IPTC 16755

Athabasca Oil Sands: Application of Integrated Technology in the

Identification of Commercial Thermal and Mining Opportunities
David Moreton, Joan Carter, Mike Peacock, and Becky Rogala, Imperial Oil Resources

Copyright 2013, International Petroleum Technology Conference

This paper was prepared for presentation at the International Petroleum Technology Conference held in Beijing, China, 26–28 March 2013.

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Abstract

The heavy oil deposits of Canada contain an estimated 1.8 trillion barrels of bitumen in place. The Early
Cretaceous McMurray Formation in the Athabasca region of northern Alberta contains about 960 billion barrels of
bitumen in place and can be developed through surface mining and thermal in situ techniques. This paper
examines the key subsurface development challenges associated with commercializing oil sands developments
and demonstrates how knowledge of regional reservoir distribution and the use of an integrated technology
approach are vital in the identification, selection, and ranking of the highest quality resource opportunities at the
exploration scale. The regional geology of the Western Canada Basin and the Athabasca area will be reviewed.

At the development stage the conventional approach to evaluate Athabasca oil sands properties requires closely
spaced coreholes drilled 100 m to 400 m apart. This approach is being applied to understand reservoir presence
and continuity, lithofacies distribution, net-to-gross and bitumen saturation. Fluvial estuarine point bar reservoirs
form a large portion of the resource that is amenable to development. Point bar scale, stacking style and
preservation potential varies considerably throughout the McMurray resource. Examples will be shown from 3D
seismic and corehole data to demonstrate spatial changes in stratigraphic complexity within the McMurray
Formation. The importance of detailed reservoir characterization studies and the impact on thermal in situ and
mining recovery mechanisms will also be discussed.

This paper will demonstrate that an integrated core, well log, and high resolution 2D and 3D seismic strategy with
the appropriate sequencing can avoid unnecessary data acquisition and financial pre-investment through removal
of non-optimal corehole placement and corehole reduction. This approach allows identification and selective
targeting of the highest quality and lowest complexity project-scale resource first with the lowest development
uncertainty and greatest economic chance of success.

Introduction

The heavy oil deposits of Canada contain an estimated 1.8 trillion barrels of bitumen in place (ERCB ST98-2012, 2012). The
Early Cretaceous McMurray Formation in the Athabasca area of northern Alberta (Figure 1) contains approximately 960
billion barrels of bitumen in place and is being developed through surface mining and thermal in situ techniques. The fastest
growing in situ production is through Steam-Assisted Gravity Drainage projects (SAGD) (Butler, 1980). The performance
and economic viability of these projects relies on placement of the initial development in the highest quality resource to
support the cost of development. In currently producing mining and SAGD properties geology has been demonstrated to be
the most important parameter in project success (Rennie, 1997; Jimenez, 2008). Identifying high-graded areas for
development at the exploration stage is critical to optimize project economics. Due to the complex nature of the reservoir
distribution, data is often collected over an area much larger than the potential development, and collected at a much higher
density than may be necessary to make key development decisions. In recent years the growth in oil sands development has
put considerable strain on the capacity of the service industry to meet the increase in oil sands project needs. Consequently,
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the cost of data collection is increasing, pushing for more efficient use of data to make investment decisions.

This paper will show two case studies where an integrated seismic and corehole data set is used to identify resources
sufficient to support a multi-phased oil sands development project and demonstrate how stratigraphic complexity can
influence resource quality and evaluation costs for oil sands projects. This paper focuses on the stratigraphic aspects of
identification of commercial oil sands deposits. Other subsurface reservoir development considerations that impact
commercial viability of oil sands projects, such as bitumen grade (oil saturation) and quality, fluid type, and reservoir
pressure, are not discussed.

Regional Setting and Stratigraphy

The Aptian McMurray Formation is the lowest part of the Mannville Group preserved in the Athabasca basin in north-east
Alberta, Canada. The McMurray Formation unconformably overlies a Paleozoic succession. The topographic variability on
the basal unconformity influenced both the reservoir distribution and the depositional environments of the McMurray
Formation (Langenberg et al., 2002). The McMurray Formation is sub-divided into four members, SB-I through SB-IV
(Figure 2), interpreted to be deposited in an overall transgressive succession of tidally influenced fluvial deposits. The SB-I,
SB-II and SB-III members are dominated by low to increasing sinuosity deposition, while the SB-IV member is dominated
by estuarine bayfill and coastal plain deposits. Regional correlation of these units is challenging, however, point bars have
been documented along the axis of the McMurray fairway, which indicate deposition and preservation of a meandering
fluvial system of similar scale to that of the modern Mississippi River, USA (cf. Fisk 1944). Unconformably overlying the
McMurray are the incised valleys and transgressive units of the Wabiskaw Member of the Clearwater Formation. In much of
the Athabasca Basin the Clearwater Formation provides the caprock for thermal recovery projects.

