Call for Bids 2006 NL06-02 Michael E. Enachescusbutt/NL_Energy_Plan_GeoScience Information/cfb_nl06-2... · Call for Bids 2006 NL06-02 Michael E. Enachescu 1 1. Introduction This

Call for Bids 2006 NL06-02 Michael E. Enachescu Foreword This report has been prepared on behalf of the Government of Newfoundland and Labrador Department of Natural Resources (NLDNR) to provide information on land parcels being offered in the Canada-Newfoundland & Labrador Offshore Petroleum Board’s (C-NLOPB) 2006 Call for Bids NL06-2. This year the Board has issued three separate Calls for Bids, including:

1. Call for Bids NL06-1 (Jeanne d’Arc Basin) consisting of three parcels; 2. Call for Bids NL06-2 (Sydney Basin) consisting of three parcels; and 3. Call for Bids NL06-3 (Western Newfoundland and Labrador Offshore Region)

where five parcels are offered. These eleven parcels comprise a total of 1,712,758 hectares. Interested parties have until 4:00 p.m. on November 15, 2006 to submit sealed bids for Call for Bids NL06-1 (Jeanne d’Arc Basin) and Call for Bids NL06-3 (Western NL Offshore Region) and until 4:00 p.m. on November 30, 2006 to submit sealed bids for the Sydney Basin Call for Bids NL06-2. This report focuses on Call for Bids NL06-2 that includes three parcels with a total area of 768,768 hectares (1,899,667 acres) within the Sydney Basin, located off the southwest coast of the island of Newfoundland. Two separate reports provide information on the other two Calls for Bids and are available at http://www.nr.gov.nl.ca/nr/. Additional petroleum related reports from the Department of Natural Resources are available at: http://www.nr.gov.nl.ca/mines&en/publications/. Selected references on the geological setting and petroleum potential of the Sydney Basin are also provided at the end of this report. This report should be referenced as Enachescu, M.E., Call for Bids NL06-2, Parcels 1 to 3, Regional Setting and Petroleum Geology Evaluation, Government of Newfoundland and Labrador Department of Natural Resources. I acknowledge the contribution to the writing of this report from Drs. Pascucci, Gibling and Williamson who earlier summarized the regional geology of the Sydney Basin in several published papers and to Kris Kendell and Paul Harvey from NSDE and Dr. Mukopadhayay of Global Geoenergy Research who have carried out regional evaluations on the petroleum potential of Atlantic Canada’s Carboniferous basins. For information on how to submit a bid in this Call for Bids go to: http://www.cnlopb.nl.ca/ and see the March 22, 2006 News Release.

Call for Bids 2006 NL06-02 Michael E. Enachescu Acronyms used in this report: C-NLOPB = Canada-Newfoundland & Labrador Offshore Petroleum Board C-NSOPB = Canada-Nova Scotia Offshore Petroleum Board NSDE = Nova Scotia Department of Energy NLDNR = Government of Newfoundland and Labrador-Department of Natural Resources NL06-1, 2 and 3 = identifiers for the three 2006 Call for Bids GSC = Geological Survey of Canada NS = Nova Scotia NL = Newfoundland and Labrador PEI = Prince Edward Island NB = New Brunswick PL = Production Licence EL = Exploration Licence EP = Exploration Permit (onshore only) SDL = Significant Discovery Licence DPA = Development Plan Application TD = Total Depth Mbr = A Member of a geological Formation or Group bopd = barrels of oil per day mmcfd = million cubic feet per day tcf = trillion cubic feet bcf = billion cubic feet mmbbls = million barrels pers. comm. = personal communication

Call for Bids 2006 NL06-02 Michael E. Enachescu

TABLE OF CONTENTS

1. Introduction 1

2. Exploration and Development Background 2

2.1. NL Petroleum Production 2 2.2. Large Paleozoic Under-Explored Area 3 2.3. Atlantic Canada Exploration History in Paleozoic Basins 5 2.4. Recent Sydney Basin Landsale Results 14

3. Regional Geology of the Sydney Basin 15

3.1. Location 16 3.2. Basin Overview 17 3.3. Litho-stratigraphy of Sydney Basin 20 3.4. Interpretation of South Sydney Basin Seismic Data 22 3.5. Basin Evolution 24 3.6. Offshore Well Results 25

4. Petroleum Geology of the Sydney Basin 27

4.1. Source Rock 27 4.2. Reservoir Rock 28 4.3. Seals 28 4.4. Hydrocarbon Traps 29 4.5. Maturation and Migration 30 4.6. Petroleum Prospect Risks 31

5. Petroleum Potential of 2006 Call for Bids Parcels 1 to 3 31 5.1. Parcel 1 35 5.2. Parcel 2 37 5.3. Parcel 3 38

6. Discussion 38 7. Conclusions 39 8. Acknowledgements 40 9. Further Reading 40


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1. Introduction This report focuses on Parcels 1 - 3 of the C-NLOPB Call for Bids NL06-2 which are located in the Carboniferous aged Sydney Basin off the southwest coast of the island of Newfoundland, in water depths ranging from zero to 500 metres (Figure 1). Although no other licences are currently extant within the Sydney Basin on the NL side of the boundary, several offshore licences are held on the Nova Scotia side and onshore rights in Carboniferous basins are held throughout the Atlantic Provinces – including on the west coast of the island of Newfoundland (Figure 2). This report provides background information on petroleum exploration and general geological information on the hydrocarbon prospectivity of the Sydney Basin, and specific information on the petroleum potential of the three parcels offered in Call for Bids NL06-2.

Figure 1. Atlantic Canada offshore basin map. Mesozoic basins are labelled in red, Paleozoic basins are labelled in blue (bathymetry map from NRCan). The Sydney Basin is located between Newfoundland and Nova Scotia. On land petroleum exploration and coal mining as well as offshore oil drilling has taken place on the Nova Scotia side of the Sydney Basin. Coal bed methane drilling is presently ongoing in several Cape Breton and Cumberland regions rich in Carboniferous coals. However, since the early seventies there has been no exploration undertaken on the Newfoundland side of the Sydney Basin and this area has never been drilled, thus making it a true petroleum Frontier region.


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2. Exploration and Development Background Despite an early exploration phase (in the 1960s and 70s) that included regional potential field mapping and seismic acquisition, it is fair to say that exploration in the Sydney Basin is still at an early stage. For more than 25 years, much of the Sydney Basin and the adjacent Laurentian Basin (Figures 1, 2 and 3) were off limits to exploration due to an international boundary dispute between Canada and France (the nearby islands of St. Pierre and Miquelon are French territory). The resolution of the international boundary opened the door for defining the provincial boundary between the provinces of Newfoundland & Labrador (NL) and Nova Scotia. With the boundary questions settled, this is the first time that lands on the NL side of the border are being offered in a landsale. With the minimal exploration that has occurred, particularly on the NL side, the geology of Sydney Basin is not well documented or understood, especially when compared to producing areas such as the Grand Banks or Scotian Shelf. The following sections will discuss within a provincial, regional and international context, the setting and history of petroleum exploration for the Sydney Basin (Figures 1 and 2). 2.1. Newfoundland and Labrador Petroleum Production To date three large fields, Hibernia, Terra Nova and White Rose, have been developed offshore Newfoundland and Labrador. They are all located in the Jeanne d’Arc Basin which lies to the east of the island of Newfoundland. These fields typically produce from 300,000 to 350,000 barrels per day of light crude from Mesozoic sandstones, and are the only producing offshore oilfields on the Atlantic coast of North America. Production is expected to reach 400,000 bopd by the end of 2006. A fourth development, the Hebron-Ben Nevis field (731 million barrels recoverable reserves/resources) is expected to be developed sometime in the future, pending agreement between the partners in the field and the NL Government. A number of smaller fields may also be brought on as satellite developments to the main producing areas. The Jeanne d’Arc Basin is only one of the many Mesozoic basins and sub-basins located in Atlantic Canada (Enachescu and Fagan, 2005; Enachescu, 2006 and Figures 1 and 2). More than 10 tcf of technically recoverable natural gas has been discovered in the Jeanne d’Arc Basin and Hopedale Basin (Labrador Sea), but to date only oil developments have occurred in the Province. The oil is being delivered by tanker to markets in eastern North America and the solution gas produced with the oil (approximately 350 mmcf/d) is being re-injected. However, given the tightening supply demand balance in the North American gas markets the stakeholders in NL gas are already investigating the commercial and technical aspects of natural gas development from NL waters. Except for the rapidly declining Sable Project on the Scotian Shelf and the yet to be developed Deep Panuke field there are no other offshore sources of gas on the Atlantic coast of Canada. The McCully development onshore New Brunswick which is expected to reach 25 mmcf/d by year end is bringing greater attention to the petroleum potential of the Atlantic Canada Paleozoic basins - including the Sydney Basin. Petroleum exploration in the Appalachian fold belt, Paleozoic foreland and intra-orogenic basins of western Newfoundland has occurred intermittently since the late 1800s. Up to now these efforts have been rewarded by only small or hard to evaluate finds and shows, and there has been only minor commercial production (from the Parsons Pond area) during the early part of the


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twentieth century. Offshore drilling in the area occurred for the first time during the mid 1990s with one well being drilled by a jackup and four wells being directionally drilled from land to nearshore targets. All of these wells were located in the vicinity of the Hunt/Pan Canadian Port au Port #1 discovery (Figures 1 and 2). The Port au Port #1 well was the first ever drilled in western Newfoundland with the benefit of seismic data in choosing the location. Two zones, which are believed to be in communication, tested at rates of about 1500 barrels per day of light oil, with gas rates of about 2.5 mmcf/d. Extended testing showed the pressure to be dropping, and subsequent sidetrack drilling indicated a complex reservoir near the wellbore. A Production Lease was granted for the discovery (renamed the “Garden Hill field”) and recently CIVC and partners have indicated plans for further work (3D seismic, retesting, horizontal drilling). The Sydney Basin encompasses for the most part a large, mostly shallow water, offshore region between Newfoundland and Nova Scotia. Onshore, basin rock exposures are abundant on the east side of Cape Breton Island (Nova Scotia) and to a much lesser extent on the Burin Peninsula (on the south coast of Newfoundland). From a logistics perspective the Sydney Basin is less challenging than the Grand Banks and is closer to North American markets, with easy access to export venues. If gas is discovered, it could be tied into the North American grid by a lateral line to the nearby Maritimes & Northeastern Pipeline which delivers Sable gas to New England and various Atlantic Canada markets. Any significant oil and gas production in the Sydney Basin will also have a rapid and significant impact on the Province’s and region’s economy and is very likely to have the strong support of the government and local population. 2.2. Large Paleozoic Offshore Under-Explored Area The continental margin of Atlantic Canada stretches on for more than three thousand kilometres from Georges Bank at the Canada/United States border to the northern tip of Labrador (Figures 1 and 2). Most of this area is underlain by Mesozoic aged sedimentary basins (Figures 1 to 3). Some of these basins are incised on Paleozoic pre-rift basement sediments that have been encountered in several exploration wells. For example, the Gudrid and Hopedale wells, offshore Labrador, are large gas discoveries in Paleozoic dolomites lying beneath the Cenozoic/Mesozoic sequences that were targeted in these wells. True Paleozoic offshore basins are located in the Gulf of St. Lawrence area, and also along the north and southwest coast of the island of Newfoundland (Sydney Basin to the south, St. Anthony Basin to the north and Bonavista Platform to the east). Paleozoic successions also form the upper part of the pre-rift basement of the Grand Banks and, as mentioned above, of the Labrador Sea (Figures 1 and 2). A total of 146 exploration wells have been drilled in the 1.6 million km2 offshore NL area, with only 5 of these wells drilled for Paleozoic plays in western Newfoundland. Additionally, about a dozen wells have reached Paleozoic strata, including good quality reservoirs, when drilling for Mesozoic synrift targets in the Grand Banks, Orphan and Labrador basins. Appalachian Paleozoic basins also extend to onshore western Newfoundland and to the northeast offshore into St. Anthony Basin and onward to the northeast beneath the Mesozoic sediments of the Labrador Sea ( Figures 1 to 3 and Enachescu and Fagan, 2005; Fagan and Hicks, 2005; Enachescu, 2006). The Gulf of St. Lawrence excluding all contained islands and the St. Lawrence estuary has a water area of approximately 220,000 km2, or approximately one fourth the size of the Western Canada Basin. The Sydney Basin presents an additional 35,000 km2 of mostly unexplored area. Water depths on average are less than 100 m except within the Laurentian Channel and associated feeder tributaries where depths range from 200 to 535 m.


