Preeceville another Turner Valley ?Bruce Johnstone, Leader-Post
Published: Thursday, February 14, 2008Nordic Oil and Gas Ltd. of Winnipeg is hoping to find oil at Preeceville, about 100 km north of Yorkton, an undeveloped area that one government official called "moose pasture."
But tiny Nordic isn't the only company looking for oil and gas in an area that hasn't seen much exploration activity since the late 1930s.
Hunt Oil Canada, the subsidiary of giant Hunt Oil of Dallas, Tex., is said to be among the companies drilling exploratory wells in the same area.
Donald Benson, chairman and CEO of Nordic, said the company, which is traded on the TSX Venture exchange, has been in the Preeceville area since 2001. "As a result of our exploration work there, there are now many companies exploring in the area,'' Benson said.
What Nordic apparently discovered in the area north of Preeceville late last year were "oil seeps,'' not unlike those that led to the discovery of oil at Turner Valley, Alta., in 1914, Benson said.
Nordic drilled two exploratory wells in the Preeceville area and hopes to drill another two to three wells in March. The company is now awaiting environmental and other approvals and expects to be in position to apply for well licenses later this week.
According to Nordic's Web site, "the east-central region of Saskatchewan is a shallow, cost-effective area where it is believed that enormous quantities of oil are trapped by the 'Prairie evaporate salt collapse edge'."
"We're hopefully going to make a huge discovery here,'' Benson said. "We believe it's going to be light crude.''
Benson said Nordic has acquired a "tremendous amount of land'' in the area, consisting of about 112,000 acres. "We expect to be something very substantial (in) a whole new area for Saskatchewan, and we believe that we'll be right in the heart of it."
Nordic also believes the Preeceville area, which is on the northeastern edge of the Western Canadian Sedimentary Basin, may also hold "an abundance of shale gas.''
Ed Dancsok, director of the geology and petroleum lands branch of Saskatchewan Energy and Resources, said the Preeceville area has seen about 50 wells drilled in the last three or four years. A subsidiary of Nordic was the first to drill in the area since the late 1930s.
"They're just following up on 1930s reports of gas, shallow natural gas, coming out of the area,'' Dancsok said.
Dancsok said Nordic's exploratory work has led to an influx of about five to 10 companies into the Preeceville area, including PanTerra Resource Corp., Vermillion Energy Trust, Propel Energy Corp. and even Hunt Oil Canada, which has drilled a half dozen wells.
"When they go into an area, they go big or they go home,'' Dancsok said, referring the privately owned Hunt Oil, owned the famous Hunt family, which attempted to corner the world silver market in 1979.
"There have been no discoveries of any commercial extent. There have been wells drilled and they're all in various stages of testing,'' Dancsok said.
Dancsok said shallow shale gas appears to be the main target of exploration, although Nordic hopes to find oil in the Winnipegosis formation.
"This is the kind of (exploration) that makes the industry in province. The big guys usually sit around and wait around until some little guy, like (Nordic), makes a discovery, then they buy them up and away they go."