The availability of public domain core and well log data affords a unique opportunity to understand the regional distribution
of the McMurray reservoir and aid in identifying optimal areas for SAGD and mining developments. Approximately 68,000
wells were available for analysis in the Athabasca basin in 2012. These data are used to develop key regional models for the
McMurray. The extent of the McMurray reservoir, and consequently the area for bitumen extraction, is highlighted through
regional isopach maps (Peacock, 2010, Nardin et al., 2012) and bitumen pay thickness maps (Hein & Cotterill, 2006) through
extensive regional corehole data mapping. The regional map (Figure 1) illustrates a clear SSE-NNW trending McMurray
depositional fairway, with subsidiary feeder systems entering from the SSW and East. The map highlights areas where the
McMurray Formation is thickest along the main axial trend. Cumulative net pay values up to 100 m have been observed in
coreholes within this axial trend. However, the examples provided in this paper demonstrate that McMurray thickness and
bitumen pay thickness alone are not sufficient to identify asset quality for any particular thermal or mining project.

Figure 1. Athabasca Oil Sands Location and McMurray Formation Isopach Map (The isopach has been truncated
below 40m thickness to highlight the main depositional fairways.
IPTC 16755 3

Figure 2. Type log displaying the four sub-divided members of the McMurray Formation (SB-I through SB-IV) in
the Athabasca basin. SB-I: thick amalgamated braided stream deposits, overlain by a shoaling-upward sequence
of lacustrine muds, paleosols and coals. SB-II is a heterolithic assemblage of, dominated by small scale point
bars. SB-III: large-scale fluvial/estuarine point bars that are up to 70 m thick in the basin. SB-IV: marine
signature deposited in a bayhead environment. The McMurray is overlain by the Clearwater Formation, which
forms the regional cap rock. Overall, the sequence deepens upward as a result of the Clearwater transgression.

McMurray Point Bars and Thermal Recovery

The alluvial architecture of point bar deposits and description of vertical point bar profiles is well established from modern
and ancient fluvial systems (e.g. Allen, 1970b; Friend, 1979; Bridge & Tye, 2000; Shepard, 2009) and, while depositional
profiles may vary considerably due to point bar size, shape, migration, erosional history and sampling location (Willis, 1993;
Diaz-Molina, 1993), the basic characteristics are common among deposits from meandering river systems. Generalised
vertical profiles contain a basal lag deposit, commonly incorporating mudstone clasts deposited in the channel thalweg. These
basal units are overlain by progressively finer and thinner bedded deposits that represent the vertical expression of an
asymmetric meandering channel laterally migrating via low angle inner bank lateral accretion with dips up to 9 degrees
(Nardin et al., 2012) and steep angle outer bank erosion (Diaz-Molina, 1993). Commonly, these point bar successions are
capped with interbedded fine-grained silts and muds that often exhibit evidence of subaerial exposure. This depositional
process results in a permeability profile that has a high-permeability basal unit overlain by decreasing vertical permeability
associated with decreasing grain-size. Depending on the depositional history and location along the point bar, the lateral
accretion surfaces may be erosional reactivation surfaces formed at high flow stages and lined with mud-clasts commonly at
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the bar-head or depositional surfaces lined with mud deposited at low flow stages and located more common at the bar-tail.
Consequently, the vertical decrease in permeability may occur in steps and maybe punctuated rather than gradational
(Shepard, 2009). These inclined mud drapes can form a series of barriers to flow, reducing sweep efficiency in point bar
reservoirs (e.g. Pranter et al., 2007). Numerous studies have documented the presence of preserved point bars as a key
reservoir deposit for the McMurray SB-III Member in outcrop (Wrightman & Pemberton, 1997; Smith et al., 2009; Musial et
al., 2011), seismic (Labrecque et al., 2011), and open pit mine faces (Nardin et al., 2012). Grain size distribution is narrow
within the McMurray interval and point bars show limited evidence for a vertical decrease in grain size and strong evidence
for increasing vertical mud content.