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Figure 2. Regional map of the Mesozoic and Paleozoic basins of Atlantic Canada including NL land tenure as of summer 2006. Call for Bids NL06-2 parcels are located in the dashed blue area; Landsale Parcels 1 to 3 are shown in red (modified after the GSC, C-NLOPB and Enachescu, 2005).

Geologic mapping and past drilling for hydrocarbons indicate that the Gulf of St. Lawrence is underlain by a thin veneer of glacial sediment covering two adjacent, relatively thick, Paleozoic aged sedimentary basins known as the Maritime (referred to as “Maritimes” in some texts) and Anticosti basins. The Maritime Basin extends onshore in several Provinces and includes the Magdalen Basin (Figures 1 to 4). A high ridge dissected by several strike-slip faults, separates the Magdalen Basin from the Sydney Basin, but these basins have a similar geological history and analogous sedimentary sequences. As noted above, these basins are large and virtually unexplored. The Anticosti Basin (named after Anticosti Island) underlies the northern part of the Gulf and contains sedimentary units ranging in age from Cambrian to Silurian (approximately


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510-415 million years old). The Magdalen Basin (named for the Magdalen Islands), underlies most of the southern part of the Gulf, and contains sedimentary units ranging in age from Pennsylvanian (Late Carboniferous) to Permian (approximately 350-250 million years old). The Sydney Basin is a subdivision of the predominantly Carboniferous Magdalen Basin (Figures 2 and 3). Together, the Anticosti and Magdalen basins cover an area the size of the State of New Mexico or about half of the size of the Canadian Province of Alberta.

The Sydney Basin is well exposed on Cape Breton Island but has only minor onshore outcrops on the south coast of Newfoundland (Figure 3). Only two medium depth wells have been drilled on the Nova Scotia side of the basin and along with available industry seismic data provide the fundamental information on the offshore geology of the basin. Due to its rich coal exploration and production history the onshore Nova Scotia part of the Sydney Basin is well known and described in detail in numerous publications (see reference list).

The most active phase of exploration within NL’s Gulf of St. Lawrence waters took place in the early - mid nineties when several large Exploration Licences were operated by companies such as Hunt Oil, PanCanadian, Talisman, BHP and Mobil. This exploration cycle, which resulted in the drilling of 5 deep wells by the bigger companies and a number of shallower holes by smaller players was focused on Ordovician and Carboniferous rocks of the Anticosti and Deer Lake basins and the Bay St. George sub-basin. No exploration took place within the Sydney Basin.

Although minor oil production was achieved at Parsons Pond in the early 1900s and oil and gas has recently been encountered and tested onshore in the Anticosti Basin, Deer Lake Basin and Bay St. George sub-basin, no oil or gas is currently being commercially produced in western or southern Newfoundland (Fagan and Hicks, 2005; Atkinson, 2005). Nevertheless, hydrocarbons were discovered in Carboniferous rocks in other Atlantic Provinces and gas is presently produced and marketed from the McCully gas field in New Brunswick (Moncton sub-basin) (Figure 4).

It is worth noting that a significant portion of Canada’s light oil and gas output comes from Paleozoic reservoirs, and over 20% of world oil reserves originate in Paleozoic reservoirs. Prolific Carboniferous reservoirs in the Western Canada Basin include the Banff, Pekisko, Shunda, Elkton and Debolt formations, which account for about 15% of the basin’s oil and gas reserves (See: http://www.ags.gov.ab.ca/publications/ATLAS_WWW/A_CH14/CH_14.shtml). Significant Carboniferous production is also obtained from the US Appalachian Foldbelt, Illinois Basin, North Sea, the Netherlands, Vienna Basin, Dnieper-Donets Basin, Ural Foldbelt, Timan-Pechora Basin, Barents Sea, Australia and the Middle East. In the eastern North Atlantic region (offshore Ireland), Carboniferous source rocks have charged the Coribb gas field and have produced shows in several other exploration wells. This area was once part of the same intra-continental marine/lacustrine system as the Atlantic Canada basins prior to the breakup of Pangea.

2.3. Atlantic Canada Exploration History in Paleozoic Basins Exploratory drilling offshore Newfoundland and Labrador began in mid 1960’s, and to date a total of 146 exploration wells have been drilled in twelve Mesozoic and Paleozoic basins. From a frontier exploration point of view, all the basins along the margin can be considered to have hydrocarbon potential. Most of the basins are sparsely drilled, and some have been explored only by reflection seismic and are yet to be drilled, as for example the Sydney Basin (Atkinson and


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Fagan, 2000; Eaton, 2004; Enachescu, 2005, 2006a and b; Enachescu and Hogg, 2005; Fagan and Hicks, 2005; Enachescu and Fagan, 2005a and b). Up to now, large discoveries have been made in two areas - the Hopedale Basin on the Labrador Shelf and Jeanne d’Arc Basin on the Grand Banks, from which about 350,000 bopd is currently being produced. (Enachescu, 2005 and 2006a and b; Enachescu and Fagan, 2004 and 2005a and b; Enachescu, 2006 and www.nr.gov.nl.ca/mines&en/call_for_bids/nl06_1.pdf; Figures 1 and 2). Exploration activity has been focussed primarily on the Mesozoic basins, several of which have proven petroleum systems, involving: a prolific Late Jurassic source rock, high quality Late Jurassic to Tertiary sandstone reservoirs and a multitude of structural, stratigraphic and combination traps; all of which owe their development to a Wilson Cycle commencing 200 million years ago with the intra-continental rifting of Pangea.

Figure 3. Regional geology map of the Gulf of St. Lawrence and environs (modified from GSC), showing Atlantic Canada’s Paleozoic fold belt and associated basins. The Carboniferous hydrocarbon fields MC=McCully, SC=Stoney Creek and shows EP=East Point E-49, CP=Cape Breton seeps and shows, FB=Flat Bay wells that intersected tight oil zone and WA=West Adventure #1 gas flow, are indicated by stars. Also shown are offshore Paleozoic and Mesozoic basins, active ELs (awarded by C-NSOPB) and Call for Bids NL06-2 parcels (made by C-NLOPB) in the Carboniferous Sydney Basin between Newfoundland and Nova Scotia. However, earlier in their geological history, the Atlantic Provinces including Newfoundland and Labrador were affected by an older Wilson cycle that was initiated during Early Paleozoic and


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culminated with the build up of the Appalachian fold belt and its corresponding foredeep, extending from the southern US into the western Newfoundland onshore and offshore areas. This cycle ended with the Alleghenian Orogeny which was accompanied by the formation of several Carboniferous successor basins - the largest being the Maritime Basin. Significant volumes of source and reservoir rock were accumulated during this Paleozoic cycle of ocean opening and closing (Figure 3). Oil and gas exploration occurred intermittently for more than 100 years within the Appalachian basins of the Atlantic Provinces. It began on land in the 1860s and extended to the offshore Gulf of St. Lawrence in the 1960s. The Appalachian fold belt and its foredeep areas have, for more than a century and a half, been a region of intensive oil and gas exploration in the United States where they have yielded discoveries in classic petroleum basins such as the Delaware, Midland, Anadarko, Michigan, Illinois, Ohio etc. – all of which are located along the ancient Cambro-Ordovician paleo-shoreline. The Anticosti and Magdalen basins that extend into NL provincial waters and also into several smaller Paleozoic basins on land within the Humber Zone, are recognized to have petroleum potential by the widespread occurrence of surface oil seeps and frequent oil and gas shows in water wells, outcrops, mineral and coal exploration wells and petroleum exploration wells. Ordovician and Carboniferous carbonate and sandstone plays have been the primary targets in these areas. Very large accumulations have been recorded in similar aged rock and lithology within the Ellenburger and Arbuckle groups of the southern United States. An historic account of exploration in the Paleozoic basins of Atlantic Canada emphasising Cambro-Ordovician plays of the Anticosti Basin and Carboniferous plays of the Bay St. George sub-basin is contained in the Call for Bids NL06-3 report (www.gov.nl.ca/mines&en/call_for_bids/nl06_3.pdf) and within earlier reports by Fagan and Hicks (2005) and Atkinson and Fagan (2000) available from the http://www.nr.gov.nl.ca/mines&en/ Petroleum exploration for Carboniferous reservoirs in the Canadian Maritime Provinces southwest of Newfoundland started in the early to mid nineteenth century. A brief history of exploration emphasizing Carboniferous targeted basins is given below. New Brunswick. About 250 wells (generally under 1,000 m deep) were drilled specifically for hydrocarbons (Figures 3 and 4). Only two dozen wells were deeper than 2,000 m. The Stoney Creek field is the largest oil field onshore Atlantic Canada and one of the oldest in the country. It has produced approximately 800,000 bbl of oil and 28.7 billion cubic feet of gas from 1909 to 1991 (Figures 4 to 6). The reservoir is approximately 900 m deep and averages 33 m in thickness. Reservoir quality is excellent with porosity averaging 18% and permeability averaging 160 md. To date, less than 5% of the original oil in place has been recovered. Additional gas reserves may also be proven. Contact Exploration (of Calgary) recently acquired the petroleum rights for the field and began applying modern exploration/development methods (including 3D seismic, reservoir modelling and horizontal drilling) to go after the bypassed pay (after Contact Exploration August 2006 press release).


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Figure 4. Regional geology map of the Paleozoic basins of Nova Scotia, New Brunswick and Quebec including the locations of the Carboniferous producing Stoney Creek oil field, McCully gas field and Devonian producing Galt gas field (after the Fyffe and St. Peter, 2006). In 2000, Corridor Resources made a significant gas discovery, within the Carboniferous Moncton sub-basin (Figure 4). The McCully field is currently producing about 2 mmcf/d from an Early Carboniferous reservoir at approximately 2 km depth (Figures 5, 7 and 8). The produced gas is being consumed in the local market. Several successful wells with tests between 1.0 and 5.7 mmcfd were added during 2005 and a connection to the Maritimes & Northeast Pipeline is envisaged in the near term. The field has been mapped by 2D and 3D seismic and is interpreted to be contained in a large faulted anticline covering over 11,400 ha, with four way closure. Production is from a series of sandstones, each several metres thick (Figures 4, 5, 7 and 8) within a 500 metre gross gas column (Durling and Martel, 2004; Keigley and St Peter, 2006). Both the Stoney Creek and McCully fields have the same source rock (Frederick Brook Mbr.) and reservoir sandstone (Hiram Brook Mbr) within the Albert Formation of the Horton Group (Lower Carboniferous). The sealing rocks are Upper Carboniferous shales and siltstones (Figures 4 to 8). Presently 250,000 hectares are permitted in New Brunswick to various junior companies for oil and gas exploration. The Carboniferous production from McCully field and the eventual rejuvenation of the Stoney Creek field, are very encouraging for the Paleozoic play in Atlantic Canada – including the Carboniferous basins of western Newfoundland. Several large Carboniferous leads and prospects mapped by Corridor Resources (e.g. Old Harry and West Cape Breton prospects) have also been identified within the Gulf of St. Lawrence http://www.corridor.ns.ca/properties/old_harry/index.xml).


