Petroleum Exploration And Development Opportunities In Manitoba

Abstract

Abstract The productive areas of Manitoba are located along the northeastern flank of the Williston basin. Rocks oj Paleozoic, Mesozoic and Cenozoic age form a businward thickening wedge of sedimentary strata that reach a total thickness of 2300 m in the southwest corner of the province. Ta date oil production In Manitoba is restricted to the sandstones of the Jurassic Amaranth Formation, the carbonates of the Mississippian Lodgepole and Mission Canyon formations and the sandstones of the Missisippian Bakken Formation. The deeper formations of the Devonian and Ordovician age - the Birdbear, Duperow, Dawson Bay, Winnipegosis, Red River and Winnipeg formations offer oil and gas potential but remain largely undrilled. Potential reservoir sands also exist above the Jurassic Amaranth Formation. This paper presents a brief description of the geology and reservoir characteristics of producing horizons in Manitoba. It describes Manitoba's Crown land tenure system of leases and exploration reservations. Also presented is an overview of Manitoba's petroleum royalty and tax structure and incentive programs. This paper outlines exploration and development opportunities in Manitoba. When examining any petroleum exploration and development opportunities, it is essential that consideration be given to the various factors that influence the attractiveness of such opportunities. The factors that create a favourable investment climate in Manitoba and some economic examples will be discussed. Introduction The first commercial oil well In the Williston Basin was drilled in the Daly field in 1951. Two years later, the Virden field, which accounts for approximately 40% of the province's annual oil production and over 70% of the province's cumulative oil production was discovered. In the 1980s, renewed interest in Manitoba resulted in the discovery of oil in the Amaranth Formation in the Waskada and Pierson fields in 1980 and 1981, and in the Bakken Formation in the Daly field in 1985. Both plays continue to be actively developed. During 1990, 79 wells, 63 development and 16 exploratory, were drilled in Manitoba. Over the past five years, an average of 89 wells have been drilled annually. In 1990, the average well depth was 959 m. As of December 31, 1990. there were 1583 wells in 117 designated oil pools, capable of production in Manitoba total oil production in 1990 was 737.8 × 103m3 or 2021 m3/d, an increase of 2% over 1989. Cumulative oil production to year end 1990 was 27.9 × 103m3. In 1990, crude oil prices in Manitoba fluctuated between SIOO/m3 and $275/m3 and averaged $155.85/m3. In 1990, additions to established oil reserves totaled 865.6 × 103m3 more than replacing annual production for the first time Since 1985. At the end of 1990, total remaining established oil reserves climbed to 7.4 × 103m3. There is no non-associated gas, production in Manitoba. The only gas plant in Manitoba is located in the Waskada field, During 1990, the plant processed an average of 41.4 × 103m3/d solution gas. A total of 8.7 × 103m3 of propane, bulane and condensate wsa, recovered from the solution gas. The dry gas was reinjected.