Steam Assisted Gravity Drainage (SAGD) recovery technology (Butler, 1980) (Figure 3) applies well to the basal parts of
point bar sequences within the McMurray Formation. SAGD is a process where-by horizontal well pairs are drilled with
approximately 5 m of vertical separation. Low-pressure, high-temperature steam is injected into the upper wellbore, reducing
the viscosity of the bitumen and allowing drainage into the lower producing wellbore. It is generally accepted that a
minimum of 8-12 m net continuous pay is required to economically support placement of a horizontal well pair. The net
continuous pay interval is defined as a vertically continuous net sand interval with good vertical communication and minimal
thief zones, bounded at the base by either a non-reservoir lithology or a wet reservoir interval unit and at the top by the
presence of a significant non-permeable mudstone barrier.

Figure 3. Steam Assisted Gravity Drainage Process.

Typically, initial development areas target reservoir with an average net pay interval in excess of the minimum SAGD
threshold in order to support the development costs (Jimenez, 2008) and progressively step out to more marginal net pay
reservoirs during later field life. Failure to identify the highest quality resource first may result in lower project
commerciality. Industry varies in their opinions on what mudstone thickness criteria may inhibit steam growth. An example
from Peacock (2010) suggests mudstones of only a few 10’s of centimetres may temporarily halt steam chamber growth for
several months. Consequently, reservoir architecture and the spatial variability of facies permeability, including the presence
of mudstones along a horizontal well bore, can cause non-uniform delivery of steam to the reservoir (e.g. Zhang et al, 2007;
Gotawala & Gates, 2010) resulting in unswept zones where steam has been cut-off from part of the reservoir, effectively
reducing the bitumen volume available for recovery. As discussed previously, point bars are characterised by low dip
bedding up to 9 degrees (Nardin et al., 2012), and thus over distances of a typical horizontal SAGD well (~1000m), the
wellbore will intersect multiple lateral accretion surfaces, which increases the chances of steam accessing bitumen pay.
Predicting how bitumen will be recovered in reservoirs with multiple stacked channel deposits (e.g. Langenberg et al., 2002;
Zhang et al., 2007) is much more challenging and introduces a greater degree of development uncertainty.
IPTC 16755 5

Point Bar Stacking Examples from Wireline-Log and Core Data

Examples of gamma ray and resistivity wireline-log data from two corehole locations within the McMurray Oil Sands region
are presented in Figure 4. Coreholes are displayed with a gamma ray curve (left) shaded to reflect net sand (yellow) and mud
(grey) intervals. The resistivity curve (right) is shaded in green where bitumen saturation exceeds 8 wt%, blue less than 8
wt% and red where low saturation gas is present. In Example 1 the gamma ray curve shows a characteristic fining and
thinning upwards sequence with an estimated gross net pay interval of 28 m within an overall gross McMurray thickness of
51 m. This example is interpreted to represent a single stacked point bar succession with a continuous steam chamber
containing a net pay of 26 m. In Example 2 the gamma ray log signature indicates three net sand intervals displaying subtle
fining upwards characteristics separated by intervening mud prone intervals. Gross net pay is calculated to be 32 m within a
gross McMurray thickness of 52 m. The wireline-log data is interpreted as three vertically stacked point bar successions with
separate steam chambers containing net pay intervals of 8 m, 11 m and 13 m increasing vertically. Distinguishing the three-
dimensional stacking of these point bars with confidence from log data alone can be very difficult (cf. Bridge & Tye, 2000).
Typically conventional core (Peacock 2010) and borehole image data (Strobl et al., 2009; Brekke & Couch, 2011) can be
used to confirm the nature of the boundaries between the separately stacked point bar units and the potential for barriers or
baffles to steam.

