Barclay, J.F, MacRAE, J.M. 1994. Earthquakes and Hydrocarbon production in the Fort St. John area of northeast British Columbia. Canadian Journal of Exploration Geophysics. Vol 30, p.39-50.

Berger, Boast, and Mushayandebvu. 2010. Structural Synthesis of Emerging Unconventional Oil and Gas Plays along the Fold Belt Region of the Western Canada Sedimentary Basin. Canadian Society of Petroleum Geologists. The Reservoir, v. 37, issue 5. p. 26-30

O’Connell, S. C., Dix, G. R., and Barclay, J. E. 1990. The origin, history, and regional structural development of the Peace River Arch western Canada. In: Geology of the Peace River Arch. S.C. O’Connell and J.S. Bell (eds.). Bulletin of Canadian Petroleum Geology, v.38a, p.4–24.

BC Oil and Gas Commission. 2012. Montney Formation. Play Atlas NEBC

Packard, J. J., Al-Aasm, I., Samson, I., Berger, Z., and Davies, J. 2001. A Devonian hydrothermal chert reservoir: the 225 bcf Parkland field, British Columbia, Canada. Bulletin of the American Association of Petroleum Geologists, v. 85, no. 1, p. 51-84.

Davis, J. Mushayandebvu, M. Smith, R. Magnetic detection and characterization of Tertiary and Quaternary buried channels. 2004. SEG expanded abstract.

RESERVOIR ISSUE 4 • JUL/AUG 2022

From the Desk of the AER Kelsey MacCormack and Alex MacNeil

An Overview of Current Projects at the Alberta Geological Survey The Alberta Geological Survey (AGS) is a branch of the Alberta Energy Regulator (AER) and plays a number of important roles related to supporting the development of Alberta’s energy resources. We support the Government of Alberta (e.g., Alberta Energy and Alberta Environment and Parks) on aspects of the province’s geology, hydrogeology, resources and surficial geology/geomorphology, and also play an important role in public safety. For example, we monitor the province for induced seismicity (see September-October 2021 Reservoir article for our work on induced seismicity) and support the monitoring of Turtle Mountain, which in 1903 was the site of a rockslide into the mining town of Frank, during which approximately eighty residents lost their lives. With a staff of 66 fulltime and limited term employees, most of whom are either geologists or hydrogeologists, we conduct a wide range of geological studies every year of varying levels of complexity and for different objectives depending on the needs of our stakeholders, which include industry, government, public, indigenous communities, and academia – essentially anyone within Alberta as well as those outside the province that are interested in learning more about Alberta’s geology and resources (Fig. 1). A common misconception about the AGS is that we are entirely based in Edmonton – although most staff are based in Edmonton about a dozen staff are located in Calgary at the downtown head-office of the AER. We remain collegial despite some recent upsets in hockey.

An AGS employee examines bar form deposits in a gravel pit along the Beaver River, June 2022.

For this next article on geoscience activities at the AER, we highlight a variety of projects currently underway; due to publication spaceconstraints not all projects are described but we feel the list provides a decent overview of our current activities.

sub-regional study will also take place focusing on the stratigraphy of the Spirit River Formation in the Peace River area to assess reservoir quality.

Reservoir Aquifer Characterization and Containment

Carbon Capture Utilization and Storage

In the Athabasca oil sands region of eastern Alberta, a large team of geologists are updating our stratigraphic framework for the McMurray and Clearwater formations with a focus on resource distribution, shallow gas pools, and hydrogeology. Given the number of wells, amount of core, and recent advances in our understanding of the depositional systems, this is a massive project and outputs are anticipated to be critical for updating some of the key maps that inform the annual publication on Alberta’s Energy Outlook, ST-98. Although most of this project is in the Athabasca region, a

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In 2021-2022 the AGS had a project studying carbon capture utilization and storage (CCUS) potential in the Devonian of central Alberta. Aspects of this project were described in the May-June 2022 column for the Reservoir, and we recently expanded the project’s objectives for the coming research year. Additional components include investigation of the Basal Cambrian Sand (preliminary results presented at the CSPG Core Conference in June), a Devonian outcrop analogue-study for understanding lateral and vertical facies distributions, and study of Leduc Formation injectivity properties from drillstem tests and similar

types of dynamic production data. CCUS and sequestration has been studied extensively in Alberta over the years and the current AGS project is leveraging those past studies while applying the latest concepts from numerous advances in other parts of North America. It is expected that deliverables from the project will be of significant interest to industry and the government while also aiding the regulator with assessment of the geoscience components of storage/sequestration applications made under Directive 65.

Evaluation of Maximum Operating Pressures

3D geological model of sandiness probability in the Wiau buried channel, as part of the 3D Aquifer Framework project.

