Redwater Fifty Years Later: Discovery Brought The Modern Age To Canada's Industry

By Shaun Polczer

This August, veterans of the Alberta oil boom will gather at Redwater for what could be the last time at the town's annual Discovery Days to reminisce and celebrate 50 years since the largest oil find ever made in Canada.

Under the original Imperial Redwater #1 discovery derrick standing at the first tee of the Redwater golf course, there will be a parade of old timers replete with barbecues, beer gardens and country dances.

The town will live up to its name by painting itself red and imperial Oil Resources Limited Vice-President Doug Baldwin will cut the cake on 50 years since the discovery, which found 1.3 billion bbls of oil.

One wonders if Hilton Cook could imagine the events in his pasture during that hot summer of 1948 becoming ritualized in midway rides, cotton candy and Derrick dogs?

About three quarters of a mile east of town, Redwater #1 keeps pumping out oil like it has for the past 50 years. The old pump jack at the opening of the lease is just for show it was replaced with an electric submersible bottom hole pump nearly 25 years ago but most visitors on tours from town probably won't know the difference.

The only reminder of what happened here is a weathered sign, erected for the 25^th anniversary of the discovery, and a brief description of the events, which catapulted the sleepy farming village into national and international prominence.

When Imperial spudded Leduc No. 1 in 1947, misconceptions about Alberta's geologic history were quickly becoming unraveled.

The Leduc-Woodbend discovery established the presence in Western Canada of large subterranean reefs in the Devonian formation capable of producing economic quantities of oil and gas.

Just as geologists and the scientific community were coming to grips with the implications Leduc, Imperial did it again on Aug. 30, 1948, when an even larger strike was made on Hilton Cook's farm at Redwater, 60 kilometres northeast of Edmonton.

The implications were almost beyond conventional geologic wisdom of the day. The notion Alberta had been covered by a large inland sea populated by marine invertebrates and tropical plants 400 million years ago was, at best, on the outside fringes of acceptability.

But a massive saucer-shaped structure it was tilted on a northeast strike, with the oil pool situated at the top uppermost corner. Fractures across the oil-bearing limestone allowed the oil to seep into the reservoir spaces, where it was trapped by the Ireton shale cap stone.

Unlike many conventional reservoirs, the Redwater field does not have an overlying gas cap to supply energy for lift. Instead, pressure is supplied by the Cooking Lake aquifer, a vast salt-water deposit, underlying the oil-bearing limestone, estimated to contain 100 billion bbls of water.

Redwater proved beyond a doubt the value of seismic as a tool for exploration. As early as 1946, seismic crews working for Imperial had delineated a massive reef structure 1,000 metres in Devonian strata in 57-21 W4M, but delayed drilling it until the success of Leduc. The discovery well was spudded on July 23, 1948, a few miles northeast of the present day Redwater, named for a distinctive tinge iron oxide gives to local groundwater.

On the evening of Aug. 30, the well reached total depth of 3,264 feet, encountering 140 feet of pay in the D-3 zone or what came to be known as the Leduc formation.

Production began in earnest on Oct. 7, 1948 and by 1952 there were 925 wells on 40-acre spacing across an area 30 kilometres long and seven kilometres wide.

Whereas Leduc established the presence of huge amounts of oil in Alberta, Redwater paved the way for the modem Alberta oil and gas industry.

That winter, the federal government proclaimed the Pipelines Act in response to the Leduc and Redwater discoveries. In April 1949, Imperial layed a pivotal role in founding Interprovincial Pipe Line to handle the volume of oil from both fields.

Imperial had even commissioned two fresh-water tankers the Imperial Leduc and the Imperial Redwater - to haul oil across the Great Lakes to its Sarnia refinery from Superior, Wisconsin. The company decided it was cheaper and easier to build ships rather than take a pipeline across the Canadian Shield.

Redwater also ushered in the modern era of Crown land sales. By the winter of 1948, the Alberta government rewrote the legislation pertaining to sales of Crown acreage and instituted the sealed bidding process and bonus payment system still in use today.

The process was not without its critics, including Daily Oil Bulletin founder Carl O. Nickle, who editorialized that an open auction should have been the preferred method of disposing of Crown land.

"Bulk of the industry, we believe, is in favour of open, competitive bidding, with each bidder and the amount of his bid known to the public," he wrote, in the DOB on Dec. 18, 1948.