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Figure 5. Generalized stratigraphic chart, for the Late Paleozoic onshore sub-basins of New Brunswick including the Carboniferous Stoney Creek oil field and McCully gas field (Fyffe and St. Peter, 2006). With small modifications to recognize localized stratigraphy this chart can be applied to the Carboniferous throughout Atlantic Canada.

Figure 6. Geological cross-section of the Stoney Creek oil field, New Brunswick (after the Fyffe and St. Peter, 2006). Oil was produced from the Hiram Brook sandstone member of the Albert Formation.


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Figure 7. Geological cross-section of the McCully oil field, New Brunswick (after Fyffe and St. Peter, 2006). Gas is produced from the Hiram Brook sandstone member of the Albert Formation (Horton Group).

Figure 8. 3D seismic section across the McCully oil field (dip direction), New Brunswick showing gas sands within the Horton Group (after Martel and Durling, 2006 and Corridor website). Prince Edward Island. The East Point E-49 well was drilled off the eastern shore of PEI in 1974 and tested gas at a rate of 5 MMcfd from Pictou Group sandstones. The offset E-47 exploratory well drilled in 1980 to a depth of 2662 m did not encounter hydrocarbons (Figures 3 and 9). The continental origin of the sediments underlying Prince Edward Islands suggests that the region should be considered mostly a natural gas prone area. Green Gables #2 was drilled within the Mabou Group to a total depth of 2293 meters in 1997 by Corridor Resources. The well encountered natural gas in several intervals during drilling and two of these intervals were tested, but flow rates were not considered to be commercial. Presently the well is listed as suspended with plans for re-entry for possible reservoir stimulation.


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Figure 9. Geological cross-correlation of Carboniferous formations and unconformities from onshore and offshore exploration wells of Prince Edward Island and Gulf of St. Lawrence, (from Lavoie, 2006, modified from Giles and Uttig, website poster). Section is tied to a Late Carboniferous surface. East Point F-47 and Green Gable No 1 wells are indicated. Location of wells and a simplified stratigraphic chart are shown at the bottom of the illustration. Annotations are hwu=Horton/Windsor unconformity and mpu=Missisipian/Pennsylvanian unconformity. Prince Edward Island is characterized by structural traps within the Pictou Group which result from folding, faulting or a combination of the two. Traps are commonly associated with salt domes (Windsor salt) and compressional anticlines relating to transcurrent movements on a network of regional faults. Nova Scotia. Several large Gulf of St. Lawrence seismic programs acquired in the 1970s and early 1980s by companies such as Mobil, Chevron, Texaco, Hudson’s Bay Oil and Gas, Shell, Petro-Canada, etc., culminated with the drilling of ten Paleozoic offshore wells, one of which (East Point E-49, drilled in 1970), flow tested at 5 mmcfd of natural gas (Figures 4 and 9) from Carboniferous sands (Pictou Group). This well was drilled midway between Cape Breton Island and Prince Edward Island, but as previously mentioned, the E-47 delineation well failed to encounter the gas reservoir. The discovery is estimated to contain an in-place gas resource of 77 billion cubic feet.


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Figure 10. Geological setting of the Sydney Basin and environs (modified after Pascucci et al., 2000), with locations of the North Sydney F-24 and P-05, East Point E-49, St. Paul P-91 and Hermine E-94 wells, active ELs and Parcels 1, 2 and 3. Main tectonic lineaments and various terranes are also shown. Noteworthy notations are: A=Avalon; C=Central; G=Grenville basement terranes; HF=Hollow fault; AF=Aspy Fault; LRF=Long Range Fault; CCF=Cobequid-Chedabucto Fault; CRF=Cape Ray Fault; LRF=Long Range Fault; V=Volcanic rocks; S and T=Carboniferous outcrops in Burin Peninsula. Two offshore wells (Murphy et al. North Sydney P-05 and Shell et al. North Sydney F-24) were drilled in the 1970s in the Nova Scotia (NS) side of the Sydney Basin (Figure 10). These wells tested a large, seismically defined antiform and encountered gas shows in low porosity/permeability Upper Carboniferous sandstones. The stratigraphically lower Horton and Windsor Group sandstones, which according to Kendell and Harvey (2006) should have better reservoir properties remain untested in the basin (Figure 4 and 10). These wells and their relevance to the prospectivity of the Sydney Basin will be discussed in the next section. Newfoundland and Labrador. The offshore Sydney Basin was actively explored by Texaco Canada in the late 1960s to mid 1970s, when several seismic grids were collected within a large area stretching from the east Magdalen Basin, Canso Strait and into the Sydney Basin, where the company held large exploration blocks. About two dozen seismic anomalies representing various types of leads were mapped on about 8000 km of regional (10 by 10 mile grid) along with some denser 2D seismic grids. Texaco estimated an 11 tcf natural gas resource for its licences, which were located mostly on the Newfoundland side of the basin, but did not drill an exploration well. No follow-up exploration has occurred since that time.


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In addition to the Cambrian-Ordovician plays in western Newfoundland (discussed in detail in a sister report (www.gov.nl.ca/mines&en/call_for_bids/nl06_3.pdf), numerous oil and gas shows have also been encountered in the Carboniferous rocks of the Deer Lake Basin and Bay St. George sub-basin. The Deer Lake Basin (Figures 2 and 4) is an inverted Paleozoic rift basin where the plays involve rotated and inverted blocks containing porous and permeable Carboniferous North Brook sandstone (Figure 11) and possibly deeper dolomitized Ordovician carbonates.

Figure 11. Cores of porous and permeable North Brook fluvial sandstones (Carboniferous) from a well in the Deer Lake Basin, West Newfoundland. The source rocks in Deer Lake Basin are Mississippian lacustrine shales and dolostones of the Forty Five Brook and Rocky Brook Formations. Two modern wells (Western Adventure #1 and #2) were recently drilled by Deer Lake Oil and Gas (DLOG) in this basin. Western Adventure #1, drilled in 2000, flow tested 100,000 cu ft of gas per day with some condensate from several sandstone units within the North Brook Formation (Figure 4, 11 and http://www.deerlakeoilandgas.com/npei.pps). Vulcan Minerals of St. John’s has drilled seven shallow wells (less than 1,000 m) in the onshore portion of the Bay St. George sub-basin in order to test large structural features mapped on seismic data (http://www.vulcanminerals.ca/properties/onshore.html). Most of the action thus far has been towards the north where crude oil was encountered at shallow depths beneath a gypsum quarry in the Flat Bay area, and natural gas was discovered and flared as part of the same mining operation approximately 50 years ago (Figure 4). In the same area, Vulcan has encountered a thick oil zone in a shallow low permeability reservoir (Carboniferous Anguille conglomeratic sandstone) in several wells. The oil zone is up to 150 m thick, with the top as shallow as 50 m. The oil is light (34o API) and sweet from a lacustrine source rock. New seismic lines and high resolution aeromag data collected during 2005-2006 in the Bay St. George sub-basin, has allowed the identification of several large structural closures. Two to three wells are to be drilled to intermediate depth (approximately 1,000 m) during 2006 and additional seismic data acquisition is planned to better define some of the deeper leads (http://www.vulcanminerals.ca/images/VulcanMineralsWesternNewfoundlandProspects.pdf).


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The relatively active offshore exploration cycle within the Maritime Basin (Gulf of St. Lawrence and Sydney Basin) that took place during the 1970s ended with the oil price collapse of 1982. Since then, only small seismic programs in the Gulf region (eg., Corridor Resources) and Sydney Basin (eg., Hunt Oil) have helped define several large leads and prospects; for instance the Old Harry structure and West Cape Breton prospects currently held by Corridor Resources: http://www.corridor.ns.ca/properties/old_harry/index.xml. No seismic acquisition has occurred on the NL side of the Sydney Basin since the 1970s. Past exploration activity in the basin has consisted of the collection of approximately 6464 line km of 2D seismic data, with the most recent seismic program undertaken in 1973. As previously stated, no drilling has occurred on the Newfoundland side of the basin. Due to its spread over two jurisdictions, a downturn in offshore exploration drilling and a lengthy exploration moratorium no basin-wide seismic maps or detailed basinal geologic study has ever been published for the entire Sydney Basin. 2.4. Recent Sydney Basin Landsale Results Offshore Newfoundland and Labrador exploration areas are licensed by the C-NLOPB to the party submitting the highest bid in the form of work commitments, which are secured by a refundable deposit equal to 25% of bid amount (http://www.cnlopb.nl.ca/). The minimum bid for all parcels in the Sydney Basin is $1,000,000 (approximately US $900,000) per parcel. There were no Exploration Licenses awarded on the Newfoundland side of the Sydney Basin during the past three decades. As noted above the last exploration was undertaken by Texaco Canada, who relinquished most of its acreage in 1975, and no new marine seismic data has been acquired on the Newfoundland side of the Sydney Basin since 1974. For reasons stated earlier this is the first Call for Bids in the area in thirty years. In 1998, Hunt Oil licensed two large blocks EL 2364 (225,406 ha) and EL 2365 (244,315 ha) from the Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB) (Figures 4, 10 and 11). These blocks are located within the Sydney Basin in water depths ranging from 90 to 360 metres. Work commitments for each of these two ELs was $2,165,000 suggesting that initial exploration efforts would be directed towards geological studies and seismic acquisition. Due to delays in receiving approvals for seismic programs on account of environmental concerns raised by residents (mostly from Cape Breton) the 2 D seismic was not acquired until the year 2005 and this data has only recently been interpreted. On the western side of Cape Breton Island, within the neighbouring Carboniferous Magdalen Basin, Corridor Resources owns 100% of EL 2368 (247,020 ha) situated just 8 km from the East Point E-49 gas discovery. Seismic data has been acquired, processed and interpreted over this block and a prospect is drill-ready in a water depth of 60 m - pending rig availability and finding a partner (http://www.corridor.ns.ca/properties/west_cape_breton/index.xml). On Cape Breton Island several Exploration Permits for conventional resources and/or coal bed methane were awarded recently by the Nova Scotia Government in the Cumberland region of the onshore Sydney Basin. Just South of Sydney Basin, within the Newfoundland and Labrador jurisdiction a total of 2.25 million hectares (2,372,212 acres) are held under seven Exploration Licences in the Laurentian Basin by ConocoPhillips and its partners. Imperial Oil has a deepwater EL with an area of 194,800 ha (Figure 12). These 8 licences were awarded in 2004 and it is expected that a well will


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be drilled in one of the ConocoPhillips operated ELs during the 2007-2008 time frame. In the Laurentian Basin, Tertiary and Mesozoic sedimentary infill is thick and penetration of Carboniferous rocks which might form the basins pre-rift basement is not expected in any well that may be planned.