Conventional core from Example 1 shows a mudstone clast interval at 14 m (Figure 5a), which is not expected to
significantly impede steam chamber growth or bitumen drainage. The boundaries in Example 2 (Figure 5b) are defined by the
presence of mudstone beds between point bars 1, 2 and 3. Below these boundaries, interbedded sands and muds with
mudstones with individual mudstone beds up to 0.1 m thick could act as barriers to flow. Above the boundaries, mudstone
clast intervals are present, which could increase flow baffling. The nature of these boundaries as seen in core, and to a lesser
extent, image logs provides the additional information necessary to determine whether the boundary is depositional
(laminated mudstones) or erosional (mudstone clasts), and to understand if the boundary will act as a barrier or baffle to
steam growth, respectively. While Examples 1 and 2 have similar gross McMurray thicknesses, Example 2 contains a higher
gross net pay than Example 1, which in the absence of detailed stratigraphic understanding would lead a resource evaluator to
conclude a higher recoverable resource potential than Example 2. However, Example 2 shows three potentially separate
steam chambers. Therefore, if SAGD well pairs were located in the lower steam chamber, steam may not access the upper
steam chambers and cut the accessible net pay down to only the lowest 8 m steam chamber. Multiple SAGD wellbore
completions may be required in point bars 1, 2 and 3 in Example 2 to access the resource, elevating the cost of development.
In Example 1 the gross steam chamber pay is lower than Example 2, but the steam is more likely to entire pay section, and
will be the more commercially viable option for SAGD recovery.

Figure 4. Examples of gamma ray and resistivity wireline log data from two corehole locations through the SB-III
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Member within the McMurray Formation in the Athabasca basin. Example 1: Single large scale point bar, and
Example 2: multiple stacked point bars are illustrated as blue triangles. Coreholes are displayed with a gamma
ray curve (left) shaded to reflect net sand (yellow) and mud (grey) intervals. The resistivity curve (right) is shaded
in green when bitumen saturation exceeds 8 wt%, blue for less than 8wt% and red where low saturation gas is
present.

Figure 5. Core data from Example 1 and 2 highlights key boundaries within and between point bar deposits
allowing steam chambers to be defined. (A) Within the single fining upward point bar a higher gamma ray value at
approximately 14 m relates to a mud-clast zone. This clast zone would not be considered as a barrier to steam
and therefore included in the continuous steam chamber net pay of 26 m. (B) Between the three stacked point
IPTC 16755 7

bars in Example 2 core is used to define steam chamber tops and bases using the presence of laminated
mudstones overlain by higher energy, mud-clast facies as boundaries. This technique results in three separate
steam chambers with increasing vertical thickness. Multiple upward fining cycles are less ideal SAGD
developments as laminated muds retard vertical growth of the steam chamber.

Case Studies of McMurray Stratigraphic Complexity

Core and wireline-log data provide valuable insight into the potential resource quality for oil sand extraction enabling the
generation of bitumen net pay maps. However, these data are limited in providing spatial correlation at sufficient resolution
to establish the potential development uncertainties associated with bitumen extraction, such as mudstone bed continuity. A
number of previous studies have emphasized the importance of understanding permeability barriers to steam at the inter-well
bore scale. Mapping the presence, orientation, patterns and preserved extent of point bars is important in determining the
viability of a particular recovery technology in any particular oil sands opportunity. This study shows two examples and
illustrates how various data acquisition strategies using corehole data and 3D seismic can aid identification and screening of
oil sands resource for commercial viability at the lowest cost during the exploration stage.

Case Study 1: Single Large Scale Point Bar Example

Cross-section A to A’ (Figure 6) shows a seismic line oriented sub-parallel to the direction of point bar accretion, which
intersects four corehole locations, including the Example 1 corehole (Figure 4). Seismic reflectors within the McMurray
Formation have a well-defined dip direction from right to left at an angle of approximately 3-4 degrees and represent lateral
accretion surfaces. In the upper part of the point bar the presence of Inclined Heterolithic Strata (IHS) and sometimes low
saturation gas creates a large seismic impedance contrast, allowing the lateral accretion to be particularly well imaged. The
seismic impedance contrast is suppressed in the lower part of the seismic section indicating a less heterolithic interval. Log
data derived from coreholes drilled into the point bar are displayed on the seismic section. These logs show fining upwards
character, supporting a large scale point bar model. The key depositional surfaces between accretionary bars are denoted by
clear changes in lateral accretion frequency along the section. While a single lateral accretion surface cannot be correlated
over distances of typical exploration corehole spacing of 400 m to 1600 m (Nardin et al, 2012), the direction of lateral
accretion is consistent over a distance exceeding 4 km indicating presence of a single depositional point bar feature. In this
example, the lateral accretion packages terminate with an asymmetric, low impedance channel feature. This feature is
interpreted to represent deposition in the final stage of meander channel abandonment and passive mud-fill.

