The Canadian Oil Driller
Winter 2004
By: Cheryl Parisien
Vulcan Minerals Poised for Success with Flat Bay Petroleum Project
Exploration for new, significant deposits of petroleum and minerals is the driving force of Vulcan Minerals Inc., a publicly traded company on the TSX venture exchange.
Patrick Laracy, president and founder of Vulcan Minerals, is a pioneer at heart. “Definitely,” he laughs, “I’ve got the arrows in the back to prove it.”
The St. John’s-based company’s latest discovery is the on-shore Flat Bay Petroleum Project in western Newfoundland in the Bay St. George Basin. The area spans 236,000 acres of Carboniferous rock, and Vulcan’s initial drill tests have shown that an active petroleum system exists there. Further drill testing is required to assess other potential petroleum targets Vulcan has identified.
The discovery of petroleum in Carboniferous rock in western Newfoundland and Labrador is significant because it is a first in the province’s history, and proves that Carboniferous rock is a legitimate exploration target.
In 1999, Vulcan discovered a new oil system with their Flat Bay #1 well. That well penetrated a petroleum-bearing formation less than 286 metres deep. A well inspection indicated that it is capable of flowing oil at the surface, and a program to stimulate and test the well is being designed. Currently, there is no production in the Bay St. George Basin, and Vulcan is pioneering the exploration and development effort. Vulcan is now working on securing $2 million for financing the tests.
The test results will provide invaluable engineering information on the reservoir’s response to stimulation, which will assist in planning for deeper wells into the reservoir. The results will also determine if the wells can produce commercially. Hopes are high, and so far the indications are positive.
“The fact that we penetrated over 100 metres of oil-bearing formation is quite significant, and we’re quite excited about it,” says Laracy.
If the shallow discovery can produce commercially, then Vulcan can seismically trace the particular reservoir interval down to deeper depths. “We’re hoping to work into deeper depths and find higher pressure and flow rates,” says Laracy.
Because testing has not started, it would be premature to estimate a barrel-per-day flow rate at this time. “We really don’t know what it’s going to do,” Laracy continued. “There’s oil at the surface now, but it’s shut in, suspended. With stimulation it could be 50, 70, or even 100 barrels per day; we don’t know yet.”
In early 2004, Vulcan will drill test the Flat Bay #2 well site, encouraged by the considerable thickness of the oil-bearing formation of Flat Bay #1. The Flat Bay site covers approximately 20 square kilometres with three potential reservoir targets. Flat Bay #2 will be 1.5 kilometres from the #1 site. The projected well depth is 800 metres. A third site would follow.
The discovery is a notable one, says Laracy. “We’ve located an oil zone here, and we feel that the oil pool is significant. In addition to that, we’ve located approximately six targets, based on seismic data, that look quite inviting.”
These targets vary in size from 10 square kilometres to 100 square kilometres, ranging in depth from 1000-3000 metres deep. The logical course of action is to start off with the simple jobs first; that means beginning with the shallow drills.
“Our objective is to establish commercial production with the shallow field, demonstrate that the basin is going to be productive on a commercial basis, then to drill the remaining targets. So we will gradually move down depth-wise as we establish that the basin is productive,” says Laracy.
The Flat Bay site does not pose any unusual operational challenges. It is off a paved road, connected to the Trans-Canada Highway, and seven kilometres away from a deep-water port. Accommodation for production facilities and further explorations are considered to be excellent.
History of an explorer
Laracy, a geologist and a lawyer, co-founded Vulcan Minerals in 1996. The company’s formation was inspired by oil seeping from the ground near Parsons Pond in western Newfoundland.
“Our original focus was on locating minerals--then we got involved in the oil play in western Newfoundland, and have been carrying out exploration work ever since. We want to make this company through the drill bit and through the discovery of oil in new areas. Bay St. George is a new area and we feel we’re going to walk into a company-maker, high-impact oil deposit,” says Laracy.
Vulcan is unique in that it is pioneering exploration efforts of a new petroleum basin. There are very few companies in the world today involved in such a venture. Most explorers now are large companies that prefer to explore in mature producing basins, or in offshore areas for multi-hundred, million-barrel targets.
“It’s an area that’s always intrigued me,” he says. “This is an area that has a very bright future, given the positive results we’ve had thus far.”
But being a pioneer does pose some challenges: one being the lack of infrastructure. Mounting a drilling program in Bay St. George is not like operating in a place like Red Deer AB, because none of the infrastructure is in place. “It takes a lot more planning and coordination of equipment just to get the job done,” says Laracy. “We’re drilling unknown stratigraphy to a certain extent, so it’s exciting and challenging.”
Newfoundland is becoming a major petroleum-producing province. Its northern Atlantic location makes it ideal for major American and European markets.
The Western Newfoundland Basin has the potential for world-class discoveries both on-shore and offshore. It has seen modern exploration since 1995. Vulcan has focused on the area because it is an extension of proven petroleum systems along eastern North America from Texas to the Appalachian region.
Vulcan’s discovery in the Bay St. George Basin is important to the entire Atlantic region. It may not be another Hibernia, but it will foster new growth in the industry.
“We’re going to put western Newfoundland on the petroleum-producing map,” smiles Laracy.
This article appeared in the Winter 2004 edition of the Canadian OilDriller Magazine, an official publication of the Canadian Association of Oilwell Drilling Contractors (CAODC) . |
