Doug Ashbury and Derek Neary
Northern News Services

NNSL (May 17/99) - A natural gas discovery near Fort Liard is being ranked among the country biggest.

Chevron Canada Resources, with partners, said well K-29 testing indicates a potential discovery from 12 billion cubic metres to 18 billion cubic metres (400-600 billion cubic feet).

The well's expected production rate is estimated to be between 2.1 million cubic metres and 3.0 million cubic metres of raw gas a day (70-100 million cubic feet). Raw gas is gas prior to processing.

This rate places the well in the top one-tenth of one per cent of all wells drilled in Canada, Chevron Resources, a unit of San Francisco-based Chevron Corp., said.

Plans are being developed to construct a pipeline and facilities to put the well into production by May 2000, Chevron said. A second well, O-26, is being evaluated with drilling possible this summer.

Chevron also said it is planning seismic work in the significant discovery licence area this summer to select additional drilling locations.

"We are extremely pleased with the project results to date as they have exceeded our original expectations concerning well deliverability, reserve size and cost performance," said Jim Simpson, Chevron Canada Resources president.

"These were all key ingredients necessary to make the project commercially successful in this technically challenging environment," he said.

The K-29 well was drilled to a total depth of about 10,000 feet and tested natural gas in the Devonian Nahanni zone.

Lease, access and drilling costs were about $16 million, about 20 per cent under budget and six weeks ahead of schedule.

Chevron operates the well on behalf of its partners and has earned a 43.4 per cent interest in K-29.

Partners include Purcell Energy with a 24 per cent interest and Berkley Petroleum, which holds 21 per cent.

Other partners include Anderson Resources, Paramount Resources, Ranger Oil, Numac Energy, Founders Energy and Ascot Energy and others.

During a recent leadership meeting in Fort Liard, Acho Dene Koe Chief Harry Deneron said there will be an application for a gas pipeline within the next two to three months.

The Acho Dene Koe are contemplating investing in a gas plant and leasing it back to an oil and gas company, said Deneron.

The Acho Dene Koe have already begun a joint-venture partnership, Akita/Sahcho Drilling, with Calgary's Akita Drilling. They were involved in drilling on rig K-29 and with the other gas rigs currently in operation.

At its peak over the winter, there were six rigs established in the area, said Shane Parrish, general manager of the Liard Valley Band Development Corp.

Residents of the Liard area have benefited from employment on gas rigs, building access roads, providing fuel, camp and catering services, heavy equipment, brush cutting as well as helicopter and airline services.

Acho Dene Koe's Beaver Enterprises Ltd. has employed up to 315 people in the services sector, making it the largest single employer in the region outside of the government.

Beaver Enterprises paid wages over the past year amounting to more than $3 million. Forty-seven per cent of those wages went to people in the community, while another 13 per cent went to employees from the surrounding region.

Giles Morrell, senior petroleum geologist with the federal government's Northern oil and gas directorate, said Chevron's announcement is very encouraging because it indicates a "trend."

In 1998, Ranger estimated a discovery of six billion cubic metres of natural gas at its P-66A well, located close to the Chevron discovery.

If the Chevron well goes into production, it would join Norman Wells, Pointed Mountain and Ikhil as oil and gas producers in the NWT.

The $32-million Ikhil project is due to start supplying natural gas to Inuvik in August. Ikhil's resource, which will supply Inuvik for 20 years, is estimated at 390 million cubic metres of gas from two wells, K-35 and J-35.

Lyle Nies, Inuvik Gas general manager, said the company will be hiring eight full-time workers this year to run the system. In all, there will be nine new jobs associated with the project. These jobs will be in production, distribution and office management areas. Overall, Ikhil is estimated to create 230 person years of employment.