Oil gushing at N.B. field

Exploration Stoney Creek well tests at rate of 200 barrels a day

A new exploration technique is pumping new life into an oil field that many experts thought was past its prime.

Darcy Spady, president of Contact Exploration Inc., announced Wednesday that a well drilled recently at Stoney Creek near Moncton has tested at a rate of 200 barrels of crude oil per day - a huge improvement over the small amounts trickling from the field in recent years.

The latest development moves New Brunswick another step closer to becoming a significant player in Canada's booming oil industry.

"This is tremendous news," Spady said in an interview from his Calgary office.

"We have a book reserve of 1.1 million barrels at Stoney Creek, but until we could prove that we can get it out faster than two or three barrels a day, it's like having a new car in the garage but the doors won't open "¦ Now we know we can move that oil out very effectively."

Spady said much of the credit for the new development is due to research at the University of New Brunswick in Fredericton where it was discovered that fracturing underground rocks in the area likely would increase output.

Researchers Laura Romero-Zerón, a chemical engineering professor, and master's student Mark Bacon discovered last year that the fracturing technique would create more passageways for the unusual type of crude at Stoney Creek - naphthene - which thickens much faster than other crudes when exposed to the air.

Oil first began flowing at Stoney Creek 90 years ago. But production of natural gas and oil at the field dwindled in the 1950s and 1960s and it was abandoned in the 1990s.

Contact took over the property and began exploring for new reserves about three years ago.

"Despite the fact that Stoney Creek produced for years and years into the city of Moncton and in spite of the fact that people thought it was drained, there are lots of fresh reservoirs there that have never been touched or we would not have seen the pressures we did," Spady said.

"So it's like you're going into something you expect to be stale and instead it's really fresh."

Spady said the new Stoney Creek well also revealed multiple gas zones, meaning the field will produce commercial quantities of natural gas at some point.

It's estimated the area has about 7 billion cubic feet of gas reserves.

Spady is hoping to drill more wells, with the fracturing technology, in the spring, depending on markets and capital.

It's just the latest good news for New Brunswick's fledgling oil industry, which was written off as near death not that long ago.

Contact and other junior firms such as Corridor Resources have helped renew interest in New Brunswick's petroleum-based resources.

In October, as Corridor Resources was drilling for natural gas three kilometres southeast of its McCully natural gas field, near Sussex, the company struck high-grade oil in what president Norman Miller called a potentially significant find.

The company is monitoring pressure from the $9-million well it finished installing in late November to determine its true yields. It's now producing 59 barrels a day, with the potential of reaching around 150 barrels a day from the one well alone.

New Brunswick may not have the same size reservoirs of hydrocarbons as other provinces, but it does have sufficient potential to attract junior firms looking to exploit less extensive, easy-to-reach resources.

"It's a small industry, but it's slowly and surely growing," Spady said of New Brunswick's oil boom potential.

"When I first came to New Brunswick in 2000 there was nothing. Now we have production ourselves and Corridor has production. It is growing little by little and you're going to get more companies coming in, more land sales, more competition to get land from the Crown and that money slowly starts to be plowed back into government coffers. It's a really nice process that's happening."

Spady says the company has a pool of about 20 wells at the 5,500-acre, Stoney Creek site, but only one has the fractured-rock technology.

The property, which Irving Oil held a lease on for many years, yielded 800,000 barrels of oil and 28.7 billion cubic feet of gas between 1909 and 1991.

Source: Telegraph Journal