In the geophysics and rock mechanics realm, much of our research over the past few years has been focused on detecting, characterizing, and better understanding the controls on induced seismicity in the province. While we continue to investigate the linkages between induced seismicity and activities such as produced water disposal and hydraulic fracturing, we will be dedicating time and research to review safe operating pressures for thermal operations and further our understanding of caprock integrity. This area of research combines sedimentology and stratigraphy with geomechanics, petrophysics, and subsurface engineering methods, and is one example of how geoscientists at the AGS work in multidisciplinary teams with engineers and geoscientists from other branches at the AER when required.

Evaluation of the Base of Groundwater Protection Surface Alberta’s Base of Groundwater Protection (BGWP) is an important regulatory instrument used in regulating drilling and completion activities, data collection requirements, production operations, and well abandonment decisions. The last formal study of the BGWP took place in 2007 and although it utilized a rigorous methodology, an update that incorporates new data collected over the past fifteen years is warranted. The BGWP is used to support regulatory processes such as understanding granted and denied waiver approvals, reviewing casing and cementing trends, and the implications of setting a maximum depth for the BGWP.

Earth Observations for Regulatory Solutions Earth Observation (EO) techniques for geoscience and regulatory applications is a fast-evolving space broadly speaking and, more specifically, at the AER. We use a range of EO data types and geospatial analysis for monitoring regional-scale oil and gas activities in order to supplement and guide compliance assurance, support site investigations, large-area planning, and public and environmental safety. This current year our focus is on improving access to and use of EO data for AER staff, creating a variety of applications that will enable staff uptake of otherwise advanced methods. This includes use of satellite imagery across the province, and high-resolution (metre-scale) imagery and hyperspectral data in select areas. Our products in this area also increases public accessibility of EO data and methods.

Geological Framework of Alberta The long-term goal of the Geological Framework of Alberta (GFA) is to be leveraged as the single-source of credible regional geological information to government, regulators, industry, and public, and allow the integration of both surface and subsurface resource data within a consistent and reliable 3D geological context. The GFA will support risk-based strategic and operational decisions based on sound science and credible evidence, and will facilitate the communication and improve accessibility of transparent geoscience information to stakeholders. Having a single-source repository for geological information will reduce duplication of work and increase consistency of surface/subsurface geological, mineral, groundwater, and energy resource evaluations and decisions. For 2022-2023 the GFA project will focus on enhancing modelling workflows, incorporating additional geological features, and refining the 91 geological units within the current 3D model based on stakeholder priorities and needs. We also have several additional projects we are working on in collaboration with external agencies. These include a project with the University of Calgary known as the 3D Aquifer Framework study (Fig. 2), and Oil Sands Groundwater Monitoring in collaboration with the provincial and federal government. The latter is monitoring water levels in Cretaceous strata and integrating Neogene and Quaternary data in order to quantify baseline, pre-development water-level conditions in the North Athabasca Oil Sands, South Athabasca Oil Sands, and Cold Lake Oil Sands regions. This is a three-year project. The Aquifer Framework Study is also a three-year project, focused on the occurrence of key contaminants in shallow groundwater throughout Alberta. The AGS’s contribution is focused on the 3D aquifer framework, which is based on integrating the geology, hydrogeology, and geochemistry to develop a conceptual and quantitative understanding of the shallow groundwater system, including delineation of near-surface aquifers. The AGS is also supporting AER projects such as Commingled Abandonment and a multivariate analysis of geological and operational factors that may be key to predicting induced seismicity in association with industrial activity. As described in the Reservoir from November/December 2021, the AGS also supports Geothermal resource projects, and in future articles we hope to describe our support in the emerging resources related to Alberta’s mineral potential, including brine-hosted minerals.

RESERVOIR ISSUE 4 • JUL/AUG 2022

The Blue View: Industry Trends Through Woodmac’s Lens NORTH AMERICA IN CONTEXT: OVERARCHING THEMES ACROSS THE INDUSTRY INFLATION IS NOT THE 1. COST SAME FOR ALL PLACES AND OPERATORS, WHO ARE THE WINNERS AND LOSERS?

CANADA 2. OFFSHORE REVIVAL – NEW BIDS

AND NEW LIFE FOR TWO PROJECTS

FROM THE 3. INCREASED START OF 2022, BUT HAS IT THE US RIG COUNT HAS INCREASED ENOUGH?

