Corridor to Complete Several McCully Gas Wells This Summer
Corridor Resources provided an update today on its exploration, development and production operations.
One additional McCully natural gas well has been drilled and cased in preparation for fracturing operations scheduled for early this summer. The McCully L-38 well was drilled to a total measured depth of 3133 meters, encountering a total of 55 net meters of indicated natural gas bearing sands with varying amounts of bitumen in some of the gas bearing intervals. The indicated net pay intervals were encountered in the "D", "E", "F" and "G" sands, including 6 meters of net gas bearing sand with the highest measured pressure gradient for any sand encountered to date in the McCully Field. Completion of this well will be undertaken this summer as part of a planned multi-well fracturing, completion and tie-in program. The Nabors #86 drilling rig has been removed from the well pad and placed off contract. Corridor's plans are to suspend drilling operations at McCully for the remainder of 2009 to maintain a strong cash-positive balance sheet. This drilling hiatus will provide Corridor with an opportunity to generate a detailed simulation model of the entire McCully Field which will be utilized to optimize future drilling locations and reservoir performance.
McCully Well Completions
Plans are currently being finalized regarding completion of several McCully gas wells this summer, including the P-47, L-38 and C-29 wells and the I-47 horizontal well drilled last year. Several significant changes are planned to be introduced in this upcoming well completion program. Corridor is re-designing its approach to fracturing new wells in the McCully Field this summer by frac'ing with propane and eliminating water and methanol in the frac fluids. The capacity to frac with propane has been designed and developed by GasFrac Energy Services, a Calgary based company and a relatively new player in the well services industry. Corridor expects that propane, which is a component of natural gas, is an ideally suited fluid for fracturing McCully reservoirs, as it is expected to minimize formation damage and to be more readily recoverable on flow-back than water and methanol.
In Corridor's completion programs during the past two years, methanol and water have been the significant components of the frac fluids employed. High concentrations of methanol have served to reduce the surface tension effects of the frac fluids and to prevent hydrates from forming during testing and production operations. However, new evidence indicates that chemical interactions between methanol and certain components of the formation appear to have caused down-hole scaling and deposition of minerals, including gypsum, within the well-bore. These deposits appear to be impairing production performance of at least some of these wells, accentuated by the unusually low temperatures and high pressures of the McCully reservoirs. Recent observations of scale deposits on instruments retrieved from the bottom of some wells indicate that these deposits may be reducing the flow capacity of these wells and causing greater declines in production rates than were expected. Corridor and its consultants are currently designing a work-over program to be conducted this summer that is aimed at removing these down-hole scale deposits. In addition, a work-over will be carried out this summer which is intended to prevent the influx of formation water into the gas production stream in the N-66 horizontal well.
South Branch G-36 Test Results
In other activities, Corridor has discontinued the pump testing of the South Branch G-36 oil well and has shut the well in for a pressure build-up. The well produced 45 degrees API oil on pump at a maximum rate of 45 barrels per day before declining to a final rate of approximately 5 barrels per day. These results are being analyzed to determine the reasons for the decline in production and to determine the next steps in evaluating the commercial potential of the Caledonia Field. Factors that may have contributed to these results are the apparent partial failure of the water/methanol frac in the G-36 well, the presence of oil/water emulsions in the recovered fluids and possibly poorer than expected reservoir quality. Under consideration as next steps in evaluating this discovery are a potential re-frac of the test interval in the G-36 well using propane as the frac fluid and/or the drilling and fracturing of a horizontal well at a location adjacent to the discovery well. The 3-D seismic acquired by Corridor last fall shows extensive potential for numerous additional wells to follow up on this light oil discovery.
Elgin Shale Gas Prospect
Corridor continues to have preliminary discussions with potential farm-in partners that could, if successfully concluded with one, help to accelerate evaluation and potential production of natural gas from the Frederick Brook shale formation, initially in the Elgin area. Corridor's 2009 budget includes funds to undertake some completion and testing operations this summer at the Green Road G-41 vertical shale gas well. Alternatively, Corridor may opt to defer such operations to next year and include them as part of future activities planned for the Elgin area. Corridor has engaged an engineering firm to undertake an independent assessment of the quantity of the resource within the Frederick Brook shale in the Sussex/Elgin sub-basins, in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. It is expected that the results of this assessment will assist Corridor in developing a longer term plan for the appraisal and potential development of this vast resource.
Gulf of St. Lawrence
The Quebec government announced in its April budget that it is undertaking a strategic environmental assessment program in the Gulf of St. Lawrence to prepare the path for offshore oil and natural gas exploration and development. The time table set out by the government indicates this assessment will be completed over the next two and one-half years. Consequently, the earliest time that a permit could be issued by the Canadian and Quebec governments to drill an offshore exploration well in the Quebec sector of the Gulf would be 2012. Accordingly, Corridor is deferring to 2010 its application for approval to conduct a geo-hazard site survey for a proposed offshore exploration well at the Old Harry prospect.
- No Takers Yet for Corridor Shale Gas Prospect (Dec 21)
- Corridor Advances Frederick Brook Shale Program with Vertical Well Spud (Sep 28)
- Corridor Commences Drilling Frederick Brook Shale Well (Sep 27)