DISCUSSION PAPER FEEDBACK FORM
Discussion Paper Title: Petroleum Operations, Costs and Opportunities in Nova Scotia
1) How useful was this Discussion Paper to you? Please select.
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2) How easy was this Discussion Paper to read and understand? Please select.
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3) To what extent do you agree with the accuracy of the Discussion Paper? Please select.
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4) Are there any topics that were omitted that you would like to see included in future versions?
Please list.

The discussion paper does not clearly articulate the similarities and differences between
conventional and unconventional resource exploration and development. There are
important differences that need to be established throughout the paper. For example, once
unconventional resource plays (shale, tight sandstones and hybrid plays), are proven and
economic, they require extensive planning to reduce costs and increase efficiencies. This
planning allows for efficient, orderly and carefully staged development.

An unconventional resource exploration and development supply chain analysis would
provide a more thorough examination of the business and employment opportunities for
Nova Scotia. The discussion paper is a cursory overview and does not articulate the broader
benefits of resource play activities in Canada. Further examples of resource development
work can be found in northeast British Columbia (e.g., Montney and Horn River Basins) and
west-central Alberta (emerging Montney and Duvernay plays).
5) Are there any questions that you would like to see addressed? Please list.

P. 2 Section 2. There can also be a stage prior to rights acquisition when a company may
review all available information (government geology maps and data, prior industry drilling
data, any existing seismic coverage, regulatory framework, stakeholder issues, fiscal
competitiveness, etc.) to make an initial assessment of unconventional play potential. This
allows proponents to evaluate the opportunity in comparison to other regions (in Canada,
US or the world).

P. 3 Section 2.2. This section is missing an important description of conventional vs.
unconventional plays, which is critical because the subsequent steps to evaluate the
resources are different with significantly varying cost components (e.g., 3D seismic
programs, extensive core sampling of vertical wells, laboratory analyses to characterize the
shale unit, and whether to use a long lateral horizontal wells or multi-stage hydraulic
fractures).
o Also in the section, more description of the transition from exploration to full field
development would be beneficial, as it ties back to costs, activity levels and impacts. For
example, the pilot or evaluation stage differs significantly between conventional and
unconventional as proponents must analyze how or whether to move into multi-well pads
and what is required for hydraulic fracturing methods, lateral well spacing and other cost
factors.
o In this section, on the continuing page (P.3) refers to Vibroseis trucks as ‘the’ method used
to conduct seismic surveys; however, this is not the only method that can be deployed.
Other 2D and/or 3D seismic programs could be deployed that use or require charges and
instrumentation along lines or grids.

P.3 Section 2.3. This section (first paragraph) describes a conventional target and process of
evaluation with a single well. For unconventional plays (shale, tights sandstones), in other
jurisdictions for example, proponents tend to drill several vertical wells initially to evaluate
the target formation (they may elect to conduct hydraulic fracturing operations in this
vertical wellbore as well). However, as can be seen in other jurisdictions, they will ultimately
drill horizontal wells in several different locations to determine the best hydraulic fracture
technique. This process may include micro-seismic work and other methods to gain a more
complete understanding on the new formation. For unconventional wells, they will also be
flow-tested for weeks or months to determine the production characteristics and to get a
sense of how much flow-backflow fluid is obtained. All this information is used to create
and refine development plans.

P.4 Section 2.3. In site identification (prior to land being cleared) it is important to include
such steps as extensive site evaluation, planning, surveying, archeological and
environmental assessments before any land is cleared. Much of this up-front information
must be submitted to obtain permits to conduct any physical work on the ground. In this
stage the regulatory agency reviews the proposed work to ensure safety and environmental
protection.

P. 5 Section 2.3. Last paragraph of this section. Numerous other services are also required
to support long-lateral horizontal wells. This might include accommodations, waste
management, aggregate (sand and gravel) for site construction and access roads, first aid
services, etc.

