Understanding the Foothills

Manitok’s Stolberg discovery is an example of a bypass reservoir in the foothills: it is a shallower conventional reservoir which was indentified during a deeper drilling operation.

The Foothills Belt covers a vast area of the Americas forming a continuous belt of oil and gas-bearing strata from the southern tip of South America to Canada’s Arctic islands (Figure 1). The foothills form a narrow eastern band along the eastern part of the much wider fold belt and resulted from compressional forces brought upon by ancient collisions of rigid plates over the outer crust of the earth. Substantial reserves have been, and continue to be, found in the associated complex geological structures. Figure 2 features complex fold structures occurring in the central mountainous, parts of the fold belt, in areas typically not exploited by oil and gas companies. However, the mountains provide excellent models for predicting buried reservoir trends and geometries in the foothills, in areas that may have very limited surface relief. The foothills play comprises a unique (folded and faulted) geological character, and the associated surface can range from nearly flat land to rolling hills. In contrast, the Plains, from a geological standpoint, comprise horizontally layered rock covered by flat land or rolling hills. In other words, physiography, by itself, cannot be used to distinguish these two very different geological areas.

Figure 1: Map showing the distribution of the  Foothills Belt (orange dotted line) in Alberta, British Columbia, Yukon, and Territories.

In the Plains areas of Western Canada, oil and gas has accumulated in very simple structures or in areas where a lateral reduction in permeability has halted leakage of the hydrocarbons to the surface. Early explorationists in Western Canada generally focused their efforts on conventional reservoirs in the Plains; that is, on reservoirs with adequate permeability, where associated hydrocarbons could flow to surface without stimulation. The typical picture that represent these early days of exploration are of drilling rigs with huge amounts of oil rushing from the ground due to uncontrolled outflow from a high permeability, conventional reservoir. This was a surprisingly common occurrence in the early stages of exploration in Alberta. While safe drilling practices have eliminated these type of outflows, the high permeability, large conventional reservoir discoveries have all but disappeared in the Plains. These older conventional fields of the Plains are now severely depleted, and operators have now moved on to either very small conventional pools and oil sands, or have focused their efforts on the “tighter” (low permeability) rocks in the Plains. While hydrocarbon accumulations in the tight rocks can still be large, hydrocarbons do not flow to surface unless subject to aggressive and expensive stimulation programs (commonly referred to as “multi-stage fracs”). Also, the amount of oil or gas that can be recovered from the rock is a fraction of what conventional reservoir rocks yield. Recoveries of the tighter rock can be increased with extensive additional drilling and fracture stimulation operations which forces finding and development (“F&D”) costs higher. The low permeability reservoir has the additional characteristic of significantly higher decline rate, relative to conventional reservoirs, during the first year of production, and operators require ever increasing progression of drilling operations to offset these harsh declines. In some cases, proven booked reserves of high-decline unconventional wells may be unremarkable. In order to add value and lower F&D costs, operators may book a very high proportion of undeveloped reserves, which by nature, are risky, since commodity prices and drilling and operating costs are only estimates, which become less and less certain with every year that the reserves remain undrilled. In contrast, conventional pools have good permeability; the reserves per well tend to be much higher, and the decline rates can be very low.

Figures 2 & 3: Folded character of the rock as a result of regional compression forces that created the Foothills Belt. Colour diagrams above and below showing deformed and undeformed state of the rock layers, respectively.

While the mature state of development in the Plains requires these expensive stimulation operations, the foothills is decades behind, and extremely large conventional reservoirs can still be found. The first wave of major oil and gas producers, like Talisman Energy Inc. (“Talisman”), were a success story of discovery in the geologically complex, prolific foothills gas pools, some of which are the largest in North America. The majors participated in high capital drilling programs, which, because of the large reserves and low technical risk, were a focus for tremendous growth for a number of years. The abundant smaller reservoirs in the foothills still exist. However, in the past, they were too small to capture capital or to provide return on investment due to large infrastructure expenses. Now that this infrastructure has been installed, these smaller conventional reservoirs are extremely attractive targets. This pattern of major discovery and follow-up exploitation has been repeated a number of times over the last 50 years in the Plains. Manitok’s Stolberg discovery is an example of a bypass of reservoir in the foothills: it is a shallower conventional reservoir which was indentified during a deeper drilling operation. While smaller in magnitude as compared to the deeper sour foothills gas reservoirs, the sweet Stolberg condensate and gas discovery is quite large when compared to recent conventional hydrocarbon discoveries over the last several years in the Plains. If explorationists of the past had tapped into the Stolberg reservoir using poor drilling practices of the time, an uncontrolled outflow of gas and condensate may have lasted for several weeks. In contrast, outflow from an unconventional well would be short lived or not occur at all.

Figure 4: Regional cross section showing style of folding and faulting in the Manitok’s Fallen Timber property. Vertical black lines are existing well bores. Coloured units represent the various rock layers, including reservoir intervals, in the Western Canada Sedimentary Basin.

The Foothills Belt has its challenges, and not every folded reservoir is the same. It is the most geologically and geophyscially complex area in the Western Canada Sedimentary Basin. It requires operational and technical experience that few companies have mastered over the past decades. Talisman was an exception, and it developed a world class technical team, which yielded significant financial success for the company. Their knowledge of the structural complexity provided a competitive advantage over other operators. Members of the former Talisman foothills team, now at Manitok, pioneered the very challenging horizontal drilling in the foothills. We understand that the brittle reservoir rocks in the foothills fracture extensively as a result of folding and faulting. Once a particular structural model is resolved, fractures intensity and orientation can be predicted, and wells can be steered to exploit the natural fracture-enhanced permeability. Successful horizontal foothills wells of the past have yielded impressive initial production rates, and a large number of reserves were booked for each well, both of which drove very favourable economics. The knowledge gained from many years of seismic processing and interpretation, along with the experience of steering the wells through folded rocks in order to intersect the best part of the reservoir cannot be understated. With more than 250 tested foothills structures, we have also drilled enough wells to comprehend the role of borehole stability, which is a primary cause of some of the largest operational mishaps in foothills drilling programs.

The fact that Talisman was a leading drilling operator for many years was a result of the very analytical approach to wellbore design. That same analytical approach on every aspect of a foothills drilling operation has been adopted by Manitok. All drilling projects at Manitok will certainly benefit from the knowledge gained by many years of hands-on experience along with this thorough approach.