CANADA: n Canada cost inflation - the effect and response

Like other regions, Canadian operators are seeing inflation across a wide range of items and services including labour, frack sand, rig rates, fuel, chemicals, and steel. Company reported inflation varies from single digits to over 25%, but we see a general trend of 10-15% from 2021 levels with chemicals and steel often quoted as the most severe. This is slightly lower than inflation seen in the L48 which sits at 20 to 25%. Companies across the board acknowledged the rising cost environment in Q1 results with several themes recurrent in operators’ response to rising cost pressures. Those with advantageous procurement contracts in place were quick to point to them, while others highlighted improving efficiencies as an offset. Several operators increased capital guidance for the year, baking in anywhere from 2 to 20% for inflationary pressures, while many other sat in a ‘wait and see’ camp, weighing up options as the year unfolds. There was a clear trend that size matters with large operators are experiencing less inflation in prices. Oil sands also shows protection from price pressures due to forward planning of sustaining and maintenance spend. n Cenovus and Suncor re sanction the West White

Rose project

Cenovus and partners are moving forward with the gravity based structure at West White Rose offshore Newfoundland & Labrador. Construction was suspended in March 2020 at 65% complete. Owner interests will reshuffle as was reported back in June 2021. Suncor will increase its stake in the producing White Rose asset from 27.5% to 40.0% and in the West White Rose expansion project from 26.125% to 38.675%, with Cenovus lowering its stakes in White Rose for a higher Terra Nova stake and a payment to Suncor of Cdn$50 million. The Oil and Gas Corporation (formerly Nalcor) owns a 5% stake in West White Rose. Incorporating the latest cost figures, the full cycle economics of the expansion are negative. But we long expected the project to proceed given compelling point forward economics, government support and strong global prices. We calculated Cdn$3.3 billion had been spent on the project between 2013-2021. This sanction

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decision delays decommissioning costs (over Cdn$1.6 billion) into the next decade and adds 180-200 million barrels of oil recovery. At our base prices (US$60/bbl Brent long term), the West White Rose incremental phase adds Cdn$1.0 billion in remaining PV10. This would be even higher once factoring in the delayed abandonment benefit at White Rose. Total PV10 for the phase including previous spend has a negative PV10 of Cdn$3.1 billion. Given the construction delay and high upfront costs, post-tax project IRR is 3%. The 2022 point forward IRR is a more respectable 16.5%. With Terra Nova Extension work ongoing and Bay du Nord potentially heading towards FID, albeit under new ownership following BP and Cenovus striking a deal, the regional outlook is positive again. We are closely watching the three expected exploration and appraisal wells this summer, with the first one, Equinor and BP’s Cambriol J-31, spud on 16 May. n Newfoundland & Labrador 2022 call for bids: last

call, or just another bite at the cherry?

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has put a total of 38 blocks up for lease, with bids due by 2 November 2022. Of the total, 28 are in the Eastern Newfoundland region, in the Orphan basin and Flemish Pass. A further 10 lie in the South Eastern Newfoundland area, an unexplored area south of the Jeanne d’Arc sub-basin. Areas were nominated by the industry in 2021, and C-NLOPB then designed the parcels for bid based on these nominations. Our take: Large parts of the Eastern Newfoundland region were previously licensed or at least offered, with some key areas relinquished in just the last few months. The large number of tracts on offer might signal industry enthusiasm off the back of the Bay du Nord project receiving approval. That positive sentiment might be amplified if planned E&A wells to the west and southwest of Bay du Nord are successful. But, any enthusiasm must be tempered by political risk doubts centred on the federal government. Following a long delay, it approved the project’s environmental plan, which included stringent mitigation measures, one of which is the requirement to reach

net zero emissions by 2050. But now activist groups are challenging the approval in federal court, raising further uncertainty. If this project received this much scrutiny, one can only imagine what future proposals might face. Last fall, the federal government committed to cap oil and gas emissions at a pace and scale needed to achieve net zero by 2050. Details of that policy are in development and not expected to be released until 2023, after this bid round. Key blocks: Of particular note are blocks around Bay du Nord, previously leased during the 2015 Call for Bids and relinquished in January 2022. These include areas of the current EL 1156 block that have been partially relinquished and now form the southern part of Parcel 26. The Fitzroya well was drilled in this area by Equinor in 2015-2016 under a previous lease to EL 1156 and was a dry hole.

EASTERN NEWFOUNDLAND REGION PARCELS AVAILABLE FOR BID

Parcel 25 was previously leased by Chevron in the 2015 call for bids. In addition Equinor held, and relinquished, four large blocks north of Bay du Nord, totalling 1,309.25 km2. Parcel 28 was held by CNOOC (formerly Nexen) and was the location of the failed Pelles wildcat in 2021. Acreage in the Orphan basin to the north is unlikely to draw much attention until industry sees the results of BP’s Ephesus well on EL 1145, expected to be spud in 2023. Acreage is regularly recycled under the current format of land issuance by Newfoundland and Labrador. But delays plagued the current call for bids, and the federal government’s evolving policies may threaten this system of nominations and bidding, restricting future access for explorers.

