Transcript Digger Resources Inc.

High Definition
Reservoir Geochemistry
A New Direct Hydrocarbon Indicator For the Oil & Gas Industry
Trading Information
• TSX Venture Exchange :
DIG
• 52 Week Trading Range:
$0.30 - 4.00
• Shares Issued & O/S :
9,349,035
• Options O/S :
1,275,000
• Fully Diluted O/S:
10,624,035
Corporate Information
• Head Office
12 Sierra Morena Way SW, Calgary, AB T3H 3E4
Telephone: 403 290-1913 | Fax: 403 261-7015
E-Mail:
[email protected]
Website: www.diggerresources.com
• Transfer Agent:
Computershare,Vancouver, B.C.
• Auditors: PricewaterhouseCoopers LLP, Calgary,
AB
• Lawyers: Bryan & Company LLP, Calgary, AB
Directors
• Norman Yeo, B.A., LL.B., Calgary, AB
• John Burt Wilson, ACIB, TEP, Jersey, CI
• Len Burchell, FCMA, Capetown, SA
• Graeme Wallace, B.A., M.Sc., Ph.D., Toronto, ON
• Russell Birrell, B.Sc., M.Sc., Perth, Australia
Officers
• Norman Yeo, B.A., LL.B., President & CEO
• Russell Birrell, B.Sc., M.Sc., VP R&D
• David Kinton, B.Ed., P.Land, VP Land
• Desmond DeFreitas, C.A., CFO
• Larry Dewar, VP Field Operations
• Bill Aldag, VP Engineering
High Definition Reservoir Geochemistry
(HDRG) The Principles
Mobile ions migrate vertically to
surface (like mineral deposits)
HDRG anomaly derived from two
sources:
1. Anomalous elements from
hydrocarbon accumulation.
2. Concentration of country
rock elements within reducing
area of vertical ionic path.
Result is strong multi-element
surface anomaly developed over
hydrocarbon accumulation.
High Definition Reservoir Geochemistry
(HDRG) The Theory
• When mobile ions
arrive at surface,
they have a limited
life as ‘mobile’ ions.
• Mobile ions (blue) do
not move from the
source due to limited
life before becoming
bound.
• HDRG measures
only the mobile ions.
HDRG Proprietary Leachant
Typical soil sample
B
C
C
A
B
HDRG leachant will not
extract bound elements like
conventional techniques
C
A
B
Mobile ion
B
C
HDRG leachant only
extracts mobile ions
(single elements)
A
A
A
C
C
Bound elements
B
B
A
HDRG - The Development of a Petroleum
Significance Index (PSI)
• Approximately 21 elements / species are analyzed
using proprietary technology.
• All lab results are normalized, creating individual
“Anomaly to Background” (Response) Ratios for each
element.
• Response Ratios for all elements are benchmarked
against existing well control.
• Key elements are chosen based on their response over
existing productive & non-productive wells in the
sample area.
• Response Ratios for each selected key element are
combined to create the final Petroleum Significance
Index (“PSI”) map.
What HDRG can do?
• Target hydrocarbon accumulations at depth.
• Provide an elemental fingerprint for hydrocarbon bearing
versus non-hydrocarbon bearing wells - Excellent in
areas with established production.
• Be very definitive in established areas with complex
geology & where seismic results are ambiguous.
• Provide rapid collection of valid data in challenging areas
where seismic acquisition is difficult.
• Once an adequate HDRG data base and fingerprint is
established for a project area, HDRG can be applied as
the primary exploration tool in undrilled areas.
What Digger HDRG can’t do?
• Unable to define subsurface stratigraphy or structure
like seismic.
• Currently unable to distinguish between multiple zone
& single zone hydrocarbon potential.
• As with seismic, it cannot predict quality of
hydrocarbon reservoir or quantify potential flow rates.
• Currently not recommended as the primary
exploration method without some predefined
geological or existing well control for fingerprinting.
HDRG vs. Conventional Geochemistry
• Glauconite oil channel sand
at 1000m depth, SE Alberta.
• A strong, multi-element
HDRG anomaly correlated
directly to the thickest net oil
pay.
• No anomaly was present
using the highest resolution
conventional geochemical
analysis techniques.
Jumping Pound HDRG
Traverse PSI Plot
West
East
Morley West Jumping New Expl. 2 cased
North end W. Cochrane
Pound
Play T25 R6 wells Jumping Pound (undrilled)
Jumping Pound Survey
• Samples collected along 30 kms. of Highway 1A,
west of Cochrane, Alberta.
• A major oil company concluded the survey was
successful in delineating gas fields in the area.
Served as pre-qualification to significant frontier
HDRG program.
• The technology proved to be a cost effective
exploration tool.
• No special permitting was required & turnaround was
about two weeks.
HDRG: Drilling Validation
• A SW Saskatchewan property was selected by
Green Dragon Investments in September 2002
based on the results of HDRG surveys at 4-13-1419W3 location.
• Surface HDRG responses appeared to reflect zones
of maximum hydrocarbon accumulation that
corresponded to stratigraphic & structural traps.
• The well drilled was a successful Roseray oil well (a
structural high) with a production capability of 100
BOPD in a mature oil reservoir that, for reasons of
reservoir thickness & geological contrast, could not
be resolved by seismic programs.
Green Dragon’s SW Sask. Oil Property
4-13-14-19W3M
3-D PSI Map
4-13 well drilled with
Digger’s HDRG Sept.
