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Jump to : Atlantic Canada Area • Nova Scotia • Newfoundland • New Brunswick
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Atlantic Canada Land Holding Map
New Maps currently under construction
Cilck here for an archive version of the entire Atlanic Canadian region map in 2005(393KB)
68,000 acre deep Beech Hill / Frederick Brook, NB. (89% W.I.) operated*
475,000 acre Windsor, NS. (5% Gross Overriding Interest) non-operated
(all operated except NL lands and one SK well)
5,500 acre Stoney Creek Producing field NB. (100% W.I.)
68,000 acre shallow South Stoney Creek, NB. (89% W.I.)*
22,335 acre Cocagne & Monteagle, NB. (100% W.I.)
105,805 acre Parsons Pond/Portland Creek, NL. (5% W.I. carried for first well in each of 3 blocks)
640 acres near Stoughton, SK. - shallow production
177,623 acres Cumberland, NS. (1.5% GORR)
* Beech Hill / Frederick Brook shale and South Stoney Creek are deep and shallow horizons of the same block |
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New Brunswick
Eastern Moncton Sub-basin (73,898 acres)
Including Stoney Creek Field (5,500 acres)
& South Stoney Creek (68,000 acres)
Contact initially acquired a 100% working interest in approximately 74,568 acres of leases and licenses located 15 kilometres south of Moncton, New Brunswick, in an area known as the eastern Moncton subbasin. This area lies adjacent to and includes the Stoney Creek field, which produced approximately 800,000 barrels of oil and 28 bcf gas between 1909 and 1991. Here, the Albert Formation of the late Devonian to Tournaisian Horton Group records the deposition of thick sequences of deep lake, organic rich shales and lake margin fluvio-deltaic sandstones. The former represent an excellent petroleum source rock while the latter constitute productive reservoirs. As of June, 2007 the 5500 acres Stoney Creek Field has been put back into production, exploiting the proved and probable reserves of 1,207,000 barrels of oil and 7.2 billion cubic feet of natural gas. During the last and current fiscal year, Contact has completed the following work at Stoney Creek Field (5500 acres):
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A major workover initiative was commenced in the Stoney Creek Field, starting with 14 initial candidates with competent wellbores. These were swab tested for production, then logged as necessary. The data from these candidates, combined with previous logging, production testing and production fluid samples allowed us to get a much more comprehensive picture of the reservoir. A reservoir study was commenced at the University of New Brunswick, utilizing the services of Dr. Laura Romero-Zeron, an internationally experienced reservoir specialist, as well as Mark Bacon, a Masters student in the Engineering program. This study is still ongoing, but has allowed us to better understand the composition of the production fluid and design future workover, new drill and completion programs in the Stoney Creek Field.
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Commencing in June of 2007, commercial production was initiated in the Stoney Creek field, initially from the two horizontal wells and then from re-worked vertical wells with capable wellbores. The oil has proven to have a consistent light gravity of approximately 35 degrees API, with a Naptha signature to the crude. It is sold to the nearby Irving Oil refinery in Saint John, New Brunswick at a price of Brent Spot less $5. Contact has staffed the field operations with contract operators, which are in place to handle much higher volumes of production without increasing infrastructure.
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On the basis of ongoing production since June 2007, augmented by the aforementioned reservoir engineering study, two annual reserves reports and analysis of the fluid properties of the reservoir, we have been able plan future activities with a much higher degree of certainty.
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On December 9th and 10th, 2008, the newly drilled vertical well N-78-2328 was fractured in two zones. The resultant swab test of the well showed flow rates of up to and including 200 barrels of crude oil per day. The well has been on a restricted production rate of 30 bbl of crude per day since that time to determine reservoir parameters and correct spacing for reservoir exploitation.
During the last or current fiscal year, Contact completed the following other activities in New Brunswick (South Stoney Creek / Beech Hill Shale):
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Completed the drilling on the Shenstone G75-2328 at a depth of 2180 metres, suspending the well for future deepening or evaluation. As a result of the data gathered during drilling, a more detailed evaluation of the regional geology and geophysics was carried out.
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Received back 100% of the deep (shale) rights on the Beech Hill block in New Brunswick, when it was relinquished by Triangle Petroleum Ltd and announced by Triangle on December 18, 2008. The shallow South Stoney Creek rights are still held jointly between Contact (72% operator) and Shoal Point Energy (28% non operator).
