Companies like Talisman Energy Inc., Questerre Energy Corp. turn to Utica shale formation in Quebec

Gas entrepreneurs increasingly turn to Quebec and the Maritimes for untapped production

By Gordon Jaremko

February 05, 2010

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 counterparts.

The new appraisal identifies 20 “plays” or geological formations liable to be worth drilling into. The GSC still only has enough data to guess at the potential of six targets. But the limited evidence already points to 41 trillion cubic feet of gas and 2.5 billion barrels 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 paints technical portraits of Eastern Canada, its scientists are keeping tabs on a growing lineup of industrial explorers.

Although results are often kept secret to avoid tipping off potential rivals, enough is known to suggest that private sector geologists are starting to agree with the GSC view of the eastern region. The survey identifies widely dispersed eastern exploration campaigns involving 14 companies. Along with Junex and Forest Oil, the pioneers include Talisman Energy Inc., Questerre Energy Corp., Gastem Inc., Canbriam Energy Inc., Triangle Petroleum Corp., Elmworth Energy Corp., Contact Exploration Inc., Corridor Resources Inc., PetroWorth Resources Inc., Deer Lake Oil and Gas Inc., East Coast Energy Inc. and Stealth Ventures Ltd.

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 official resource projections. But the federal government agency observes that preliminary industry estimates for just one potential shale gas source already exceed 40 trillion cubic feet. 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 for natural generation of significant gas deposits.

The unconventional gas potential of the Appalachian region of eastern North America should come as no surprise, the GSC suggests. Current U.S. drilling, as well as the pioneer Canadian work, is 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, N.Y., making this the oldest hydrocarbon play in North America,” the GSC scholars point out.

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