2002; 100 BOPD
Exploration
lead
Exploration
lead
2-13 original well
drilled 1957,
+800,000 BO to
date, +97% wtr cut
3-13 well drilled with 2-D
seismic Jan. 2002, initial
production 25 BOPD at
+97% wtr cut & now shut in
Subsequent Drilling Near
Green Dragons 4-13-14-19W3M Well
Green Dragon
4-13 Well
100 bopd
1957, 2-13 Well
800,000 Barrels
of oil produced
Since the 4-13 was
drilled, 9 other
wells have been
drilled within a 1
mile radius of the
4-13 by operators
relying on seismic
& in all cases the
wells have been
either dry holes or
marginal wells.
HDRG: 15-36-13-19W3M Well
• The 15-36 outpost well was directionally drilled under a
slough by Green Dragon.
• HDRG responses at surface again reflected the zones
of significant hydrocarbon accumulation that had no
corresponding geological or seismic indications for
hydrocarbons.
• Drilling intersected a pay zone associated with the
Lower Shaunavon limestone at a depth of 1162m with
5m of pay. An offsetting horizontal well utilizing new
fracturing technology is planned for 2009.
• The Lower Shaunavon Formation has not been a
primary exploration target for oil pay in this area.
Drilling - 2008
1-17-14-18W3M Well
•The 1-17 wildcat well was directionally drilled 3km
from any existing wells in January 2008.
•Drilling intersected 4m of gross well log oil pay in the
McCloud Member & 5m of gross well log oil pay in
the Lower Shaunavon formations.
•These formations have not been exploration targets
for oil pay in this area.
Frontier Applications of
Surface Techniques – Gore Sorber
• With $20-35 Million wells & 3D seismic costing more than
$45,000/km2 Devon Canada investigated cheaper
alternative exploration technologies to assist in its
ongoing evaluations of its Mackenzie Delta & Beaufort
Sea Exploration Licenses.
• Devon’s initial survey in the area of the Tuk oilfield was
with GORE-SORBER in 2001. The goal was to template
several oil & gas accumulations in the area to identify any
significant geochemical signal at surface, differentiate
Paleozoic, Cretaceous & Tertiary-aged pools on the basis
of hydrocarbon type & to delineate the pool boundaries.
• An orientation survey of 221 stations using grids & line
traverses was undertaken. The survey ultimately yielded
inconclusive results.
Frontier Applications of
Surface Techniques – HDRG
Mackenzie Delta & Parsons Lake - 2003
• Completed HDRG benchmarking
surveys in Mackenzie Delta: Unipkat
SDL (oil) & Parsons Lake SDL (gas).
• Samples subjected to a strict Chain
of Custody Protocol thus ensuring
voracity of survey results.
• Carried out extensive QA / QC
checks to ensure both accuracy &
repeatability of HDRG process.
• Clearly identified both fields
including details such as oil vs. gas,
fault boundaries & upside potential.
Frontier Applications
Mackenzie Delta – 2004
• Completed Hydrocarbon
Prospectivity surveys of
potential exploration drilling
targets.
• Completed follow-up surveys in
& around Unipkat SDL.
• Results again were positive & in
keeping with results obtained
during 2003 survey program.
Frontier Applications
Offshore Beaufort Sea
• Based on the 2003 / 04 program results,
coupled with the successful application
of this technology in the mineral industry
in lake bed sediment sampling,
discussions on the application of HDRG
surveys in the offshore Canadian
Beaufort were held.
• Initial discussions revolved around the
shallow water (2-3m water depth) Adgo
SDL which could be easily & cost
effectively accessed from the landfast
ice.
• There was further interest from both
industry and government with regard to
a potential benchmarking program over
the Amauligak field (30m water depth).
Frontier Applications
Yukon
• An HDRG Hydrocarbon Potential
survey was conducted in the
Kotaneelee gas field prior to the
drilling of a in-fill development well.
• HDRG predicted a dry hole over the
proposed bottom-hole location of the
proposed well.
• The well was drilled & encountered
NO RESERVOIR at the proposed
bottom-hole location.
• The well was then plugged back & the
well drilled at a steeper intersect angle
& hydrocarbons were then intersected.
Frontier Applications
Yukon – Kotaneelee Gas Field
Surface location
of L 38 well
Frontier Applications
Scientific Validation
• Digger’s HDRG was featured at the May 2006 CSPG –
CSEG – CWLS Convention held in Calgary, Alberta.
• The paper entitled "New Technology, New Thinking in
the BMB" was co-authored by Devon geologists.
• The thrust of the paper presented was that due to the
very high cost of drilling & 3D seismic, in the Mackenzie
Delta & elsewhere in northern Canada, oil & gas
operators are looking for new cost effective exploration
tools, such as HDRG, to assist with exploration for new
hydrocarbon reserves in support of the developing
Mackenzie Valley gas pipeline system.
Frontier Applications
Scientific Validation
 The paper confirmed that
Digger completed sizeable
HDRG sampling programs in
the Mackenzie Delta, Yukon,
& northern British Columbia
for Devon to benchmark oil &
gas accumulations in the area
to identify any significant
surface geochemical
response.
 Devon was successful in
confirming HDRG surface
geochemistry as a useful
exploration tool for the
Canadian Frontiers.
Concluding Remarks
• The proprietary HDRG process has been derived from
a proven geochemistry technique utilized extensively
in the mineral industry in the search for precious &
base metals.
• Digger has invested ~9 years in transitioning this
technology to the oil & gas industry via numerous field
studies through to the drilling of both successful
development & exploration wells – based solely on
HDRG.
• HDRG’s record in the frontier is excellent for both oil &
gas & provides an important tool for reducing both the
risk & cost associated with frontier exploration &
development.