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Nova Scotia
Windsor Block (475,000 acres)
This block covers the Kennetcook Basin, part of the onshore Maritimes Basin, in Nova Scotia. Shallow
Horton potential has been identified by previous drilling and seismic programs. The Noel #1 well, drilled
in 1975, encountered gas shows in the Cheverie and Horton Bluffs Formations of the Horton Group, at
depths between 350m and roughly 1,000m. No hydrocarbons were produced but good permeability and
porosity were indicated from testing and logging. Other old wells and more recent stratigraphic tests by
Northstar Energy have also encountered gas in the Horton section, but a lack of complete logging and
testing has precluded the identification and characterization of the reservoir zones.
Between 1999 and 2002 two new seismic datasets were acquired over this area. Northstar Energy shot
a grid in 2000 which was a vast improvement over older data. Contact acquired 40 km of 2-D seismic in
2002 to firm up drilling targets. Subsequently, on the eastern half of the block, Devon Energy assigned
its remaining interest to Contact in exchange for a 3% GORR, leaving Contact with a 100% working
interest.
In 2004, through a farmout agreement with Oiltec Resources Ltd., a well was drilled in the western part
of the block. The well was terminated at 496 m after encountering salt at the top of the seismically-
defined target interval, and did not penetrate into the underlying Windsor reef target. Contact was
carried for a 10% working interest and earned an additional 5.5% by paying 9% of the drilling and
abandonment costs of the well. Interests were earned by Contact and Oiltec in the western part of the
block (322,540 acres) to the depth drilled. Contact acquired Oiltec’s remaining interest in the Windsor
block bringing our working interest to 100%
In June of 2007, Contact entered into a farmout agreement with Triangle Petroleum Corporation
(Elmworth Energy) to explore for shale gas on Contact’s Windsor exploration block. This is a follow-up to
an extensive study that Triangle performed which identified a large potential shale gas resource. As part
of the agreement, Triangle drilled two test wells and acquired 3-D and 2-D seismic on the block to earn a
70% working interest. Contact was carried through the drilling, completion and testing of the first well
(Kennetcook #1).
On July 3, 2008, Contact announced that it elected to participate on a working interest basis in the
Windsor Shale prospect in Nova Scotia. Contact retained the right to participate with a 30% working
interest rather than convert its working interest to a 5% GORR. Contact notified Triangle, the operator
of the property, that Contact would continue as a 30% working interest partner. Contact has participated
on the drilling of the N-14-A, O-61-C and E-38-A wells, as well as the completion of the N-14-A well, but
elected to not participate on the completion of the O-61-C and E-38-A wells, due to the fact that there
has been no economic recovery of gas from any wells in the project.
On June 10, 2009, Contact converted its Windsor 30% interest in the Windsor Block to a 5% royalty
interest. Contact and Triangle executed a definitive agreement which converted Contact’s 30% working
interest in the Windsor Production License to a 5.75% non-convertible gross overriding royalty (NCGORR)
on Triangle’s 87% interest in the block. This is approximately a 5% royalty on the entire Windsor block.
As compensation for the conversion, Contact received a cash payment of $270,000 and the assumption
by Triangle of liabilities related to Contact’s former working interest.
Cumberland Coal Bed Methane (178,000 acres)
This 178,000 acre block, in northwestern Nova Scotia, was jointly acquired with Amvest Nova Scotia, Inc., with each company owning 50% of the rights to explore for coal gas. Previous exploratory work on these lands by Amvest included the drilling of two stratigraphic test wells. The prospect lies at depths of 600 metres to 2,200 metres within coal-bearing intervals of the Springhill Mines and Joggins Formations of the Westphalian-aged Cumberland Group. The coals are ranked as high-volatile A to medium-volatile bituminous, and occur in the northeast to southwest- trending Athol syncline, which affects Carboniferous rocks in the area.
In 2004, Contact signed an option agreement with Stealth Ventures Ltd. whereby Stealth would have to elect, prior to March 31, 2005, to drill a horizontal well to earn 50% of Contact’s interest in the block. This option was exercised and Stealth has committed to spend $1.6 million to drill a well on the block by December 31, 2005. Furthermore, Stealth has signed an agreement with Amvest to take over Amvest’s 50% interest in the block.