Figure 3. It is important to provide context when using visuals, as they may not be market
appropriate given level of development potential. Figure 3 depicts a moderate volume
hydraulic fracturing operation targeting a deep target (probably greater then 2,500m) as
indicated by the number of compressor vehicles. Those in Nova Scotia would require
significantly less equipment due the shallower depths of the target formations.

P.6 Section 2.4. The last paragraph on the page. It should provide context that water is not
the only fluid used in hydraulic fracturing and it should be noted that there are several basic
types of hydraulic fracturing. A common one used in shale formations is called “slickwater”
where the fluid injected deep underground is primarily water based, but other base fluids
may be used. The proppant is commonly silica sand.
o Also when referencing the wide range for water volume (5,000 to 100,000m3), it is
important to note that it will vary and will be based on site- and play-specific
geological factors.

P. 7 Section 2.4. The sentence at top of page dramatically over-simplifies the diverse
opportunities for local businesses and people to support all unconventional and hydraulic
fracturing operations.
o P. 7 Second paragraph: Sliding sleeve is another technique that accomplishes the
same things and reduces the time to complete these steps.
o P.7 Second paragraph: Flow testing for unconventional formations can take days,
weeks or months to adequately characterize the production of a well. The produced
gas must be flared or incinerated after obtaining regulatory approvals. Ultimately,
the proponent would be interested in tying the well into a pipeline to generate
revenue
o P.7 Second paragraph: Production tubing has to be installed before HF or flowtesting.

P. 7 -8 Section 3. Flow back fluid management commonly evolves as a project moves from
exploration through to development phases. The scale of systems required must therefore,
be scaled-up appropriately. This includes systems to treat or recycle fluids, storage systems
and ultimately disposal practices. Each component requires regulatory review, approval and
oversight.

P.9 Section 3 (bullet 8). It is important to note specificities regarding practices mentioned.
Gathering lines have to be appropriately abandoned and surface casing is not removed,
depending on the location of the well, practices may vary, but often require it being cut and
cap casing.

P. 11 Section 4 (bullet 2). Proving commercial viability of a shale gas (or other
unconventional plays) requires numerous vertical and horizontal wells, numerous multistage HF wells that are flow-tested for sufficient periods to develop production-type curves.
This data and the accompanying cost learnings can be modelled to determine if the play can
be commercially produced and typically requires at least 5 to 10 years of effort in most new
areas.

P. 12 Table 1. Royalty revenue to the Province is not identified in Table 1.

P. 13 Section 5 (bullet 1). LPG fractures are a minority practice where geological conditions
are appropriate. It would be prudent to include the risks and costs associated with this
practice if it is to be mentioned.
o P. 13-14 (Bullet 3). Full disclosure is required in most jurisdictions. CAPP and its
members fully support the disclosure of fracture fluid additives as evidenced by the
Guiding Principles and Operating Practices developed in collaboration with member
companies: http://www.capp.ca/getdoc.aspx?DocId=218130&DT=NTV

P. 15 Section 5.2. Initial field development for unconventional resource plays is typically
decades (not 4-5 years) depending of the size of the play.
o Ibid. Paragraph 2, last sentence. This is somewhat inaccurate. BC’s Montney play is
being commercially developed today and is actually one of the most competitive
unconventional plays in North America. The Horn River Basin had a ramp-up
exploration and initial development prior to 2007; however, current lower natural
gas prices have slowed this work.
o Ibid. Paragraph 3. Resource-based communities, like those in northeast BC and
west-central Alberta, rely on oil and gas activities to sustain their communities.
Unconventional resource play activities can help build communities with
collaboration between Government, industry and communities.
6) Would you like to receive updates about the Hydraulic Fracturing review and notices about the
release of future papers? Please select: Yes No
Name: Paul Barnes, Manager, Atlantic Canada and Arctic, Canadian Association of Petroleum
Producers.
Email: Paul.Barnes@capp.ca
Thank you!