Almost overnight, Redwater went from a sleepy farming town of about 99 people to a bustling metropolis of 4,000.

An archetypal oil town in every sense of the word. Roads were non-existent, housing was scarce and tensions between farmers and roughnecks were high.

To this day, Redwater is very much a company town despite attempts to downplay the overt connection.

Imperial donated much of the land occupied by the town's recreational facilities such as the local hockey rink and golf course and company employees and contractors have traditionally played significant roles on town council, in volunteer groups and organizing social events such as Discovery Days.

Redwater born-and-bred Larry Wozney is an example. He was brought up on a farm just outside of town and went on to become maintenance supervisor for the Esso Redwater gas plant. This year, he is Esso's representative on the town's 50th anniversary committee.

"It's quite common to have second generation employees work here, even now," he said. "Obviously, it's a special relationship the company has with the town."

Over time, Redwater would establish itself as Canada's most prolific field, containing over four times more oil than Leduc.

Production peaked at about 180,000 bbls per day in 1975 and has steadily declined since to about 6,600 bbls per day. To date, more than 96% of the estimated 64% recoverable oil in place has been produced, with cumulative output reaching some 800 million bbls.

In its day, Redwater sparked an intense debate among reservoir engineers, who felt the volume of recoverable oil could have been higher if the field had been unitized and subject to a pressure maintenance program of waterflooding at the outset. Instead, the field was allowed to produce at its own pressure until the mid-1950s, when an enhanced recovery program was finally instituted.

Through the 1950s, oil pumped to the surface was virtually water free, unlike today, when more than 155 bbls of water are produced for each bbl of oil.

"When I started in 1974, there was hardly any water," said Wozney. "Today, it's almost all water."

Initially there was a distinct oil-water zone within the reservoir, but Redwater has since become, basically, a huge skimming operation.

Redwater Disposal Company Ltd. was formed by field operators in 1950, when wells began producing fluids. It eventually became the largest saltwater disposal company in the world. Redwater Disposal gets revenue on one million bbls per day of water, with about 441 bbls a day of oil as compensation for its work.

Its contractor, Rice Engineering and Operating Ltd., went on to become a world leader in processed water disposal technology.

Wozney said Redwater Disposal has "been key" to maximizing ultimate recovery of the field.

"They've got quite a role in all this," he said. "It's hard to imagine all those pipelines filled with water. It really is amazing how much they produce."

Despite water being by far the predominant fluid in production, there are still about 500 million bbls of oil left in the reservoir of which about 36 million bbls are considered recoverable.

"We're getting down to the short strokes, but it's still a substantial prize, obviously," said Wozney.

Unlike Leduc, which was put on the block last year, Imperial has no immediate plans to divest the Redwater field, said spokesman Pius Rolheiser.

"Redwater oil is still very economic to produce," he said.

Redwater has proven to be a lowcost operation, with a high return on capital employed at per unit costs of about $6-7 per bbl. As long as those costs stay relatively low and oil prices remain relatively high, imperial can afford to operate the field economically until the taps are turned off for the last time.

Based on a number of factors, including power costs, oil prices and technological developments, the date when the oil is likely to stop flowing has been pushed back to the year 2010. But, Redwater oil was never expected to have a 50^th birthday, let alone a 60^th.

"We can probably keep it going for another 15 years," Wozney said. "Redwater was never expected to last this long, so it really is a good news/bad news story."

The first mention of Imperial Redwater #1 in the pages of Nickle's Oil Bulletin is made on Sept. 3, 1948, with a small blurb listing the status of the well as "drilling", even though everyone in the Redwater area, unofficially of course, knew it had already struck oil.

Publisher, editor and reporter C. O. Nickle noted there was "an interesting showing of crude oil on the drill stem test" although he added "no official confirmation" was forthcoming from Imperial.

On Sept. 17, in another small item, Nickle noted Imperial "wants the full answer on that (the D-3 limestone) horizon and the potentialities of the No. 1 well before talking for publication."

But Nickle knew something was up. In the same item he was quick to add: "Redwater has all the makings of an important discovery. It is by far the brightest looking prospect tapped on the Alberta plains since Imperial Oil Ltd. completed its Leduc discovery well nine months ago. Those are purely the writer's opinions," he wrote.

Finally on Oct. 8, 1948, six weeks after the discovery and only after Imperial began drilling three step-outs which would consolidate its land position in the area, Redwater was announced to the world.

"Redwater oil is a name to remember."

Top