The operator has drilled one horizontal well on this property in March 2006. The well successfully drilled a 430 metre horizontal leg within the #6 coal seam. Sproule and Associates Limited of Calgary Alberta completed a report recognizing 1.183tcf of discovered CBM resource on the Cumberland Exploration Permit. Accordingly, Contact’s net working interest share of the Cumberland property resource would be 295-BCF. This well was completed during the quarter and placed on production test.
Two additional wells have been drilled on this property. The first well, referred to as Coalmine Brook #12 drilled a 738 metre horizontal coal section in the #2 seam. The next well, referred to as Coalmine Brook #13 drilled a 1000 metre horizontal coal section in the #3 seam. We now have three horizontal wells drilled in three different coal seams and will have all three on test during the third quarter of fiscal 2007.
It was announced in March 2007 that Contact's working interest in the Cumberland CBM play was converted into a royalty interest. In addition to a cash payout and assumption of debt totalling $750,000, a total of 1.5% non-convertable gross override is in place (existing 0.5% plus 1.0% as part of the agreement). The operator, Stealth Ventures Ltd., did fracture stimulate on of the wells in late 2007 to determine if commercial production could be obtained. |
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Newfoundland
Parsons Pond Block (32,290 acres), Portland Creek Block (38,505 acres) and Centre Block (35,475 acres)
These blocks are located in the mid-Ordovician dolomite play on the Great Northern Peninsula of western
Newfoundland and are held 50% and 71% respectively by Contact. They also lie in the productive “inversion fairway”, equivalent to the northern landfall of the Appalachian fold-and-thrust belt, which is an important producing area in the southern Appalachians. The area contains four important play types: (1) structural traps within dolomitized platform carbonates of the St. George Group, which have produced oil at rates greater than 2,000 bopd on the nearby Port au Port Peninsula, (2) stratigraphic traps associated with hydrothermal dolomitization along sub-vertical fault trends (“Trenton-Black River” type), (3) dolomitized deep-water carbonates (breccias and calcarenites) which stratigraphically overlie the platform, and (4) massive, deep water sandstones, which are generally low in inherent porosity and permeability, but which are highly fractured.
In general, reservoirs are widely interposed with deep-water, marine source rocks, creating favourable source-reservoir-trap scenarios. Over the last century, shallow production of light, low-sulphur oil occurred near seeps around the shores of ponds in the area. Approximately 300 km of good quality seismic data collected in the 1990’s has enabled the identification of drilling targets in the various play types.
In the winter of 2004, Contact operated a continuous-core well (Parsons Pond #1) to test one of the seismically-defined shallow dolomitized breccia targets (type 3) above. The reservoir target was not found beneath a section of massive sandstones and tight, deep-water carbonates within the Humber Arm
Allochthon. The borehole encountered numerous hydrocarbon shows in natural fractures. The core is has been evaluated for prospective intervals. The discovery of hydrocarbons in the fractures in general points to a potentially large fractured reservoir play in the area which will require further mapping and evaluation.
In January of 2008 Contact entered into two farmout agreements on these blocks with the goal of several wells being drilled over upcoming years, the primary target being the Trenton – Black River formation: In Parsons Pond, Contact entered into an agreement with a private company whereby they had the option to farm-in on our 50% working interest in the block and drill a well within two years. Contact would have been carried on the well for a 20% working interest. In Portland Creek, Contact also entered into an agreement with the same private company whereby they had the option to farm in on our 71.4% working interest and drill a well within two years. Contact would have been carried on the well for a 17.8% working interest. As part of these agreements Contact also had the option to participate for up to a 12.5% working interest in a third block which is between the two blocks above.
In March 2009, Contact negotiated to lower its interests in the two blocks it already owned in exchange for a carried interest position of 5% on all three blocks including the centre block where it had no ownership prior to the transaction. Contact also received as compensation $150,000. The private company is currently seeking to fulfill their obligations and there can be no assurances that any activity will occur. Further details on the status of this prospect are provided in subsequent events at the end of this document.
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Saskatchewan
Southeast Saskatchewan
On November 19, 2007 it was announced that Conatact had purchased approximately 25 barrels per day of oil production in southeastern Saskatchewan, augmenting Contact’s current oil production in New Brunswick. The production was acquired from a private company for a total purchase price of $200,000. The wells have all been drilled within the last two years. Contact will operate the majority of the properties and will have an average working interest of 85%. The acquisition will be retroactive to October 1, 2007.
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