A junior oil and gas explorer based in Quebec has received a permit from the provincial government to drill its first horizontal well from an existing vertical wellbore in the eastern part of the province.

Junex Inc., based in Quebec City, said Wednesday it has been given a permit to drill the Galt No. 4 horizontal well on its Galt Oil property, located in a sparsely populated area about 20 kilometers (12.4 miles) from the town of Gaspe.

The company said it would drill a horizontal well at the existing Galt No. 4 vertical wellbore, first drilled in 2012 to target the Forillon Formation. The drilling rig, Foragaz No. 3, would drill the new horizontal toward an existing vertical well targeting the Forillon, Galt No. 3.

Junex said the Galt No. 4 vertical well encountered a fractured, oil-saturated carbonate sequence in the Forillon measuring about 241 meters (790.7 feet) in thickness. The trajectory of the horizontal well is projected to intersect with several open, near-vertical natural fractures in the Forillon.

”Having invested a great deal of effort on this project since our company was founded, we are now proceeding to the next phase of horizontal drilling with the goal of further confirming the project’s potential and the hope of ultimately commencing commercial oil production,” said CEO Peter Dorrins. “We view our Galt Oil property as being the most advanced oil project in Quebec in terms of geological and engineering knowledge, delineation of the structure, number of wells drilled and resource potential.”

Junex is in the process of contracting for other specialized services and equipment for drilling the well and expects to begin drilling operations by early autumn.

The company has submitted a request to drill a second horizontal well, Galt No. 5. It plans to acquire seismic data and analyze results from the two horizontals before determining the location and submitting requests to drill two more horizontal wells, Galt Nos. 6 and 7.

Junex holds a 69.6% interest in the Galt Oil property and a 100% interest in adjacent acreage. The company holds exploration licenses for about 1.65 million acres in Gaspesie, also known as the Gaspe Peninsula, which runs along the south shore of the Saint Lawrence River and extends into the Gulf of Saint Lawrence.

According to Junex, independent reservoir engineer Netherland, Sewell & Associates Inc., a Texas-based consulting firm, has estimated the Forillon and Indian Point formations that underlie the Galt Oil property contain an estimated 330 million bbl of oil. That figure, reported as the best estimate of the total oil initially in place (OIIP), includes 36 million bbl classified as discovered contingent OIIP volumes and 294 million bbl of undiscovered prospective OIIP volumes.

Junex holds exploration rights to about 5.2 million acres in Quebec, including 1.44 million acres in the sedimentary basin of the St. Lawrence Lowlands; 1.67 million acres in the Lowlands’ portion of the Utica Shale; 1.78 million acres in the province’s portion of the Appalachian Basin, and about 233,000 acres on Anticosti Island.

Junex also forged a partnership (25% working interest) in early 2012 with undisclosed partners for about 2,219 gross acres in Schleicher County, TX, in the Permian Basin. The acreage is operated by Telesis Operating Co.

Quebec has moved slowly on shale development and hydraulic fracturing (fracking) as the provincial government’s position on the issue changes with each new regime.

In 2011, when the Liberal party was in power and Jean Charest served as premier, the Quebec government launched a two-year study of shale gas development and allowed fracking only for exploration purposes (see Shale Daily, March 10, 2011). But the Parti Quebecois (PQ) campaigned on a promise to shut down shale development and came to power in 2012. A moratorium was enacted in early 2013 (see Shale Daily, Feb. 8, 2013).

Despite the moratorium, PQ leaders announced last February the creation of two joint ventures between the government and four oil and gas producers to drill wells on and offshore Anticosti Island, located at the outlet of the Saint Lawrence River in the Gulf of Saint Lawrence across from Gaspesie (see Shale Daily, Feb. 21).

The Liberals returned to power after elections in April, this time with Phillippe Couillard as premier. Since then speculation has grown that the province may allow fracking in other parts of the province, although Couillard has been on record as saying he opposes the practice in environmentally sensitive areas (see Shale Daily, April 8).