Figure 12. Land map off South Newfoundland showing current Exploration Licences in the Laurentian and South Whale Basins (Mesozoic play) and the Call for Bids NL06-2 Parcels 1, 2 and 3 in the Sydney Basin (modified after C-NLOPB). Also shown is Hermine E-94 well that intersected Carboniferous formations and the most recent exploration wells drilled in South Newfoundland Mesozoic basins: Lewis Hill G-85 and Bandol #1 (French territorial water) .

3. Regional Geology of the Sydney Basin

The large Maritime Basin extends between the provinces of Nova Scotia, New Brunswick, Prince Edward Island, Quebec and Newfoundland and Labrador and includes the Magdalen Basin and the Sydney Basin (Figures 1 to 4 and 10). All this area is occupied by a predominantly non-marine successor basin that developed between the Late Devonian-Early Permian on Hadrynian-Devonian basement (Pascucci et al., 2000). The Sydney Basin was formed during three orogenic phases: 1). Taconic (late Mid-Ordovician), 2). Salinic (late Silurian), and 3). Acadian (Devonian). These phases were associated with docking and thrusting of several microplates to the Laurentia continental margin. The Acadian orogeny resulted in raising of the Appalachian Mountains along the eastern margin of the North American continent. A fourth orogenic phase (the Alleghenian) during the Carboniferous was manifested by both transtension and transpression, and completed the formation of the supercontinent of Pangea - including the islands of Newfoundland and Cape Breton and the Paleozoic Basin separating them. Erosion, which lasted from Late Paleozoic to Tertiary almost peneplained the Appalachian Mountains. A regional uplift during the Tertiary, probably related to the readjustment of plate movements during Atlantic Ocean opening and selective erosion (including glaciations) shaped the mountain chains and hills now forming the Cape Breton and


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southwestern Newfoundland landscape. Between both islands, erosion and subsidence lowered the Sydney Basin to as much as 500m below the sea level (Figures 13).

Figure 13. Land topography and bathymetry of the Atlantic Provinces (East Coast Canada) showing main physiographic units and location of the Sydney Basin (modified after NRCan and the Canadian Hydrographic Service). CS=Cabot Strait; MI=Magdalen Island; SR=Scatarie Ridge; SI=Sable Island; BP=Burin Platform; SPM=St. Pierre&Miquelon (France). 3.1. Location The Sydney Basin is a Carboniferous successor basin situated east of the Cabot Strait in waters shallower than 450 m. The basin covers a large offshore area (35,000 km2) south of the Newfoundland coastline and has a well exposed outcrop belt on Cape Breton Island (NS) (Figures 3, 10 and 13). The basin extends under the Laurentian Channel and Burin Platform bathymetric features. Its western limit is a complex series of regional faults extending major onshore lineaments into the Cabot Strait and separating it from the Magdalen basin (Langdon and Hall, 1994). In this report the westernmost limit is considered the Hollow Fault (HF in Figure 10) and therefore it includes the Cabot Arch and the St Paul High. Its eastern limit is not well defined as the basin is gradually onlapped by the Mesozoic sediments of the Laurentian Basin. The Hermine E-94 well intersected Carboniferous red beds and Windsor evaporites under Cretaceous sediments (Figure 12). Northward, the basin terminates at the Newfoundland coastline and southward extends onshore into Cape Breton county, while seaward it is bordered by the Proterozoic rocks of the Scatarie Ridge (Pascucci et al, 2000 and Figures 10, 13 and 14). Geologically the basin is sited within the northern part of the Paleozoic orogenic belts forming


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the Appalachian Mountain chain. At the time of its intra-orogenic formation, the Sydney Basin was located in an equatorial climatic environment. The Horton, Windsor and Mabou strata outcrop along the Eastern Cape Breton Highlands, where a Horton half-graben has been documented (Hamblin and Rust 1989). Near Ingonish (“I” in Figure 10) the Windsor Group rests on basement rocks, and includes carbonate mounds (van der Gaag et al., 1996). Carboniferous strata, including Windsor diapirs, occupy fault-bounded basins in the Cabot Strait (Langdon and Hall, 1994). Tournaisian (Horton equivalent) alluvial and lacustrine rocks, including dark shales, are present on the Burin Peninsula (“S” and “T” in Figure 10), where they are overlain unconformably by alluvial (Mabou Group?) strata (Laracy and Hiscott, 1982; Hyde 1995). Coal-bearing Westphalian B-D strata overlie basement rocks in Placentia Bay (King et al. 1986; Miller 1987), and Lower and Upper Carboniferous strata, including Windsor diapirs, underlie the Burin Platform and the eastern Grand Banks (Enachescu 1988; Bell and Howie 1990; MacLean and Wade 1992; Pascucci et al. 1999), possibly within a distinct depocentre (above paragraph modified from Pascucci et al., 2000). 3.2. Basin Overview Pascucci et al. (2000) have interpreted the geological history of this poorly known offshore basin by using an industry seismic grid and the Lithoprobe line 86-5 tied to outcrops, mines and coal drillholes and two offshore wells (N. Sydney F-24 and P-05) located on the Cape Breton side of the basin. The mid Devonian to Upper Carboniferous/Permian basin fill is generally 6-7 km thick but may reach 12 km in its depocenters, and represents three extensional phases with intervening and succeeding compressive phases (Texaco, 1974, Pasccuci et al, 2000). The basin sedimentary fill comprises grey and red sandstone, siltstone, shale and conglomerate, with one interval of marine limestone and evaporite rocks (Durling and Martel, 2004). The basin is saucer-shaped with the deepest part in its central area, but the basin is also characterized by a series of parallel half-grabens and ridges. Some of the ridges and rotated blocks are inverted blocks and deformation is propagated into the Late Carboniferous units. (King and MacLean, 1976; Pasccuci et al, 2000). Major fault lineaments are traceable to the central basin area where correlations are impossible due to lack of data and poor seismic imaging. According to Pascucci et al. (2000) offshore to onshore fault correlations is difficult due to lack of data in the nearshore (transitional) domain. In spite of poor seismic coverage, the potential field linear trend and the existence of Carboniferous rocks in several locations on the Burin Peninsula, indicate that similar half graben/ridge geometry continues on the Newfoundland side of the basin (Figures 10, 14 and 15). The sedimentary rocks were deposited during the Late Devonian to Early Permian in syn-rift, thermal sag and transpressional settings and within an equatorial paleoclimate environment. The deposits were formed in an intra-orogenic setting and are predominantly lacustrine and alluvial deposits but with at least one marine interlude (Windsor evaporites). Coal-bearing strata and hydrocarbon source and reservoir rocks are widespread on land and offshore.


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Figure 14. Regional tectonics map of the Nova Scotia side of the Sydney Basin, locations of the North Sydney F-24 and P-05 wells (modified after Pascucci et al., 2000) and active ELs. A-B is location of the geological cross-section constructed from Lithoprobe Line 86-5 displayed in Figure 15; C-D is the location of seismic line displayed in Figure 18. Lithoprobe seismic line 86-5 crosses the basin from NW to SE, intersecting on the Cape Breton side the basin’s main structural and tectonic elements (Figures 10 and 15). The line was processed for enhancements of both the deep crustal levels and shallow basinal elements that could be tied with the existing industry grid.


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Figure 15. Interpretation of Lithobrobe seismic line 86-5 that crosses the southern part of the Sydney Basin (modified after Marillier et al., 1989 and Pascucci et al., 2000). The line crosses four half-grabens and several fault zones formally named by Pascucci et al. (2000). Location of line is given in Figure 14. The ELs 2364 and 2365 and North Sydney P-05 well position are indicated. A, B and C are main seismic surfaces representing major unconformities. Annotations are: U1=Horton Group and older; U2=Windsor and Mabou groups and U3=Morien and Pictou groups. The interpreted cross-section indicates the presence of four half grabens bounded by syn-rift normal listric faults detaching to a mid crustal zone. The graben fill thins toward the southeast indicating the major direction of extension being NW-SE. Some of the rotated blocks are slightly inverted bending the youngest sedimentary unit U3 and indicating a final transpressional event in the basin. Four seismic megasequences bounded by angular unconformities are interpreted: the Basement and Units 1, 2 and 3. Faults affect mainly the basement, the Horton Group and to a lesser extent the Windsor and Mabou groups. Only reverse faults during transpression affect the U3 unit.

Figure 16. Schematic model of extensional duplex and basin fill applicable to the Sydney Basin structural evolution (modified after Pascucci et al., 2000). Main seismic Markers are: A (pre-rift Unconformity), B (Visean Unconformity) and C (Base Pennsylvanian Unconformity). Other strong seismic amplitude events in the shallow U3 are due to widespread coal seams (see also Figure 17). A simplified model of extensional duplex containing a three-sequence sedimentary fill of the half-graben, which is typical for the architecture of the basin, is given in Figure 16. The same structural-stratigraphic model should apply for the central and northern parts of the basin where Parcels 1 to 3 are located. The interpreted mega sequences correspond respectively to the


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Acadian basement, Horton Group, Windsor and Mabou groups as well as the Morien and Pictou groups. Their age, subdivisions and lithology is described in Figure 17. 3.3. Litho-stratigraphy of Sydney Basin While the main Paleozoic groups have similar names throughout the Maritime Provinces, their sub-divisions (formation and members) have diverse local terminology. For the present report, the litho-stratigraphic sequence compiled by the Nova Scotia Department of Energy (Kendell, pers. comm., 2006) and depicted in Figure 17 will be referenced. To provide further detail, seismic markers and tectonic stages have been added, as well as important stratigraphic intervals for source and reservoir rock.

Figure 17. Generalized Litho-stratigraphic column (stratigraphic chart after Nova Scotia Department of Energy, modified after Kendell, 2006), depicting main seismic markers, reservoir, source intervals and tectonic evolution for the offshore Sydney Basin.


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The geological units found in the Sydney Basin were interpreted from extrapolation of outcrops, mines and wells in Cape Breton and from the two North Sydney petroleum exploration wells. A description of these units after Pascucci et al. (2000) is presented below: The Acadian Basement.

Basement consists of Precambrian and Lower Paleozoic (Hadrynian to early Devonian) rocks belonging to several, fault bounded terranes that had merged prior to and during the mid-Devonian Acadian Orogeny (Figures 3 and 10). At various times, these faulted terrane boundaries which extend from Cape Breton over to Newfoundland have been re-activated as either extensional, compressional or strike-slip mega faults. Devonian/Mississipian rocks (Unit 1 in Figures 16 and 17).

The mid-Devonian McAdams Lake Formation is a syn-rift sequence deposited in half-grabens during initial extension (White and Barr, 1998). Basin fill of alluvial and lacustrine origin is comprised mainly of coarse siliciclastics, organic-rich shales and coal.

The Horton Group occupies fault-bounded basins across Atlantic Canada (Hamblin and Rust, 1989) and similar basins with Horton fill are imaged on Lithoprobe line 86-5 (Marillier et al., 1989 and Figure 15) and industry lines (Figure 18). The Grantmire Formation (Tournaisian) of the Horton Group rests on an angular unconformity and consists mainly of alluvial fan and braided stream conglomerates up to 800 m thick (Giles, 1983). Volcanic rocks of the Fisset Brook Formation underlie the Horton Group in western Cape Breton, while organic-rich shales are prominent at mid-levels within the Horton Group. From seismic data and outcrop measurements, the seismic Unit U1 is estimated to be 3 to 3.5 km thick (Figures 15 to18).