The 3D seismic time-slice of the upper part of the McMurray reservoir SB-III member (Figure 7) shows a single large scale
meander bend with an aerial extent of approximately 40 km2, comparable in size to the modern Mississippi River (cf. Fisk
1944, Jordan & Pryor, 1992). The point bar is bounded by a mud-filled abandoned channel and shows no significant post-
abandonment erosion. High frequency changes in seismic impedance highlight scroll bar surfaces, which represent IHS in the
upper part of the point bar. Changes in scroll bar frequency, orientation and truncation indicate that depositional rates varied
during bar growth and are useful in establishing bar boundaries (Diaz-Molina, 1993). Depositional rates respond to discharge
variability controlled by climate cyclicity (Mossop & Flach, 1984; Labrecque et al., 2011; Nardin et al., 2012). Sand
distribution, thickness and extent of mud interbeds vary in each bar. As a result, prediction of permeability along a horizontal
well bore can be challenging. Meandering channels migrate via downstream translation (Smith et al., 2009; Nardin et al.,
2012) resulting in progressive upstream scroll bar erosion and truncation and downstream scroll bar onlap and accretion. The
upstream to mid part of the point bar is a preferential location for sand deposition, while there is increasing potential for mud
deposition downstream (Willis & Tang, 2010; Nardin et al., 2012).

In this example the flow is interpreted to have been from right to left. As demonstrated, it is important to identify the
upstream to mid area of a point bar where the deposit generally contain high net pay zones and provide ideal locations for an
initial SAGD development. The seismic data integrated with corehole data supports a single stacked point bar interpretation
with a preserved thickness of approximately 50 m. Large-scale point bar deposits with minimal post-depositional erosion are
favourable locations for multiphase SAGD projects. In this example, thalweg scour level remains relatively constant over the
extent of the point bar allowing horizontal well placement in the lowest part of the point bar to avoid by-passing pay. In
addition, lateral accretion with dips of approximately 3-4 degrees are observed. Horizontal wellbores drilled parallel to the
accretion direction would have access to multiple lateral accretion sets over lengths of typical horizontal SAGD wells of
approximately 1000 m (Figure 6b).
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Figure 6. (A) 3D seismic image transect A to A’ through the McMurray Formation reservoir interval. Red and
yellow colours represent low seismic impedance reflection, grey and black represent high seismic impedance
events. Gamma ray wireline-log data is shown along the corehole locations. (B) Schematic interpretation of the
seismic line showing distinct bar boundaries and evidence of lateral accretion packages that vary in frequency
and have a thickness in excess of 40 m.

Figure 7. (A) 3D Seismic time-slice taken from the upper part of the McMurray Sequence III Member where scroll
bar architecture associated with point bar expansion and down-stream translation within a meandering river
system is exhibited. The point bar shows limited post-abandonment erosion of this point bar within the McMurray
Formation. (B) Schematic interpretation of the point bar highlights interpreted flow direction and preferential areas
for sand deposition in the upstream (head) to mid part of the bar.
Case Study 2: Multiple Stacked Point Bar Example

Case Study 2 is represented by the 3D seismic traverse B to B’ (Figure 8) through the McMurray interval, penetrated by well
log Example 2. It is located in a different geographical area of the Athabasca Oil Sands than Example 1. The seismic facies
character to the left of the posted Example 2 corehole indicates several stacked intervals, each approximately 20 m thick.
Both upper and lower intervals exhibit inclined strata showing apparent dip to the right, separated by a horizontal reflector.
Langenberg et al. (2002) also documented the presence of laterally stacked point bar deposits of different ages within the
McMurray from outcrop and 2D seismic. The seismic reflections on the left side of the coreholes suggest a vertical stacking
of point bars with minimal basal erosional relief over a typical horizontal SAGD well pair distance of 1000 m, consistent
with observations of erosional relief from other point bar depositional sequences (e.g. Salter, 1993). The point bar sequences
on the right side of the coreholes appear more variably stacked, suggesting multiple phases of meandering channel avulsion
and post-abandonment erosion. In this example, if steam were injected into the lowest point bar deposit, access to the upper
two point bars would require steam and bitumen to take a much more tortuous path than in the single point bar case (Figures
6 & 7), relying on erosional processes to juxtapose sand on sand and provide connectivity windows between vertically
successive point bars. The smaller point bar size and increased stacking in this example increases the opportunity for heat
loss and lower recovery, resulting in a higher steam oil ratio (SOR) and lower commerciality for the project. Furthermore, if
steam encounters significant baffles or barriers it may spread laterally rather than vertically, reducing well productivity. The
presence of stacked point bars often results in additional corehole data being collected to try to understand the geological
complexity, increasing evaluation costs. Identifying the potential for stacked point bars prior to significant investment in
corehole drilling is necessary for commercial project success. The stacked nature of these deposits introduces additional
challenges to the placement of horizontal well bores for bitumen recovery.