LOWER 48: n Continental Resources founder offers to

take the company private

Continental Resources is a top 10 independent producer in the Lower 48, the largest player in the Bakken with other holdings in SCOOP-STACK and Powder River Basin. The company’s founder and chairman Harold Hamm and his family offered to take the company private last week to buy 17% of outstanding shares. At a US$70/share offer, the proposed equity value is US$25.4 billion. This offer is a sign of increasing sentiments that private companies are not limited by public markets, with negative views towards petroleum producers from activist investors and political pressure alike, and seen in the Dallas Fed’s latest surveys. Going private would allow freedom from pressures to grow production with soaring commodity prices and enhanced emissions reporting requirements for public trading companies. While many management teams across the Lower 48 would appreciate this flexibility, do not expect the “going private” trend to catch on too strongly. Continental sits in a rare space where the Hamm family has a strong amount of preexisting share ownership, and the company can self-finance this deal armed with a vast drilling inventory. Large Caps do not have the freedom to go the private route easily due to institutionalized and diversified investors. Some Small/Mid Cap companies have ownership structures that make this theoretically feasible, but do not have the drilling inventory to sustain the move. The last hurdle is access to private capital. The Continental deal is not contingent on any outside financing, a rare sight in this transaction space. Source: CNLOPB

RESERVOIR ISSUE 4 • JUL/AUG 2022

RELATIONSHIP BETWEEN WTI AND ANNUAL SUPPLY GROWTH

n When will Lower 48 supply

respond to higher prices?

The US rig count has increased by roughly 140 units since the beginning of the year. This may not be a minor uptick in activity, but many were anticipating a faster ramp-up with commodity prices at multi-year highs. The industry remains less responsive to high prices than previous cycles. Why? Supply chain constraints and operators staying the course with capex budgets keep a cap on short-term Lower 48 growth. But the tempered response to higher prices can’t and won’t last forever.

We assume record free cash flows and improved balance sheets will change this scenario in 2023. Operators are expected to modestly increase their capex budgets and production, despite lower forecasted oil prices than 2022. OFS capacity should eventually expand and producers have to reconsider using cash beyond share repurchasing. Overall Lower 48 oil growth rates should comfortably exceed 500 kb/d in both 2023 and 2024. Keep in mind this needs to be balanced with years of intensive core acreage development and inventory depletion.

SCOTT NORLIN, GIT

BRANDON MYERS

Research Analyst, Upstream Canada

Senior Analyst – Lower 48 Upstream

Scott joined the Canadian Upstream Research team at Wood Mackenzie in June 2019. He is responsible for providing financial asset valuation and objective commercial analysis on company and play activity across Canada. His coverage ranges from North American large caps to junior private producers. He also covers CNRL and Cenovus for the corporate analysis team, providing high level company valuation and strategy analysis. Prior to joining Wood Mackenzie, Scott gained comprehensive experience in exploration and development of upstream assets. Scott worked at Parex Resources on conventional assets, Devon Energy on the Jackfish oil sands project and also has field experience in unconventional plays. Scott holds a Bachelor of Geology degree with honours from the University of Calgary and is a registered Geologist in training with the Association of Professional Engineers and Geoscientists of Alberta.

Brandon is a senior analyst with our Lower 48 research team. Having joined Wood Mackenzie in 2017, he has worked on the integration of subsurface data with L48 research and conducted research into every major unconventional play in the US and Canada. Prior to this, Brandon’s career included roles in both energy efficiency and the oil and gas industry. He was a founding partner of Firefli LEDs, a carbon reduction focused LED lighting company that focused on solutions for high rise towers and industrial facilities. After that he spent time as an energy analyst for Nemalux, a Canadian, heavy industry LED manufacturer that specializes in carbon and power reduction solutions for wellsite facilities. He was a conventional field geoscientist for an innovative junior oilfield optimization exploration company in Calgary through 2016 and early 2017. Brandon graduated from the University of Alberta with a BSc, Specialization in Geology. Academically his focus was on the organic geochemistry of the Duvernay shale and his thesis was focused on hydrocarbon generation and expulsion modelling across Encana’s Kaybob acreage.

DISCLAIMER – THE VIEWS AND OPINIONS STATED BELOW ARE BASED ON WOOD MACKENZIE’S DATA, SOURCED FROM PUBLIC SOURCES ACROSS THE GLOBE AND OUR PROPRIETARY TOOLS SUCH AS LENS.

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