The Windsor Group (Visean) (lower seismic facies in Unit 2 on Figure 16) is up to 1000 m thick, but overall, thickness is highly variable (Boehner, 1986). It overlies the Grantmire Formation with apparent concordance, and oversteps it locally to rest on basement rocks. Basal units comprise carbonate buildups of the Gays River Formation and dark laminated limestone of the Macumber Formation. Overlying strata consists of siliciclastics, carbonates, sulphate evaporites, halite and minor potash salts. The local Kempt Head Formation contains a thick halite section (up to 327 m), although evaporites may not be prominent elsewhere in the basin (Giles, 1983). Overall, there is less salt in the basin if compared to the Magdalen Basin to the west and salt halokinesis is less spectacular than in other Maritime or Grand Banks basins.

The overlying lacustrine Mabou Group (upper seismic facies in Unit 2 on Figure 16) consists of sandstone, siltstone, shale, limestone and sulphate evaporites, with some thick dark shales. Unit 2 reflectors normally occupy synformal areas that onlap Unit 1 and overstep onto Acadian basement rocks. Unit 2 is about 1.1 km thick (Figures 15 to 18). Pennsylvanian/Permian (Unit 3 on Figure 16).

The Morien Group (late Westphalian to Stephanian) is up to 1800 m thick and rests unconformably on the Mabou and Windsor groups. The basal South Bar Formation is at least 860 m thick and consists mainly of braided-fluvial sandstones with minor coal (Rust and Gibling, 1990). The overlying Sydney Mines Formation is about 1000 m thick and consists of sandstone, mudstone, economic coals, dark limestone, and calcrete, deposited in alluvial to restricted marine conditions (Gibling and Bird, 1994; Tandon and Gibling, 1997). It has a distinct seismic signature due to the strongly reflective coal measures (Figures 16 to 18). The Waddens Cove Formation is a local alluvial-redbed equivalent of these two formations.

The Pictou Group (Stephanian to ?Permian) which consists of red mudstone and sandstone underlies the nearshore area and may be 1000 m thick (R.C. Boehner, pers. comm., 1999). Unit 3 is bounded by an angular unconformity C, oversteps the other units and may rest


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directly on the basement. The unit blankets the entire Sydney Basin and can be up to 1.8 km thick in the central part of the saucer-shaped basin. A top Westphalian unconformity between Morien and Pictou groups was recognized by Langdon and Hall (1994) in the Cabot Strait. They suggested that this unconformity (named Barachois Unconformity) may extend throughout the Sydney Basin. Permian to Quaternary rocks

Pascucci et al. (2000) considered that post-Carboniferous sediments may be present in parts of the basin. These strata are poorly known in the Sydney Basin but are present elsewhere in the region. According to van de Poll et al. (1995), Lower Permian rocks underlie the Gulf of St. Lawrence. In the U.S. Appalachians, Permian deformation, magmatism and metamorphism related to the convergence of Gondwana and Laurentia between 270 – 290 Ma is prominent. Certain inversion of half grabens and flower structures postdating deposition of Morien and Pictou groups may point toward a post-Carboniferous deformation phase of the Sydney Basin. Cretaceous rocks overlie the Upper Paleozoic section on the Burin Platform (MacLean and Wade, 1992) and the eastern Sydney Basin (Figure 10); while Lower Cretaceous igneous rocks have been dredged from the Scatarie Ridge (V in Figure 10; Jansa et al., 1993). Several industry wells have penetrated Carboniferous rocks in the southern Grand Banks (e.g. Hermine E-94), proving that Late Paleozoic successor basins became platform in Mesozoic time, underwent active rifting in the Late Triassic-Early Jurassic and the newly formed grabens were infilled with Mesozoic sediments. Tectonic activity and erosion relating to the Avalon Uplift affected the southern Grand Banks from the Late Jurassic to the Late Cretaceous (Enachescu, 1987; Grant and McAlpine, 1990), and also during the Mesozoic some Upper Paleozoic faults were reactivated (Enachescu 1987; MacLean and Wade, 1992). Fission-track analysis indicates that the Maritime Basin underwent prolonged exhumation that commenced by the Mid or Upper Triassic, resulting in erosion of several kilometres of the latest Paleozoic to early Mesozoic strata (Hendriks et al., 1993; Grist et al., 1995) (paragraph adapted from Pascucci et al., 2000). Quaternary deposits mostly of glacial origin overlie the older rocks. These deposits are too thin to be correlatable on industry seismic data, without further reprocessing of the data. 3.4. Interpretation of South Sydney Basin Seismic Data The quality of the older public domain seismic data varies from poor to fair. However, reprocessing of some of the lines for the Cape Breton offshore area provides significant resolution improvement. An example of an interpreted line reproduced from Pascucci et al. (2000) is presented in Figure 18 to illustrate once more the area’s structural style and as guide for interpretation of the data in the entire basin – including the data in Parcel 1 to 3. In spite of poor seismic coverage, regional interpretation has allowed Pascucci et al. (2000) to map the main tectonic and structural elements of the southern part of the Sydney Basin (Figure 14). As mentioned before, no basin-wide seismic study exists but Pascucci et al. (2000) and Kendell and Harvey (2006) have completed studies and their conclusions on the offshore and onshore Cape Breton can be applied to the entire basin. The underlying Acadian Basement shows some coherent reflectors probably showing the mid-Devonian and older sedimentary rocks (Cambro-Ordovician?) encountered elsewhere in the Maritime Basin. Most of the NE-SW trending faults offset the Devonian/Mississipian strata but most faults cannot be traced across the base


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Pennsylvanian Unconformity (C or Basal Morien unconformity), which implies that tectonic activity was mid-Carboniferous or older (Figure 14 to 18). The Carboniferous strata dip gently, typically at 5-20o toward the half-graben bounding faults. Movement of Windsor salt has resulted in mild diapirism, mostly toward the northeastern Newfoundland side of the basin. In this area, seismic data however is poor, thus affecting image quality. The Morien Group is slightly disturbed showing wide synclines and broad transpressional anticlines oriented northeast to eastward ((Figure 14 to 18). Some synclines were paleotopographic lows formed during Morien Group deposition, suggesting modest Late Carboniferous fault movement and/or compactional draping over the faulted blocks (paragraph modified from Pascucci et al., 2000).

Figure 18. Interpretation of dip seismic line C-D from the southern part of the Sydney Basin (modified after Pascucci et al., 2000, their Fig. 12). The line crosses two half-grabens and the North Sydney ridge where industry exploration wells were drilled. Location of wells and C-D line is given in Figure 14. Annotations are the same with those in Figures 15 and 16. More recently, 1800 km of regional industry data acquired from 1981 and 1983 in the southern part of the Sydney basin by Petro-Canada and partners has been reprocessed by NSDE, in order to better understand the offshore part of this basin – which is much better known on land from mining, mineral and petroleum prospecting and drilling. A cooperative study between the Nova Scotia Department of Energy and C-NSOPB has resulted in the re-interpretation of the reprocessed data and careful correlation to the three, nearby offshore wells: St Paul P-91, North Sydney F-24 and North Sydney P-05 (Kendell and Harvey, 2006; Kendell, 2006). No attempts were made to extend this study over to the Newfoundland side of the basin.


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3.5. Basin Evolution Geological evolution for the Sydney Basin is summarized using information from many sources, but the work of Marillier et al. (1989), Langdon and Hall (1994), Pascucci et al. (2000) and Kendell and Harvey (2006) on the Nova Scotia part of the basin has been essential. The following 8 evolutionary stages outlining this geological evolution are graphically depicted in Figure 19 (modified after Pascucci et al., 2000):

Figure 19. Geological evolution of the Sydney Basin illustrated by the Frames A (Early to Mid Carboniferous), B (Mid Carboniferous to Permian?) and C (Late Permian to Cenozoic), (modified after Pascucci et al., 2003). Major evolutionary events 1 to 8 are explained in text.


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1. Peneplaining of the Acadian fold belt (pre-rift Unconformity A) and formation of extensional half grabens filled with Mississippian Horton Group. The basal Horton Group could be Late Devonian and older deposits (McAdams Lake Formation or equivalent) may exist in deeper grabens. The new extensional area becomes a successor basin to Acadian Orogeny.

2. Erosion and/or nondeposition at the post-rift Unconformity B followed by thermal subsidence when Windsor/Mabou groups are deposited over the entire extended area including the ridges and rift shoulders.

3. Fault rejuvenation in mid-Carboniferous due to the Alleghenian orogenic phase. 4. Mild basin inversion and erosion forming Base Pennsylvanian Unconformity C. 5. Regional subsidence and deposition of the Morien/Pictou groups in a large lacustrine

basin. 6. Transpressional activity (Permian?) including reactivation of graben bounding faults and

deeper crustal fault zones to form flower structures and compressional anticlines. 7. Regional exhumation of the basin due to Pangea rifting lasting from Late Triassic to

Early Cretaceous (Sydney Basin was part of the Scotian Shelf-South Grand Banks rift shoulder and was also close to the Newfoundland Transfer Zone).

8. Late Cretaceous-Tertiary subsidence and sedimentation along the ancient St. Lawrence Channel and its levies followed by late exhumation and erosion. Recent marine incursion and deposition of glacial beds.

3.6. Offshore Well Results

Figure 20. Interpreted seismic section crossing the North Sydney High where the two industry wells N. Sydney P-05 and F-24 were located (Hunt Oil reprocessed Petro-Canada section, presented by Kendell and Harvey, 2006).


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Three industry wells were drilled on the offshore Cape Breton side of the Sydney Basin during the seventies. The North Sydney P-05 well (Murphy Oil Company, 1974; Barss et al., 1979) and North Sydney F-24 well (Shell Canada Resources Limited, 1976; Dolby and LaBorde, 1976) were located on a basement high identified from seismic mapping (Figures 10, 14, 15, 20 and 21). The medium depth wells (1,700 m) TDed in upper Windsor Group, missing the syn-extensional basin fill where according to Kendell and Harvey (2006) rich source and quality reservoir rocks may be present (Figure 20).

Figure 21. Lithological columns, sonic logs and main stratigraphic sequences in North Sydney F-24 and P-05 wells, drilled by Industry in Sydney Basin (modified after GSC and Pascucci et al., 2000).


