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Survey: Gas Bounty Lies in Eastern Canada

Natural gas producers in Canada have no shortage of fresh, large drilling targets as exploration campaigns quietly spread out on a new eastern industry frontier, says a new report by the Geological Survey of Canada (GSC).

The resource assessment is a bulky, densely technical document by seven specialists that has nevertheless become an instant GSC bestseller. The report points to high potential across 250,000 square kilometers (100,000 square miles) of sedimentary rock beneath swaths of Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, the Gulf of St. Lawrence and Cabot Strait.

Known among geologists as the St. Lawrence Platform and Appalachians of Eastern Canada, and also as the Eastern Canada Paleozoic Basins, the region is still almost virgin territory for hydrocarbon exploration. But encouraging signs have been uncovered since the last resource assessment in the mid-1980s by a handful of wells plus numerous technical studies by the GSC and provincial government partners, the GSC says.

The new appraisal identifies 20 geological formations liable to be worth drilling. The GSC still only has enough data even to guess at the potential of six targets. But the limited evidence already points to 41 Tcf of gas and 2.5 billion bbl of oil -- at the very least, the report says.

"The assessment results indicate Carboniferous basins have a large gas resource potential, much higher than previously estimated. The resource potential numbers represent a minimum for the region because many of the conventional and all of the unconventional plays were only qualitatively assessed," the GSC says. In addition, "the conventional resource potential for Cambrian-Devonian strata may be much higher than reported here."

There is a long tradition of mutual dependence between resource industries and the GSC, which is Canada's oldest federal government agency, founded as a guide to the country's potential when most of the country was still an unknown frontier. At the same time as the GSC assessment provides three-dimensional, technical portraits of eastern Canada, the survey's scientists are keeping close tabs on a growing lineup of industrial explorers.

Although results are often kept secret to avoid tipping off rivals, enough is known to suggest that private-sector geologists are starting to agree with the GSC view of the eastern region (see NGI, Oct. 8, 2007). The survey identifies widely dispersed eastern exploration campaigns involving 14 companies: Junex, Forest Oil, Talisman, Questerre, Gastem, Canbriam Resources, Triangle Petroleum, Elmworth Energy, Contact Exploration, Corridor Resources, Petroworth, Deer Lake Oil and Gas, East Coast Energy and Stealth Ventures.

Much of the effort centers on unconventional coalbed methane and shale gas targets. Too little is known or disclosed about those for the GSC to provide its own resource estimates, although the agency observes that preliminary industry estimates for just one potential shale gas source already exceed 40 Tcf.

Purely geological data points to eastern Canadian shale formations up to 1,800 meters (5,880 feet) thick, with organic material content well up on the scale required significant amounts of gas.

The unconventional gas potential of the Appalachian region should come as no surprise, the GSC suggests. Current drilling in the eastern United States parts of the region, as well as pioneer efforts in Canada, are repeating history so old that it has been largely forgotten.

"Shale gas actually has a long but poorly known history. The first known shale gas production occurred in 1821 when local townsfolk drilled a well 8.3 meters (27 feet) deep at Fredonia, NY, making this the oldest hydrocarbon play in North America," the GSC scholars point out.

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