Figure 8. (A) Seismic image transect through the McMurray reservoir interval. Red and yellow colours represent
low seismic impedance reflection, grey and black represent high seismic impedance events. Gamma ray wireline-
log data is shown along the corehole locations. (B) Schematic interpretation of the seismic line showing distinct
vertically and laterally stacked point bars and potential vertical boundaries correlatable to log and core data and
evidence of lateral accretion packages of a smaller scale than observed in Figure 6 (Note the different horizontal
scale to Figure 6).
Impact of Stacking Patterns on Resource Quality for Thermal and Surface Mining Projects

Estimates of in-place bitumen resource can be obtained from core and wireline-log data, but without assessment of the
stratigraphic framework, the effective recoverable bitumen by in situ thermal or surface mining operations is difficult to
evaluate and may misrepresent the resource quality. Table 1 shows a standard set of parameters used to create maps and
ascertain oil sands project quality at the exploration phase for thermal (SAGD) and surface mining operations. Reservoirs that
display large scale single-stacked point bars with thickness in excess of 40 m, and with limited post-abandonment erosion are
particularly suitable for multi-phased SAGD developments. These are interpreted to be sediments deposited during the last
phase of channel belt migration before avulsion and abandonment and can be clearly observed on 3D seismic data (Case
Study 1). In areas with increased point bar stacking, both vertical and lateral reservoir continuity is disrupted and steam has a
higher potential to be baffled or to encounter significant barriers over the length of a horizontal well pair, limiting the overall
well productivity (Case Study 2). If each stacked point bar interval requires a separate well pair for bitumen recovery the
overall number of well pairs increases, resulting in higher costs, and increasing chance of economic failure. Case Study 1
would be more economically viable as a thermal development than Case Study 2.

A major parameter in determining resource quality for subsurface mining is the ratio of total volume of rock to volume of
bitumen in place (TV:BIP), whereby lower TV:BIP values indicate more economically viable resource. Here we assume that
both McMurray reservoir examples shown have 30m of overburden above the top McMurray reservoir horizon. With this
assumption, the TV:BIP calculated from the single corehole examples shows the TV:BIP ratio for Example 1 would be
higher than that calculated for Example 2 (assuming a 6 wt% bitumen cut-off, phi 33%, bitumen saturation average of 11
wt%, and 3m ore-waste selectivity). Due to the selectivity of the shovel, the mudstone intervals described in core that are less
than 3m in Example 2 would be sent to the plant and not separated as waste. By implication, on a single corehole basis,
Example 2 would be more economically viable to mine than Example 1 as less rock volume needs to be removed relative to
bitumen recovered. However, additional data may show reservoir complexity not revealed by the single well.

Table 1. Typical set of parameters from log data used in evaluating resource quality of Oil Sands SAGD
and mining potential for corehole Example 1 and 2.

Parameter Units Log Example 1 Log Example 2

Gross McMurray Thickness m 51 52
Thermal
(SAGD)

Net Pay (>8wt % bitumen) m 28 34

Number of Steam Chambers N/A 1 3
Steam Chamber Net Pay (>8wt % bitumen) m 26 8, 11, 13
SAGD Resource Quality N/A High Moderate
Net pay (>6wt% bitumen) m 30 36
Mining

TV:BIP (assumes 30m overburden) m3:m3 11.0 9.5

*

Mining Resource Quality N/A Moderate Moderate - High

*Mining estimate assumes phi 33%, bit sat average 11 wt%, 3m selectivity

Approaches to Oil Sands Evaluation and Value of Information

Typically, in early phases of evaluation, coreholes are drilled at densities of approximately 1 to 2 coreholes per section to
meet regulatory minimums for acreage retention. The data are used to create gross reservoir thickness maps, net pay maps,
and calculate in-place contingent resources. Gross reservoir thickness and net pay maps are often used as indicators of
resource quality for investment decisions. The spacing from this corehole density alone is insufficient to capture the
stratigraphic complexity within the McMurray Formation (e.g. Hein & Cotterill, 2006) and may lead to an over- or under-
estimation of resource quality when considered with a particular extraction technology in mind. In some cases additional
costly corehole data is acquired at higher densities, which results in a downgrading of resource size and quality (Rennie,
1987). The examples presented in this paper have demonstrated that the combination of different datasets can provide all of
the necessary spatial subsurface information required for effective oil sands evaluation and decision making at the
exploration stage.

