Grapevine

First Commercial Contract Signed for Delta Gas

More than two decades after the massive exploration campaign to find Mackenzie Delta energy resources, the first commercial deal has been signed to bring a natural gas field into production.

The Inuvialuit Petroleum Corporation (IPC) and the Northwest Territories Power Corporation (NWTPC) announced recently that they have reached an agreement whereby IPC will supply natural gas to NWTPCs power plant in Inuvik from the Ikhil gas field located 45 km north or Inuvik.

The project will mark the first production of natural gas in the Canadian Arctic and provides another example of the continued commitment of the Inuvialuit, NWTPC, the Town of Inuvik and industry partners to the economic development of the Inuvialuit Settlement Region.

The contract signed, commits IPC, and its partner AltaGas Services Inc., to supply, and NWTPC to purchase, natural gas for its facilities for a 15 year period commencing with an initial delivery date of July 1, 1999. The contract also includes a pricing mechanism which will ensure that natural gas is supplied at a significant discount to diesel.

Based up on several energy demand surveys it is estimated that the consumption by the NWTPC represents about one-third of the total energy demand in Inuvik.

NWTPC has developed plans to convert its power generation facilities to use natural gas and anticipates that its facilities will be ready to receive natural gas by the initial delivery date.

The signing of the gas sales contract together with the recent conclusion of a franchise agreement with the Town of lnuvik will permit IPC to proceed with the development of the Inuvik Gas Project.

The project involves a geophysical program, the drilling of two to three wells and the construction of a 45 km buried, gas pipeline from Ikhil to Inuvik. It also includes the installation of an in-town distribution system and the conversion to natural gas buildings and facilities in lnuvik. Total capital costs of the project are estimated at approximately $30 million.

Both the IPC and NWTPC will be filing applications with the NWT Public Utilities Board to set gas and power rates.

IPC commenced its geophysical program in mid-November and intends to follow this with a major drilling program later in the winter. The drilling program involves the repair of the Ikhil K-35 well and the drilling of two new wells. Pipeline and production facilities are scheduled for the winter of 1999 with the connection of the NWTPC facility planned for July 1, 1999. The start of construction on the in town distribution system will follow thereafter during the summer of 1999.

Inuvialuit Petroleum Corporation (IPC)

The Inuvialuit Petroleum Corporation is a Calgary based oil and gas exploration and production company. It is a wholly-owned subsidiary of the Inuvialuit Regional Corporation of Inuvik which is beneficially owned by the Inuvialuir, the aboriginal people of Canada's western arctic region. In addition to the Inuvik gas project, IPC has a 53% interest in Inuvialuit Energy Inc., a rapidly growing, private western Canadian oil and gas exploration and production company also based in Calgary. IPC has been active in all aspects of oil and gas operations in western Canada for over 12 years. IPC has opened an office in Inuvik and engaged Mr. O.D. Hansen as General Manager, Northern Projects to manage the gas project.

AltaGas Services Inc.

AltaGas Services Inc. is Canada's leading independent midstream natural gas company focusing on those natural gas facilities and services necessary for the efficient movement of gas from field to market. Alta Gas, a private, Calgary-based company, commenced operations on April 1, 1994. To date AltaGas has acquired or constructed approximately $80 million in assets including 290 million cubic feet per day of natural gas processing capacity and 1400 kilometres of gathering line s. The company currently has 71 employees and contract personnel at its head office and various field locations.

Northwest Territories Power Corporation (NWTPC)

Owned by the Government of the NWT, the Corporation operates hydro and diesel generation and distribution facilities in 54 communities, It has 285 employees and serves 25,000 customers either directly or through franchises. The Corporation has #350 million in assets, with operating revenues in 1996/ 97 or $102.6 million. It is headquartered in Hay River.