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The N. Sydney P-05 well (Figures 10, 14, 15, 20 and 21) penetrated a Westphalian B/C to Stephanian section of Pictou Group red beds underlain by 740 m of the coal-bearing Morien Group. A prominent unconformity (seismic marker C) separates the Morien Group from 170 m of underlying red to grey shale, siltstone, sandstone and limestone of the Mabou Group (late Visean to early Namurian). The thickness of these strata is comparable with that of the Mabou Group onshore. The basal conglomerate with minor carbonate is 120 m thick and remains undated but probably belongs to the Windsor Group. The F-24 well shows a similar succession (Figure 21), although the basal strata are sandstones rather than conglomerates (Pascucci et al., 2000; Kendell and Harvey, 2006). Several thick sandstone zones were intersected in the wells but only poor porosities and permeabilities were encountered in the drilled section (Figure 21). Tectonic and depositional environment modeling for both Windsor and Horton Group clastics suggests better reservoir elsewhere in the Sydney Basin (Kendell and Harvey, 2006). The two wells are essential for any seismic mapping in the basin, providing both stratigraphic ties and velocity information used for depth conversion and estimation of formation thickness. Two other wells are significant for the basin. The Birch Grove No. 1 well was drilled in 1968 by Murphy in southeastern Cape Breton Island (Sydney Basin) to a depth of 1,344 metres. The well penetrated the Morien Group (equivalent to Cumberland Group) and Horton Group. There were no significant petroleum shows encountered in this well. The St. Paul P-91 well drilled by Petro Canada et al., in 1983 to a depth of 2885 m, targeted a plunging, fault bounded ridge structure located between and defining the boundary between the Magdalen and Sydney Basins. The well encountered post-Carboniferous formations, then Mabou and Windsor groups and TDed immediately after intersecting Horton Group beds. Both wells were dry and abandoned. 4. Petroleum Geology of the Sydney Basin This section is written following accounts by Kendell and Harvey (2006), Kendell (2006, pers. comm.), Mukhopadhyay et al., (2002 and 2004); Pascucci et al., (2000); Fowler et al. (1995), and reviewing other petroleum geology documents on the area available from NSDE and NLDNR. Systematic geochemical investigations and regional geological studies performed mostly on the Nova Scotia side of the basin have shown that for the Sydney Basin all prerequisites for viable hydrocarbon systems are clearly satisfied. Nevertheless this basin and particularly its NL side, is mostly unexplored and contains “high risk-high reward” frontier type plays. Some seventy oil and gas shows or stains have been found in Carboniferous reservoirs located onshore Nova Scotia. Both North Sydney F-24 and P-05 offshore wells had several gas shows. These seep and gas shows encountered at various levels in the basin indicate the presence of a working petroleum system in the area. 4.1. Source Rock Several Carboniferous intervals with medium to rich source rocks have been recognized from drilling and outcrop sampling. According to Pascucci et al. (2000) and Mukhopadhyay et al. (2002 and 2004) the Carboniferous sediments onshore Sydney Basin and environs contain various active and mature oil and gas-prone source rocks that include (Figure 17):


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1.) McAdams Lake Formation (late Devonian) lacustrine and alluvial shales (both oil and gas prone); 2.) Horton Group (mainly Tournaisian) lacustrine (oil-prone) and fluvio-deltaic shales (gas-prone); 3.) Windsor Group (Visean) marine shale (oil-prone) and carbonates (oil & gas prone); 4.) Mabou Group (late Viséan – early Namurian) fluviodeltaic shales (gas prone), and 5.) Cumberland/Morien Group (Wesphalian A through C) lacustrine (oil prone) and fluviodeltaic shale, widespread coal (oil & gas prone), and coaly shales.

The major oil-prone source rocks in Carboniferous onshore Atlantic Canada are relatively thin and restricted while the gas-prone sources are thicker and dominant in most basins. As proven by the McCully field in NB (1 tcf), this system has produced at least one large scale gas accumulation. Moreover, source rocks, especially oil prone lacustrine types may thicken in the large half-grabens identified on seismic data in the offshore Sydney Basin. Fingerprinting of oil stained sandstones from the North Sydney F-24 well (Mabou Group) suggests the presence of both terrestrial and marine source rocks (Mukhopadhyay et al., 2004). Maturity profiles of Carboniferous source rock in the Windsor, Mabou, and Cumberland Groups suggest that these sedimentary units are within the "oil window" in most areas of onshore Nova Scotia (Mukhopadhyay et al. (2002), a conclusion that can be logically extrapolated to similar offshore sequences. 4.2. Reservoir Rock Reservoirs rocks in Sydney Basin are predominantly sandstone that range in facies from lacustrine shoreface to channel fill and alluvial fans. Good to fair reservoirs can be encountered in the below listed Late Devonian to latest Carboniferous stratigraphic intervals (Figure 17):

1. McAdams Lake Formation and Horton Group alluvial fans, sandstones and conglomerates. 2. Morien Group (South Bar and Sydney Mines Fm). 3. Multi-stacked sands within the Cumberland and Pictou Groups.

Windsor Group carbonates, although thin, are widespread and exhibit good porosities in onshore exposures in Cape Breton and within reefal build-ups observed in outcrop in western Newfoundland, mainland Nova Scotia and New Brunswick. 4.3. Seals Finding good seals should not be a problem in the Sydney Basin as the Carboniferous succession contains a number of tight shales and carbonates. Additionally the Windsor evaporites may form a regional seal for the syn-rift McAdams Lake Formation, Horton and Windsor Group reservoirs (Figure 17). Thick mudrock intervals are seen in the Mabou and Morien groups - which provided the seal for the East Point gas accumulation. Interbedded shale within the coaly Cumberland/Morien Group can also provide a very effective seal for gas generated within the same succession.


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4.4. Hydrocarbon traps The plays that have been drilled or traditionally prospected in the southern part of the Sydney Basin are transpressional anticlines (e.g. Figures 15 and 20). However a variety of stratigraphic and structural plays are possible including inversion along half graben bounding faults, or large anticlines relating to wrenching along older steeply dipping Acadian faults during the Alleghenian Orogeny or in Early Permian. The observed antiforms are usually elongated and aligned in NNE-SSW direction and they may or may not be faulted. Kendell and Harvey (2006) have described and illustrated on a seismic line (Figure 18) several untested Horton Group plays in the inverted North Sydney structure. Other plays include (see Figure 22 modified from Kendell and Harvey, 2006):

• rotated blocks and multi-fault bounded closures, four way closures and pinchouts within the Horton Group (marked 1 on Figure 22);

• structural and stratigraphic traps within the Windsor Group and within Sydney Mines Formation clastics (marked 2 and 3 on Figure 22) (www.pr-ac.ca/files/Paul_Harvey_&_Kris_Kendell_-_Presentation_5.pdf).

Certain syn-rift traps such as rotated blocks and extensional roll-over anticlines have only become visible with the newer vintages of seismic data or after expert reprocessing of older data. Elimination of multiples has proven to be essential to imaging the Horton Group and McAdams Lake Formation. Although diapirism within the Windsor Group is not as pronounced as in some of the other Carboniferous Basins in the area, it does play an important role in the creation of anticlines in the Sydney Basin. A possible analogue for salt induced structures in the Sydney Basin is the East Point E-49 salt structure drilled in 1970 that tested 5.3 MMcfd from Pictou Group sandstones. This play is illustrated in Figure 23 (modified from Kendall, 2006) which is a segment of Lithoprobe 86-1 line. The seismic data shows a Windsor salt pillow and large salt anticlines above the salt. The Windsor salt has been intersected by five exploration wells east of the Sydney Basin including the adjacent Hermine E-94 (Figure 10). Stratigraphic traps are also widespread in the basin. The most common are: a) onlap of sandstones beds on basement - either on the margins of the basin or against basement highs (e.g. Figure 20); b) unconformity traps such as the example seen in Figures 18 and 20; and c) pinchout of sandstones against the flanks of salt pillows. Some of the seismic sequences also show significant amplitude anomalies. It is worth mentioning that only recently has data reprocessing been effective in preserving the necessary amplitude and frequency range needed for seismic attribute studies and possible reservoir prediction.


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Figure 22. Interpreted seismic section from southern Sydney Basin indicating possible hydrocarbon plays within the Horton Group (1); Windsor Group (2) and Sydney Mines Formation (3), (modified from Kendell and Harvey, 2006).

Figure 23. Interpreted seismic section (segment of Lithoprobe 86-1) over East Point E-49 gas discovery in Magdalen Basin, showing a possible salt structure that may constitute an analogue for Sydney Basin salt induced leads (modified from Kendell, 2006, pers. comm., original from Grant, 1994). See also Figure 3 and map insert for location (blue segment).

4.5. Maturation and Migration In both N. Sydney wells, a rapid increase in vitrinite reflectance from 0.0 to 0.85% is observed between 0 and 1000 m depth. This is followed by very little increase in maturity from 1000 to 1700 m, suggesting that sediments at the bottom of these wells are still within the oil window (Mukhopadhyay et al., 2004). Summarizing older results, Pascucci et al (2000) conclude that maturation levels of Morien Group coals and shales are in the hydrocarbon generation zone as


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are Horton source rocks in Cape Breton. Vitrinite reflectance for strata at the bottom of the P-05 well approaches 1.8% (Cooper et al., 1974), indicating that these sedimentary units are overmature, but it is not known if these values are representative of these sediments throughout the basin. As discussed in section 3, the Sydney Basin has recorded a complex polycyclic tectonic history from late Paleozoic to Cenozoic, whereby extension and inversion have created numerous structural and stratigraphic traps. Subsidence phases in Early Carboniferous, Late Carboniferous and Cretaceous were followed by phases of deformation. Some stratigraphic units as for example McAdams Lake and Horton source rocks may have undergone several burial periods, each of which could have caused hydrocarbon generation. The basin probably reached its maximum burial depth during the early Permian. Cretaceous subsidence and maturation may have been important, and the presence of Cretaceous volcanics on Scatarie Ridge (Figure 1) and other southern Grand Banks wells suggests a local thermal event. Prolonged exhumation of the basin fill commenced in the early Mesozoic or earlier, and has been an important factor in bringing potential reservoirs to relatively shallow depths (Pascucci et al., 2000). 4.6. Petroleum Prospect Risks While large leads and prospects are observed in the Sydney Basin, the preservation of porosity and permeability in Carboniferous reservoirs must be considered a risk factor. However, quality reservoirs have been encountered in numerous localities around the world where Carboniferous rocks have followed a similar multiphase geodynamic evolution. For example, similar sands with analogous reservoir characteristics are excellent producers in northeastern Europe and the North Sea. The possibility must also be recognized, that intervening deformation events could have breached pre-existing reservoirs or, alternatively, created new structural traps for hydrocarbons and generated later accumulations. The complexity of the basin's history will require better seismic data and refining of geological and geochemical models to properly evaluate the hydrocarbon potential of the Sydney Basin. 5. Petroleum Potential of 2006 Call for Bids Parcels 1 to 3 The Call for Bids NL06-2 Parcels 1, 2, 3 covers a total area of 768,768 hectares (1,899,667 acres) within the Newfoundland and Labrador jurisdictional part of the Paleozoic Sydney Basin (Figure 24). The parcels are situated in water depths ranging from 80 to 450 metres (Figures 2, 10 and 23), over an area including the Laurentian Channel and the southwest Newfoundland shelf. No wells have been drilled in these parcels. The closest offshore wells, North Sydney F-24 and P-05 as well as St. Paul P-91 are located approximately 150 km to the west (Figures 10, 14, 15, 18, 20 and 21). These wells have been discussed in previous sections. Other significant exploration wells located near Parcels 1 to 3 are East Point E-49, located offshore East Cape Breton in the coeval Magdalen Basin (Figures 3, 10 and 23 and section 3) and onshore Newfoundland wells drilled in the Bay St. George sub-basin (section 2; Enachescu, 2006 and http://www.nr.gov.nl.ca/mines&en/oil/). The East Point E-49 well tested a significant gas flow from a Late Carboniferous reservoir (Pascucci et al., 2000; Mukopadhyay et al., 2002 and 2004; Kendell and Harvey, 2006; this report).


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More information on the onshore and offshore wells situated in the vicinity of the parcels can be obtained from C-NSOPB (http://www.cnopb.nfnet.com/publicat/other/sch_well/northind.htm), GSC Atlantic East Coast Basin Atlas (http://cgca.rncan.gc.ca/BASIN/DEMO/basin-f-swf.cgi) or from the Government of Nova Scotia Department of Energy (NSDE).

