THE KEYSER FILE

_______________ BY TOM KEYSER Freelance Columnist _______________

High-End Exploration

Respected Geologist Enjoys Aggressive Hunt

One of the oilpatch's best-known geologists, Calgary's Tom Boreen, P.Geol., PhD, is the type who can generally write his own ticket. After all, he shares credit for the discovery of Ladyfern, a major natural gas field in northeastern B.C.

Recently, Dr. Boreen became intrigued with a new natural gas exploration strategy at Suncor Energy. So he contacted Suncor Vice-President Roger Smith, P.Geol., to ask whether the team had room for one more.

Smith jumped at the chance to hire the exploration specialist.

Tom Boreen, P.Geol., PhD. . .getting high-end, drill-ready prospects to market. -Mike Sturk photo

And since joining Suncor's Prospect Generation Services group last year, Dr. Boreen is having the time of his life. "This is the only group in town that has a mandate to develop, capture and market high-end and drill-ready prospects to industry,” he says.

Ambitious Mandate
Headed by Mr. Smith, Suncor's 15-member team of professionals is on a mission to shift gas exploration and research efforts into overdrive.

The reason? As Canada's fourth-largest oil producer and refiner, Suncor expects to extract 215,000 barrels a day this year from the Northern Alberta oilsands. The company will roll out at an operating cost of $11.75 a barrel – much of which represents the cost of natural gas needed to fire the projects.

"Prospect Generation Services is helping to provide a natural hedge within the organization," Mr. Smith explains. "Our exploration and production side wants to find and produce as much gas as we ever expect to consume within the organization, and that's a lot."

Over the long term, Suncor's appetite for gas will only intensify. As new production facilities ramp up, Suncor oilsands are projected to produce more than 500,000 barrels a day by 2012 at the latest.

"We work to develop prospects and opportunities. Then we take them to the street to find companies that are interested in drilling them," Mr. Smith explains.

In a nutshell, the team covers land and seismic costs, often reprocessing voluminous stores of older seismic data with the latest technological tools.

A Payoff of New Drilling
The strategy works. Last year, Prospect Generation Services partners spent in excess of $40 million on new drilling projects and the current year’s activity has the potential to dwarf that.

For his part, Dr. Boreen is enjoying his position at the heart of the action – which is another addition to an already impressive resumé.

He started in the oil business as a field operator at Lloydminster in the early 1980s. After returning to academia and completing his PhD thesis at Queen's University, he re-launched his oilpatch career in 1994. During the late 1990s, he and his Shell Canada exploration team zeroed in on Ladyfern, after mapping the Upper Devonian Slave Point Formation about 100 kilometres north of Fort St. John.

Dr. Boreen and Kelvin Colquhoun, P.Geoph., who’s now with Apache Canada, had detected traces of hydrothermal dolomite, "with a small amount of porosity" in a 20-year-old abandoned drill core.

"Our exploration model indicated that there could be a high-impact play," he remembers. "And after 18 months, we had done enough work to convince management to buy the rights on the prospect and shoot seismic."

Huge Find
Subsequent 3D seismic mapping proved the scientists were on to something. In fact, it pointed to the largest onshore North American gas find in nearly two decades.
Meanwhile, by the end of 1999, Apache Energy had acquired Shell Canada's drilling rights, along with the services of Dr. Boreen and his entire exploration group.

"Apache took us over at the end of November," he recalls. "And on Jan. 1, we drilled the Ladyfern discovery well. Apache aggressively developed the field with partners Murphy Oil and Beau Canada, but the technical success of the discovery was directly attributable to the exploration expertise developed at Shell Canada."

Today, with natural gas prices in the lower stratosphere, other energy companies have realized it makes economic sense to go fishing in the "depleted" Western Canada Sedimentary Basin.

Dr. Boreen, for one, remains convinced there is plenty more gas where Ladyfern came from. "There are more big discoveries to be made, no question," he says. "We don't talk about if we hit another monster field. We talk about when we hit it.”

Suncor's oilsands processors, it appears, will have the natural gas to meet their needs for many years to come.