The Corporation's Inuvik office serves as the operations headquarters for the Western Arctic Region. The Inuvik plant operates five diesel generators with an installed capacity of 18.7 megawatts, and fuel consumption of 6.8 million litres per year for electrical generation. In addition, diesel-fired boilers provide heat for a district heating system using 7.5 million litres.

To accommodate the new gas fuel source, the Corporation is planning to convert its largest diesel generator to gas, as well as purchase one new gas generator. Residual heat from the engines will be used to replace the existing diesel boilers. The remaining engines would be kept as standby diesels. The total cost of the conversion is estimated at $3.9 million.

CDA Signs Contract With QC Data and Subcontractors Spectrum and Robertson Research for Hard Copy Services

Common Data Access Ltd and QC Data (UK) recently signed contracts with Spectrum Energy and Information Technology Ltd.

QC Data currently manage CDNs digital well log system. Under this new contract, Spectrum will catalogue, rationalize and scan hard copy well logs and well reports from the UK Continental Shelf (UKCS) as a service to CDA, via its prime contractor, QC Data. The work to be performed under this contract constitutes a vital step in the management of oil exploration information resources and towards the fulfilment of the overall objectives of CDA.

Over a two year period, Spectrum will build a complete master hard copy set of well logs and associated well reports to include the 7,000 wells drilled in the UKCS to date. Rationalization of multiple copies stored by oil companies will allow 2,000,000 items of hard copy to be reduced to approximately 250,000. A unique and complete master hard copy data set will them be available, yielding significant cost and efficiency benefits.

III Reservoir Characterization Symposium

The Venezuelan Society of Geophysical Engineers (SOVG), the Society of Exploration Geophysicists (SEG), the Venezuelan Society of Geologists (SVG), and the Venezuelan Society of Petroleum Engineers (SVIP), are pleased to announce the III Reservoir Characterization Symposium - Developing New Strategies, to be held March 25-27, 1998, in Puerto La Cruz, Venezuela . This event has the endorsement of the American Association of Petroleum Geologists (AAPG), and the Society of Petroleum Engineers (SPE).

The focus of this three-day symposium is to show how the integrated use of new methodologies results in a better under standing, characterization, and recovery of the reservoirs. Presentation of case histories where the integration plays a major role in the achievement of improvements in production will be preferred.

If you require further information, please contact: Symposium Chairperson, Mariangela Capello de P, INTEVEr, S.A., El Tambor, Los Teques, 1201 Venezuela, Phone: (+58) 2-908 6926, Fax: (+58) 32-30 8124, email: cape llo@intevep.pdv.com. or Arcangelo Sena , ARCO, 2300 W. Plano Pkwy., Plano, Texas 75075 USA, Phone: (972) 509-3056, Fax: (972) 509-6482, email: asena@mail.arco.com, or visit the III Symposium web site: www.sovg.org.

GAC-MAC Sudbury

The Joint Annual Meeting of the Geological Association of Canada (GAC) Mineralogical Association of Canada (MAC) will beheld May 26-28, 1999 in Sudbury, Ontario. For details contact: Dr. P. Copper, Dept. of Earth Sciences, Laurentian University, Sudbury, Ontario P3E 2C6; Phone: (705) 675-1151 (ext. 2267); Fax: (705) 675-4898; email : gacmac99@nickel.laurentian.ca

Lynx Information Sets Up GIS Group in London

Lynx Information Systems UK announces the setting up of a specialist Geographical Information System (GIS) Group in London. The aim of this Group is to support products developed by Lynx and to assist clients using ESRI's ArcInfo/ArcView application for exploration data management.

Each of the Lynx "Exploration Advisers" covers a certain geographical area and consists of a wide variety of exploration and production related maps linked to well/field databases, well-logs and seismic sections, all in digital format and managed from ArcView. Text, tables and figures are also produced digitally and have been incorporated into the Adobe Acrobat application.

The GIS Group will be developing "Advisers" for other exploration areas throughout the world (Iraq, Libya, West Africa, Western Siberia, Venezuela, Algeria and SE Asia are already available), and helping companies incorporate their own proprietary information into the existing information pool.