Figure 24. Call for Bids NL06-2 Parcels 1, 2 and 3 located on the Newfoundland and Labrador side of the Sydney Basin. Blue line represents the offshore provincial jurisdictional limit (modified after C-NLOPB). Structurally, Parcels 1 to 3 are located entirely within the Sydney Basin, a Carboniferous intra-montane successor basin, described in detail in section 3. The Carboniferous source rocks are mature throughout the area covered by the three parcels and appear most likely to generate gas. There is also a possibility of oil generation from lacustrine (Horton Group) and marine sources (Windsor Group) (section 4 this report). When Texaco specialists interpreted the available seismic data in the Sydney Basin, they mapped about a dozen large and medium size seismic anomalies of a four-way closure type in the area where the three parcels are located (Texaco, 1974). About half dozen four way closures were also recognized by Pascucci et al. using a scarce grid but their findings were not reported in their paper (Gibling, pers. comm.). These features were either transpressional anticlines formed along major transcurrent faults or salt induced. Several examples of structural traps from the Sydney Basin are shown on Figures 25 to 26. Regrettably, due to the absence of adequate archiving procedures at the time the data was submitted to past regulators, the author could not find a map for precise position of these lines. Therefore these lines should be used only as an indicator for the type of structures that may be found in the area and not to evaluate the landsale.


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Figure 25. NE-SW on strike representative seismic section through the Sydney Basin. A large post carboniferous fault that involves the Acadian Basement is observed. Salt pillows within the Windsor group are also seen. This in an example of a large anticlinal feature present in the basin and which may exist in Parcel 1 to 3. More than 6000 km of late 1960s to early 1970s seismic data is available for interpreting the parcels. Seismic data quality varies from good to poor. These lines were recorded with a short 2400 m streamer and this is detrimental for effectiveness in the multiple elimination routine used at that time and for imaging deeper sedimentary layers. During recording at sea, there was poor navigation control and some lines do not tie properly. The lines were recorded using the different sources available at the time, such as: explosive, marine vibrator, vaporchoke or airguns. The data is 2400% or 4800% and is not migrated. As the water bottom is quite hard in the area and beneath the thin Quaternary deposits there are Carboniferous rocks with high velocities, a large number of lines are severely contaminated by strong multiples (water bottom multiples, peg-legs and reflected refractions type). Most of the area is covered by a 17 by 17 km grid (10 by 10 miles), directed in the dip (NW-SE) and strike (NE-SW) direction. Certain areas have a denser coverage and some have no coverage at all (Figure 25). Some lines are no longer retrievable either from tapes, films or paper copies and only microfiches are available. Unfortunately no data was reprocessed since the initial mid 1970s.


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Figure 26. NW-SE dip representative seismic section through the Sydney Basin. The line shows a large post-Carboniferous reactivated fault that involves the Acadian Basement. An inversion fold is observed on the upthrown block of the fault. Windsor salt may also create pillows. This in another example of a large anticlinal feature present in the basin and which may exist in Parcel 1 to 3.

Only a limited volume of paper copies or tiff files of originally processed lines submitted to the C-NLOPB were available for the evaluation of the Call for Bids NL06-02 parcels. A small selection of the best data available, the K series, acquired by Texaco in 1973 and processed in 1974 was used to show the petroleum potential of these parcels. Due to lack of well ties or correlation to the newly reprocessed southern data set (e.g. Figures 15, 18, 20 and 22 illustrated in sections 2 to 4), data interpretation and the identification of main seismic reflectors is based only on regional seismic structural and stratigraphic correlations and comparisons with data from other Paleozoic onshore and offshore basins. Figure 27. Bathymetry map of Sydney Basin including location of Call for Bids NL06-2 Parcel 1, 2 and 3. Parcels are located mainly

on the north-eastern part of the Laurentian Channel, and partially on the Burgeo and Rose Blanche banks. (map modified after Jacques Whitford, Sydney Basin SEA, Draft Two - available from the C-NLOPB website: http://www.cnlopb.nl.ca/).


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5.1. Parcel 1 This is the southernmost parcel offered in the Sydney Basin and it has the largest area of the three landsale parcels (Figures 24, 27 and 28). Parcel 1 occupies an area of 271,891 hectares (671,857 acres) and is located almost entirely within the Laurentian Channel in water depths ranging from 220 m to 460 m, with most of the parcel in the 430 m depth range. To the north the parcel borders with Parcels 2 and 3 and to the west it extends all the way to the jurisdictional boundary between NL and NS. East of the parcel there is only open exploration acreage. The parcel lies entirely within the Carboniferous Sydney Basin. Overlying Acadian Basement are the Horton (and probably MacAdam Lake Fm), Windsor, Mabou and Pictou sedimentary sequences which exhibit excellent source and quality reservoir rocks as described previously in sections 3 and 4 of this report (Figure 17). No wells have been drilled in this parcel, but based on structural and stratigraphic data, lithologies similar with those drilled in the North Sydney and East Point wells will be encountered when drilling the structural traps observed in this parcel.

Figure 28. Call for Bids NL06-2 Parcels 1, 2 and 3 in the Sydney Basin and historic seismic coverage. Most recent seismic acquisition is from 1974. Green line represents offshore jurisdiction border between the Provinces of Nova Scotia and Newfoundland and Labrador. A-A’ and B-B’ are interpreted seismic lines used to illustrate the hydrocarbon potential of the three landsale parcels (seismic base map after C-NLOPB).


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Overall, the geological setting, petroleum geology and hydrocarbon potential of this parcel is also applicable to the remaining two parcels located to the north. Seismic line A-A’ (Figures 28 and 29) is a dip line diagonally crossing all three Sydney Basin parcels in their north-eastern part. Along this section, the Horton Group which is situated above a fractured and segmented basement shows structural deformation. In Parcel 1 the rotated block in the up thrown of a major thick-skinned fault shows a slight south-easterly dip and may create a large fault dependent closure for the MacAdam Lake (possibly), as well as the Windsor/Mabou and Morien successions. On the dip section B-B’ (Figures 28 and 30) the MacAdam Lake (possibly), Windsor/Mabou, Morien and the lower Pictou successions are deformed due to transpressional movements on major NE-SW trending faults. Several anticlines in Parcel 1 are propagating all the way to the mid-Pictou Group where they are eroded at the water bottom. Windsor salt movement is also responsible for some of the anticlinal features seen in Parcel 1. Due to lack of seismic coverage these features cannot be properly evaluated regarding their total area or vertical closure, but their amplitude on individual lines is impressive. Some anticlines are as wide as 10-20 km (Figures 25, 26, 29 and 30) and this suggests that if they are symmetrical they can be as large as 400 km2 and therefore ranking them among the largest undrilled features in North America. These large features can hold between 300 and 1 billion barrels of oil (unrisked) or several Tcf of gas if adequate reservoir is found.

Figure 29. NW-SE seismic section A-A’ through Sydney Basin Parcels 1, 2 and 3. The section shows the syn-rift rotated blocks and several inversion anticlines. AA= amplitude anomaly within the Morien Group and GC= gas chimney in the Pictou Group layers. Location of the line is given in Figure 27. The pre-1974 2D seismic data is available in paper copy from the C-NLOPB. With the exception of the 1973-74 lines, seismic data is of very poor quality. Lines are unmigrated and heavily contaminated by multiples. The usable seismic grid is insufficient for prospect mapping. By using the few lines that are interpretable and properly positioned and with help from the potential field data one can define significant size leads in this parcel. The traps are 1.) rift related, fault bounded structures formed in Late Devonian-Early Carboniferous; 2.) later inversion features of Early Pennsylvanian and/or early Permian age, and 3.) salt diapirism features. Other trap


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varieties never drilled in the Maritime basins but prolific in the Gulf of Mexico area are mini-basins with coarser grained sediments located between salt induced highs and coarse intervals located sub-salt or at the edges of salt diapirs (Durling and Martel, 2005). Sandstones of the MacAdam Lake Formation, Horton, Windsor/Mabou, Morien and Pictou group are possible reservoirs. Other reservoirs are limestones and dolomites of the Windsor Group. The source rocks expected to be mature in the parcel are lacustrine shales of the synrift sequence, marine shales of the Windsor Group, shales of the Mabou Group and coals of the Morien Group (Figure 17). Windsor evaporites form an excellent seal for syn-rift reservoirs while numerous tight intervals are present at all levels. Migration is along the regional fault zones that affect the extensional stage sequences and which extend upward to Mississippian and Pennsylvanian levels. The key risk will be finding quality reservoir and trap preservation since Late Paleozoic time.

Figure 30. NW-S E dip seismic section B-B’ through the Sydney Basin Parcels 1 and 3. The section shows the syn-rift rotated blocks and several inversion anticlines and possible salt induced anticlines. Location of the line is given in Figure 27. 5.2 Parcel 2 This Sydney Basin parcel occupies an area of 256,352 hectares (633,460 acres) and is partially located in the Laurentian Channel and partially on the shelf (Figure 27). Water depth ranges from 460 m within the Laurentian Channel to 80 m on the Burgeo Bank. About two-thirds of the parcel is situated in water depths of less than 200 m. No wells have been drilled in the parcel or in its immediate vicinity. To the south the parcel borders with Parcel 2, to the west with Parcel 3 and it borders with open exploration acreage to the east (Figure 27). The regional setting, petroleum geology and exploration potential are similar to those described for Parcel 1. The potential hydrocarbon plays include reservoirs and sources described above (also Figure 17), while possible traps are shown in Figure 29. Rotated blocks that may contain syn-rift reservoirs in their higher flank positions and transtensional anticlines that contain Mid and Late Carboniferous reservoirs are indicated in the seismic section A-A’ (Figures 28 and 29). The syn-rift sequence by virtue of its shallower subsurface depth will be easier to reach than for Parcel 1. The stacked reservoirs of the synrift and post rift Carboniferous successions trapped in


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four way or fault bounded closures are the main targets in this parcel. An interval with strong amplitude anomalies (AA) is visible within the Morien Group close to a major fault zone, indicating quite possibly the presence of reservoir gas (Figure 29). On the northwestern portion of the parcel, a gas chimney (GC) appears clearly imaged within the Pictou Group just above a large anticline expressed in the sedimentary cover and extending all the way to the basement (Figure 29). Lack of quality reservoir is also the main risk in this parcel. The unrisked size of possible accumulations and similar petroleum systems affirmations made for Parcel 1 also appear valid for this parcel. Analogue comments regarding data quality and scarcity of coverage also apply for this parcel. The leads visible on the old 2D seismic data have impressive sizes but undoubtedly the parcel needs modern seismic acquisition and processing to map drilling prospects. 5.3 Parcel 3 Parcel 3 is situated near the northwestern margin of the Sydney Basin. (Figures 27 and 28). The parcel occupies an area of 240,525 hectares (594,350 acres) and is located in the Laurentian Channel in water depths ranging from 200 m to 460 m, with most of the parcel in the 425 m water depth range. No wells have been drilled in the parcel. To the north the parcel borders with open acreage, to the east with Parcel 2, to the southeast with Parcel 1 and to the southwest it extends all the way to the jurisdictional border between NL and NS (Figure 27 and 28). Geologically, the parcel is located toward the northwestern margin of the Sydney Basin, where extensional and transpressional deformation on the long faults connecting the offshore to onshore structural trends is more pronounced. The basin shallows toward the north bringing the syn-rift successions (MacAdam Lake Formation and Horton Group) closer to surface. The main hydrocarbon play in this parcel would be the multiple stacked Carboniferous reservoirs (Windsor/Mabou, Morien and Pictou sandstones) trapped in salt induced or transpressional anticlines. Stratigraphic trapping configurations are also present near the margin of the basin. Sandstone layers onlapping the Acadian Basement or sandwiched between impermeable clastics or evaporite members, subuncorformity traps, etc., can be interpreted on the north-western portion of seismic lines B-B’ (Figures 28 and 30). Similar statements made for Parcel 1 regarding the presence of seal, source maturation, migration of hydrocarbons and size of accumulation can also be made for this parcel (also Figure 17). 6. Discussion Notwithstanding its proximity to the industrially developed regions of central Canada and to the vast markets of the eastern United States and existence of analogue Paleozoic fields to the south and across the ocean, exploration in the Sydney Basin is in an incipient stage. Numerous large oil and gas leads are identified with very old seismic data but the Newfoundland part of the basin has never seen exploration drilling and awaits modern seismic data acquisition and systematic exploration for both oil and gas. The three parcels offered in this landsale are located within the western and central part of the Sydney Basin, a virtually unexplored basin of Late Devonian to early Permian age