This paper demonstrates an integrated evaluation workflow (Figure 9). While the examples have been derived from 3D
seismic volumes, the acquisition of a relatively low cost lease-wide 2D seismic grid prior to corehole drilling can provide
valuable information on the potential reservoir stacking patterns and reservoir continuity. This allows resource amenability to
thermal recovery techniques to be estimated, and corehole placement to be optimized to test key reservoir uncertainties.
Seismic data also provides more reliable horizons for depth conversion (Tonn, 2010) for optimal corehole and horizontal well
placement to improve well productivity and limit by-passed pay risks. In early corehole drilling, conventional core data and
high resolution image logs are required to confirm the nature of potential mud layers that are below the detectable limits of
standard wireline-log and seismic data. Lessons from mining operations and outcrop can also provide valuable insight into
the subsurface architecture and should be incorporated into any exploration evaluation workflow. The combination of 2D
IPTC 16755 11

seismic and coarsely spaced coreholes allows resources, such as those identified in case study 2, to be identified early and
avoided for initial SAGD developments.

Once a suitable area has been identified that will support the initial development criteria, lease-wide 3D seismic data should
be acquired to extrapolate away from corehole and 2D seismic data points. This will improve the spatial resolution needed to
determine resource continuity and allow for targeting of higher net sand areas of the point bar. 3D seismic permits
identification, screening, and high-grading of initial development areas allowing future corehole programs to target low
complexity areas, thus delaying expensive lease-wide corehole programs without compromising the project chance of success
and uncertainty. Lowering the corehole density requirements reduces cost (Figure 10) and increases the project flexibility by
allowing development decisions to be accelerated and not be contingent on waiting for the results of multi-year corehole
programs. The 3D seismic data acquisition from the area of Case Study 1 is estimated to have reduced the evaluation
corehole number by approximately 15-20% at the exploration stage by avoiding corehole placement in non-reservoir and
more stratigraphically complex areas. Collection of 3D seismic data has the further benefit of providing the baseline survey
for future 4D seismic programs to monitor steam growth over time, which is instrumental to optimising future infill drilling at
the development and production stages. Reducing the need for corehole data prior to key business decisions has the
additional tangible benefits of decreasing safety and execution risk, and environmental impact exposure. Finally, coreholes
density should reflect stratigraphic complexity and can be selectively located in the low complexity areas for the initial
development at an appropriate density to support regulatory applications.

Figure 9. Integrated workflow for oil sand property evaluation.

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Figure 10. The impact of data type and stratigraphic complexity on potential corehole density and evaluation costs
for a single Oil Sands section for in situ thermal (SAGD project). Note: The cost of corehole drilling will vary
depending on the depth of the McMurray, drilling system used, and operator.

Conclusion

This study highlights that regional scale isopach and gross net bitumen pay maps are not sufficient in isolation to identify the
highest quality resources and amenability to specific recovery technologies at the exploration scale. This paper has focussed
on the implication for on thermal recovery, but these may also apply to mineable resource. Reservoir architecture more
suitable for mining is not always the most suitable for thermal in situ recovery. Through case studies shown in this paper, it
can be demonstrated that specific types of subsurface data can aid understanding of different stratigraphic uncertainties. It is
the integration of multiple datasets and appropriate sequencing of data acquisition that is vital to develop an early
understanding of potential resource quality and key stratigraphic development uncertainties and to avoid:

1. Non-optimal placement of coreholes.

2. A higher density of coreholes than is necessary.
3. The over- or under-estimation of the resource potential.
4. Reduced project flexibility as a result of corehole placement in unfavourable areas for initial development.
5. Cost, execution and schedule exposure.

Acknowledgements

We would like to thank Imperial Oil Limited for allowing us to present this material. Mark Wood, Robert Yates, Greg Josiak,
Matt Garvin are thanked for their useful discussions in addition to colleagues within Imperial Oil Resources and ExxonMobil
Upstream Research Company who have collaborated on aspects of this work. Additional thanks go to Lyle Rietze for drafting
the figures within the paper. We would also like to thank Robert Yates and John Eastwood for information reviews of the
manuscript.

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