GeoGraphix Releases GES97™, Prizm™ V.2.1, and ResMap™

GeoGraphix, Inc. recently announces the release of several components of the company's integrated data management, mapping and interpretation systems, including: GES97, PRIZMv.2.1, and ResMap, enhancing E&P Company workflows with an integrated Suite of products for Geologists, Geophysicists, Petroleum Engineers and Landmen.

GES97 delivers enhanced deviated well functionality, expanded support for international map projections, open data access to the GES database, and much improved pathways of integration with the company's other 16- and 32-bit products, including ResMap and PRIZM.

PRlZM v.2.1 is a multi-well log analysis system. With PRIZM v.2.1, users can quickly and accurately present log interpretation results in a map view presentation. PRlZM allows users to calculate any curve statistic from their project and use GES97 to create 2D and 3D map views of well log data. Log-derived values from PRIZM, such as average and total net pay, sand count, porosity, and Sw can be gridded, contoured and displayed in GES97. Integrating log and geological data allows users to enhance their reservoir understanding and better validate their interpretations. In addition , PRlZM v.2.1 provide s users with multi-well crossplotting functionality including histograms and curve fitting (regression analysis) lines. Users can compare an active well to other wells in the project and then quickly make required adjustments.

ResMap, new to the GES97 Workbench, enables earth scientists and petroleum engineers to easily incorporate production and pressure data into geologic interpretations, property evaluations, and field operations in an integrated fashion. ResMap provides a quick means to access this data directly from a map and also generates presentation-quality basemap displays using powerful pie symbol and bubble mapping capabilities.

Spectrum Installs Exemplar

Spectrum Energy and Information Technology Limited has installed an Exemplar S-Class Scalable Parallel Processor from Hewlett-Packard Convex in the Woking (UK) Seismic Data Processing Centre, the company recently announced. A Hewlett-Packard Exemplar has also been installed in the Spectrum centre in Houston. Both Woking and Houston systems are already in production use.

First Report by Canadian Gas Potential Committee

The Canadian Gas Potential Committee, an independent volunteer group of geoscience professionals from industry and government affiliated with the University of Calgary, has completed a comprehensive assessment of Canada's natural gas resources. The report provides natural gas resource estimates on an exploration play basis. The Committee plans to publish resource estimates on a regular basis, similar to the United States counterpart.

The study, based on year-end 1993 reserves data, has estimated 570 trillion cubic feet (Tcf) of discovered and undiscovered natural gas in Canada from conventional and unconventional sources. This total represents approximately 50 years of supply from conventional sources and 50 years from coalbed methane sources. Large undiscovered gas pools are predicted to be in the Devonian and Foothills Play Groups in Western Alberta.

A sample copy of the report is on display at the office of the Canadian Society of Petroleum Geologists, #160, 540 - 5th Avenue S.W. For additional information on the report, the Committee's ongoing assessment activities and volunteer opportunities contact Ed Petrie, Phone: (403) 781-5599 or Fax: (403) 781-5598.

Western Geophysical to Construct Two New State-of-the-Art Seismic Streamer Vessels

Western Geophysical, Houston, has contracted with Ulstein Verft AS of Norway to construct two new state-of-the-art superseismic vessels at a total cost of approximately $80 million, excluding the seismic equipment.

Both vessels, featuring the UT753 design, are designed for worldwide usage in deepwater marine seismic surveys. The first vessel, scheduled for delivery on March 30, 1999, will be first assigned to Western's EAME fleet. The second vessel, to be delivered on November 30, 1999, will be used initially to conduct seismic operations in the Asia-Pacific region.

The two vessels will be of identical design – 91 m long and 23 m wide with towing capability of 12 or more full-length streamers. At 10,800 hp each, the vessels will be the two most powerful in Western Geophysical's fleet.