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(approximately 400-280 million years old), in which there are many four way closures and fault bounded anticlines formed through extension, structural inversion or salt diapirism. The size of the three parcels contained in Call for Bids NL06-2 is very large when compared with Gulf of Mexico block size (100 to 120 times larger) or Grand Banks offerings. All parcels are located in areas with known reservoirs, mature source rocks and proven migration paths, but risks exist related to quality of reservoir sandstones and the preservation of trap since Paleozoic time. The three parcels contain multiple reservoir targets within Paleozoic sandstones and limited potential for reefal carbonates also exists. These multiple target zones can be tested by drilling relatively shallow offshore wells using jack-ups or semi-submersible rigs (2000-3500 m drilling depth). Based on the scarce, old vintage, non-migrated, low quality seismic grid available for the area only leads can be tentatively mapped. New mapping with modern data may lower the geological risk, while prospect location in a shallow water environment with less severe climate may lower the economic risk. Numerous seismic amplitude or other attribute anomalies which may indicate the presence of hydrocarbon reservoirs are observed on the few quality seismic lines that are available. Systematic mapping and post-stack analysis of seismic attributes extracted from newly acquired and processed data may further reduce the geological risks associated with reservoir and trap integrity. Depending on total depth, an offshore well located in the Sydney Basin in water depths between 80 m and 450 m may cost anywhere from Can $15 MM to $25 MM. Metocean conditions are fair to good. Sea ice is infrequent and icebergs are very rare in the area (from one iceberg every 8 years to one every 25 years) (C-NLOPB, 2006). Pack ice if present, lasts for about 3 months of the year (February to early May). Fields can be developed using tie back to a shore processing facility, gravity based structures, bottom founded caissons or sub-bottom completion with FPSO. 7. Conclusions Three large parcels, located offshore to the southwest of the island of Newfoundland are available for licensing in the C-NLOPB’s Call for Bids NL06-2 which closes on November 30, 2006. These parcels are more than 100 times larger in size than Gulf of Mexico blocks. All three contain late Devonian to early Permian, mostly clastic sequences that have produced oil and gas elsewhere in the Appalachian fold and thrust belt, including the neighbouring province of New Brunswick. The licensing of these parcels represents a rare opportunity for oil and gas companies to lock into a new exploration area with large and very large leads, that has not yet been subjected to a proper exploration program and therefore remain undrilled. The Sydney Basin is a successor basin, formed during the final assembly of Pangea from mid Devonian to early Permian times. The basin was tectonically active for about 120 Ma and was subjected to rifting, thermal subsidence and inversion and experienced both lacustrine and marine interludes. Salt diapirism and movements along the Cobequid-Chedabucto transcurrent fault and its subsidiaries has created numerous structural highs in the Sydney Basin. The basin has all the prerequisites to become an important petroleum province.


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Successive thick clastic sequences underlying the basin contain both multiple reservoirs and various source rock levels. Carboniferous marine and lacustrine shales and numerous coals are proven source rocks throughout Atlantic Canada. Seismic amplitude anomalies pointing toward gas accumulations are present in much of the inspected old seismic lines. Additionally, marine episodes during Windsor Group deposition and other marine restricted incursions throughout Late Paleozoic may provide oil prone source rocks. Large rotated fault bounded blocks, inversion anticlines and salt diapirs, most of these showing simple or fault bounded closures, provide sizable targets on all three Sydney Basin parcels available for bid. High quality dense 2D or 3D seismic data is needed to properly image such targets and ascertain the geological risks. Exploration risks are the presence of quality reservoirs and the preservation of traps since late Paleozoic. New seismic acquisition is also absolutely necessary to identify more complex composite traps, investigate their areal distribution and quantify the seismic attributes. All these parcels are very large exploration blocks situated in shallow water, some in the territory of jack up rigs, in an area where drilling can be performed year round. The Sydney Basin parcels are located in a practically unexplored basin, but close to northeastern American and Canadian markets in an area where their exists a very low political risk. Acquiring these parcels presents a unique Frontier opportunity for companies looking for large oil and gas reserves within the North American continent and willing to take a long term view to exploration and production. 8. Acknowledgements This report draws heavily on past work by Drs. Pascucci, Gibling and Williams. Dr Gibling of Dalhousie University and Dave Brown of C-NSOPB have provided additional information and access to their collection of papers. Kris Kendall of NSDE provided several illustrations and invaluable information on the Nova Scotia part of the basin. Discussions with Phonse Fagan of A.J. Fagan, Consulting Inc. and reviews by Larry Hicks and Wes Foote of the NL Department of Natural Resources greatly improved the text. Thanks are extended to Leona Stead of NLDNR for graphics assistance and final report organizing and to David Hawkins of C-NLOPB for facilitating access to reports and seismic data. Trevor Bennett of C-NLOPB is also thanked for providing some graphic material. The work could not have been done without information provided by the C-NLOPB, Government of Newfoundland and Labrador Department of Natural Resources and Pan-Atlantic Petroleum Systems Consortium (PPSC). 9. Further Reading Being the first landsale in the Sydney Basin since the early seventies, a comprehensive list of references on the Carboniferous of Atlantic Canada in general and Sydney Basin in particular is included in this report.

Alberta Energy and Utility Board EUB, Alberta Geological Survey, The Geological Atlas

of the Western Canada Sedimentary Basin - Chapter 14; Carboniferous Strata, http://www.ags.gov.ab.ca/publications/ATLAS_WWW/A_CH14/CH_14.shtml

Atkinson, I. M., 2005. The Structural Evolution of Western Newfoundland and Its Implication on Petroleum Prospects, AAPG-CSPG Conference, Calgary, AB.


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Atkinson, I. and Fagan, P., 2000. Sedimentary Basins and hydrocarbon potential of Newfoundland and Labrador, Government of Newfoundland and Labrador, Report 2000-01, also available at http://www.gov.nl.ca/mines&en/oil

Atkinson, I. and Wright, J., 2006. The Petroleum Potential of Western Newfoundland’s

Cambro-Ordovician Succession, NOIA Conference, St John’s, NL., 2006.

Barr, S.M., Raeside, R.P., Miller, B.V. and White, C.E., 1995. Terrane evolution and accretion in Cape Breton Island, Nova Scotia. In Current perspectives in the Appalachian–Caledonian Orogen. Edited by J.P. Hibbard, C.R. van Staal, and P.A. Cawood. Geological Association of Canada, Special Paper 41, p. 391–407.

Barr, S.M., Raeside, R.P. and White, C.E., 1998. Geological correlations between Cape Breton Island and Newfoundland, northern Appalachian orogen. Canadian Journal of Earth Sciences, v. 35, p. 1252–1270.

Barss, M.S., Bujak, J.P. and Williams, G.L., 1979. Palynological zonation and correlation of sixty-seven wells, eastern Canada. Geological Survey of Canada, Paper 78-24.

Bell, J.S. and Howie, R.D., 1990. Paleozoic geology. In Geology of the Continental Margin of Eastern Canada. Edited by M.J. Keen and G.L. Williams. Geological Survey of Canada, Geology of Canada, p. 141–165.

Boehner, R.C., 1986. Salt and potash resources in Nova Scotia. Nova Scotia Department of Mines and Energy, Bulletin 5.

Boehner, R.C., 1986. Lithostratigraphic, Geological and Paleogeographical setting of

Carbonate Buildups in the Lower Carboniferous Windsor and Horton groups, Nova Scotia. Nova Scotia Department of Mines and Energy, Report 88-1.

Boehner, R.C., 1991. An Overview of the Role of Windsor Group Evaporites in the Structural Development of Carboniferous Basins in Nova Scotia. Nova Scotia Department of Mineral Resources, Mines and Energy Branches, Report 92-1, p. 39-56.

Boehner, R.C. and Giles, P.S., 1986. Geological map of the Sydney Basin. Nova Scotia

Department of Mines and Energy, Map 86-1.

Boehner, R.C. and Prime, G., 1993. Geology of the Loch Lomond Basin and Glengarry Half Graben, Richmond and Cape Breton Counties, Cape Breton Island, Nova Scotia. Nova Scotia Department of Natural Resources, Mines and Energy Branches, Memoir 9.

Bourque, P.A., 2004. Fossil Fuel Resources in Quebec, MRNFP-The Security and Future

Energy Resources in Quebec.

Bradley, D.C., 1982. Subsidence in Late Paleozoic basins in the northern Appalachians. Tectonics, 1: p. 107–123.


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Browne, G.H. and Plint, A. G., 1994. Alternating braidplain and lacustrine deposition in a strike-slip setting: The Pennsylvanian Boss Point Formation of the Cumberland Basin, Maritime Canada, Journal of Sedimentary Research, V B64, No.1, p. 40-59.

Calder, J. H., 1998. The Carboniferous Evolution of Nova Scotia; in Lyell: The Past is

the Key to the Present, eds. Blundell, D. and Scott, A. C.; Geological Society of London, Special Publication, p. 296-331

Calder, J. H., Boehner, R. C., Brown, D. E., Gibling, M. R., Mukhopadhyay, P. K., Ryan,

R. J. and Skilliter, D. M., 1998. Classic Carboniferous Sections of the Minas and Cumberland Basins in Nova Scotia With Special Reference to Organic Deposits; The Society for Organic Petrology, Annual Meeting - Field Trip, 29-30 July, 1998, Nova Scotia Department of Natural Resources, Mineral Resources Branch, Open File Report ME 1998-5.

Cawood, P.A., Dunning, G.R., Lux, D. and van Gool, J.A.M., 1994. Timing of peak

metamorphism and deformation along the Appalachian margin of Laurentia in Newfoundland: Silurian, not Ordovician: Geology, v. 22, p. 399-402.

Cockerill, I. et al., 2005. Looking for impact? – 2 Tcf Shallow Water Prospect - Sydney

Basin, offshore Nova Scotia. Poster Presented at NAPE - available from Hunt Oil Canada. C-NLOPB, Schedule of Wells, Newfoundland & Labrador offshore areas - March 2005.

C-NLOPB, 2006. Strategic Environmental Assessment of the Sydney Basin for the Newfoundland and Labrador Offshore Area (draft two). Prepared by Jacques Whitford and available at http://www.cnlopb.nl.ca/

Colman-Sadd, S.P., Hayes, J.P. and Knight, I., 1990. Geology of the Island of

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