Canadian Discovery Ltd. - Corporate History

Corporate History

Canadian Discovery Ltd. (CDL), a geological information services company, was founded in 1987 by Mr. Ed Fogg. The company's initial mandate was to provide low-cost exploration expertise to the oil and gas industry via the company's flagship product, the Canadian Discovery Digest. Over the next two decades, the CDL product line grew to include activity maps, strategic reports, geological studies and custom consulting work. The company also expanded internationally, launching the UK Discovery Digest in 1999 and the Norway Discovery Digest thereafter.

At about the same time, in 1989, Rakhit Petroleum Consulting Ltd. (RPCL) was founded by Mr. Kaush Rakhit. After some early industry experience, and acquiring an M.Sc. in Advanced Petroleum Hydrodynamics from the University of Alberta, Kaush wanted to create a venue for the development and implementation of hydrogeological techniques and knowledge. Early on Kaush gained a reputation for being innovative yet technically sound as he applied his knowledge to petroleum exploration and development. In 1990, the company grew as two more geologists joined RPCL and they moved into a tiny office in downtown Calgary. Each project was painstakingly completed by hand, without the aid of computers, providing many opportunities to study play types in considerable detail. In this environment the staff at RPCL gained an intimate knowledge of the Western Canada Sedimentary Basin (WCSB).

Aside from its regular client consulting work, in 1992 RPCL undertook the massive project of compiling and digitizing the wealth of fluid chemistry data publically available in western Canada. Starting with the water analyses file and continuing with the gas and oil analyses files, RPCL eventually created GeoFluids™, western Canada's most complete digital fluid analyses database, with over 450,000 records. From the outset it was decided that the raw data in GeoFluids™ required further processing. A program was put in place to add value to the data by identifying and classifying the various fluid types recovered. This screening process was based on the knowledge of fluid dynamics and characteristics gained by the RPCL staff in their consulting work. RPCL soon became the recognized experts in both formation fluid evaluations and petroleum hydrodynamics.

With the availability of the digital data and the rapidly developing wealth of knowledge, RPCL undertook three new ambitious projects. The Hydrocarbon Chemistry Atlas, the Hydrogeological Atlas and the Water Resistivity Atlas of the Western Canada Sedimentary Basin. These atlases include maps of H₂S, CO₂ and N₂ concentrations, API Oil Gravity, Water Salinity, Hydraulic Head, Force Vector Flow and Water Resistivity (R_w) for productive zones in the WCSB. This understanding of basin architecture and plumbing allows RPCL to approach other basins around the world with a certain level of familiarity. A variety of play types found in the WCSB, including heavy oil, deep basin gas, biogenic gas, stratigraphic and structural traps and open, static and tilted oil/water hydraulic regimes, provided the perfect backdrop against which to test and refine RPCL's theories and techniques.

In 1996, RPCL began to offer its services to the international market. One of the first overseas projects involved applying an understanding of basin scale geology and hydrodynamics to North Sea exploration. In partnership with Exploration Geosciences Ltd. of Great Britain, RPCL completed a multi-client study of the Chalk in the Southern Central Graben, North Sea. This study recognized the Chalk as a carrier bed for long range oil migration, opening up significant potential for new play concepts in the shelf areas. From there, RPCL continued to expand its knowledge of international basins with studies in 19 countries around the world.

In the early 2000s, RPCL's consulting and multi-client work focused largely on unconventional gas resources: shallow biogenic gas, Deep Basin and basin- centred gas, coalbed methane and shale gas. Realizing that many shallow gas resources had been largely overlooked due to underpressuring, shale content and mineralogy, RPCL developed a unique approach to identifying and mapping these gas resources and reducing the risk of encountering wet areas. In the Deep Basin, RPCL developed a new model to explain the existence of both overpressured and transitional systems, in addition to underpressured systems. As part of the project, a definitive set of lower and higher-pressured Deep Basin edges were mapped out and released to industry.

In 2005, Rakhit Petroleum Consulting Ltd. purchased Canadian Discovery Ltd. and the two companies merged. As Kaush Rakhit stated at the time:

"Bringing the two companies together under the same roof will bolster our collective technical experience, skills and resources, and will lead to significant improvements in our products and delivery systems."

Indeed, since joining forces, the companies have undertaken a number of significant new initiatives.

In 2005, RPCL and BJ Services conducted the Stress Analysis of Central Alberta study, compiled from the largest frac pressure database in the world. The study examines the relationships between stress, diagenesis and permeability, and develops correlations between current day stress, areas of pervasive gas saturation, tectonics and associated post-Laramide erosion. The study provides a unique set of tools for highgrading areas for unconventional gas exploration.

Also in 2005, CDL released the Strategy 2005 report, which distills ten years of drilling activity to provide geologic settings for 108 plays, resolve economic and production data sets and establish optimal areas for future exploration.

Recently, CDL has incorporated detailed sedimentology and core analysis into project work, through a partnership with Graham Davies Geological Consultants (GDGC). CDL's Bakken projects incorporate geology, hydrogeology and reservoir characterization to provide detailed technical insights into developing this massive resource play. A similar approach is currently being applied to the company's Montney work, another resource play wih enormous potential.

In addition to conducting integrated geoscience projects, the company continues to expand on other fronts. Through an alliance with CB Securities, CDL provides clients with an arm's-length third party analysis of oil and gas property acquisitions and divestitures. Our experience, in-house databases and library of studies place us in an excellent position to offer our clients risk and upside analysis for any project that may come our way.