Regina 鈥� Manitoba has been growing its oil production for several years now, but that鈥檚 expected to change this year, with the dramatic drop in oil prices.聽
Keith Lowdon, director of the Manitoba Petroleum Branch with the Manitoba Mineral Resources ministry, spoke to Pipeline News on April 28 during the Williston Basin Petroleum Conference about how things are going in that province.聽
鈥淔or the beginning of the year, it鈥檚 been pretty good, for 2015, from January to the end of March. We鈥檙e down about 15 per cent from the year before in drilling. It鈥檚 not as bad as I thought it would be, considering the price and everything that鈥檚 going on,鈥� he said.
For production, he said, 鈥淲e鈥檙e down. We鈥檙e probably about 47,000 barrels per day.
鈥淲e were up to 52,000 barrels per day for a little bit, but the annual production was about 50,000.鈥�
In 2014 Manitoba drilled 464 wells with up to 21 rigs working, but the province鈥檚 outlook for 2015 is much lower. The Petroleum Branch anticipates 280 wells. To April 29, drilling was down 25 per cent over last year. 聽
Expenditures are also expected to be down to $700 million.聽
One of the most significant events of the last year was Tundra Oil and Gas buying out EOG Resource鈥檚 Waskada property. The two biggest players in the Waskada play have been EOG and Penn West Exploration, but Penn West has had corporate trouble of its own for a while now.
Tundra took possession of the EOG鈥檚 assets on Jan. 1, 2015.聽
鈥淲e don鈥檛 know what their plans are. EOG will have some drilling commitments, I鈥檓 sure, but we don鈥檛 know what Tundra鈥檚 plans are. EOG and Penn West had basically quit drilling by the end of last year. The last quarter, they didn鈥檛 do much drilling anyway,鈥� said Lowdon.
Similar to what happened in the early 1980s, Waskada went boom, and now it has largely gone bust, until activity picks up. Penn West鈥檚 property is up for sale at Waskada, and EOG鈥檚 sold. Tundra鈥檚 wholly-owned subsidiary, Red Beds Resources Limited, is another producer in the Waskada area.聽
It is very slow in Waskada, Lowdon said. Not much is happening in the nearby Pierson area, either. CNRL has licensed a few wells in that area. 鈥淭hey鈥檙e pretty consistent. They just keep doing what they鈥檙e doing,鈥� he said.
鈥淚t鈥檚 been pretty quiet in that country,鈥� he said of the extreme southwest corner of the province.
The main drilling areas in Manitoba of late have been the Daly-Sinclair field, Virden, Manson and Birtle (the Birdtail field). The last two are north Highway 1 on the west side of the province, northwest of Virden.
The area around Cromer was quite busy in January. Indeed, when Pipeline News did a story on fracking near Cromer in early January, the activity in that area looked more like oil was at $100 a barrel, not $47. So what does that mean for this summer?
鈥淗onestly, we don鈥檛 know what鈥檚 going to happen. We鈥檙e waiting for road bans to lift. I think they (the oil companies) made their decisions and finished their expenditures. We were expecting a bigger drop than what we had,鈥� said Lowdon.
Manitoba has seen some activity in the Virden area, but more to the northwest of the province鈥檚 long-time oil capital. Elcano has been drilling south of Miniota.
鈥淭hey鈥檙e finding production where there wasn鈥檛 any before,鈥� he said.
鈥淚n the Birdtail area it鈥檚 been mostly Tundra working. As by far the largest oil company in the province, he noted, 鈥淭here鈥檚 less and less that isn鈥檛 Tundra.鈥澛�
Recompletions can be really important, he said. Lowdon noted that in some cases, companies have perforated other zones from their original targets. As an example, he spoke of Lodgepole wells which have since been perforated in the Upper Virden or Flossy Lake formations. Companies have found this a cost effective way to improve production.
In some cases, the horizontal portion of the well is not even being used anymore, and the vertical portion has been put on production.聽
Is comingling production from different formations an issue? Not really, the director said. Some tests are needed, but he said, 鈥淐omingling is not the ugly word it was before.鈥澛�
There were 64 recompletions in 2014. The Virden/Daly field was the prime area for this activity.聽
