PanCanadian news similar to mid 1970's Mobile's Hibernia trategy-- They found oil on the continental shelf and spent a couple of years doing targeted sesmic on the Hibernia site and then presto!
Attached is the news release from PanCanadian on April 18, 1997.
PanCanadian renews exploration in Newfoundland-- Report from Globe and Mail-- Highlights potential of western Newfoundland petroleum
April 18, 1997
PanCanadian plans $1-billion
foreign purchase
Renews exploration in Newfoundland
CALGARY - PanCanadian Petroleum Ltd. president David Tuer says his company plans to go on a spending spree by pursuing a foreign acquisition exceeding $1-billion and renewing exploration in western Newfoundland.
PanCanadian has a team zeroing in on completing a major purchase overseas within a year that could range from $1-billion to $1.5-billion, Mr. Tuer said after the Calgary-based company's annual meeting yesterday.
He said the North Sea, where the company has some relatively small but promising holdings, is "certainly an area we're looking pretty favourably at."
As part of its shopping trip for an international energy producer, PanCanadian recently opened an office in London.
PanCanadian's initial plunge into the North Sea came last year, when it acquired interests in 22 offshore properties for $55-million (U.S.). This week, it picked up stakes in three British offshore exploration licences near some of its properties.
Mr. Tuer is also counting on western Newfoundland oil fields to become a key asset for PanCanadian, one of Canada's largest oil and gas producers.
No East Coast drilling will be conducted this year by PanCanadian and its partner in Newfoundland, Dallas-based Hunt Oil Co. However, if further geological studies go smoothly, a multiyear exploration program could start in 1999.
While privately owned Hunt Oil has been tight-lipped about its prospects for western Newfoundland, Mr. Tuer said he is optimistic about making a massive discovery both offshore and onshore.
In the summer of 1995, the Hunt-PanCanadian team struck oil onshore during its first drilling project on the Port au Port Peninsula, southwest of Corner Brook.
But two subsequent wells were disappointing, including a $22-million (Canadian) dud last summer. That forced the Hunt-PanCanadian venture to go back to the drawing board, conducting seismic studies last fall to better understand the region's complex geology.
"It was a miracle, really, that in the first well we had a success because it's very, very high-risk exploration," said Mr. Tuer, who is also PanCanadian's chief executive officer. "We'll drill more dry holes. It'll take some time to unlock the secrets of that basin, but we're convinced that the basin has a great deal of potential."
Analysts have speculated that reserves in western Newfoundland could rival the North Atlantic's Hibernia oil field, conservatively estimated to contain 615 million barrels of oil.
Mr. Tuer said numerous geological clues point to the presence of large pools of oil in western Newfoundland, so it's reasonable to expect Hibernia-type reserves.
"We're very excited . . . but it will take a fair number of years just to evaluate the sheer size of the land [two million acres] we've got out there."
Mr. Tuer said PanCanadian's first well near Cape St. George on the Port au Port Peninsula "flowed significant volumes of high-quality crude oil. From that, we know that the basin has all the ingredients you would expect to find in a world-class hydrocarbon basin."
Excluding its planned global acquisition, PanCanadian has budgeted $1-billion on capital spending in 1997, focusing mostly on Western Canada. It is forecasting earnings of $400-million or $3.20 a share this year, compared with $346-million or $2.75 last year. It also expects cash flow to top $1-billion in 1997, as it did last year.
The company had daily production of almost 220,000 barrels of oil equivalent last year, and hopes to double that output by the year 2002.
The lion's share of PanCanadian's oil and gas production currently comes from Western Canada, but it hopes that international properties will contribute about 88,000 barrels, or one-fifth of its project total daily output of 440,000 barrels within five years.
Canadian Pacific Ltd., which maintains its registered office in Montreal but has moved its executive offices to Calgary, owns 87 per cent of PanCanadian.
PanCanadian shares gained 30 cents to close at $55.75 yesterday on the Toronto Stock Exchange. PanCanadian shareholders have approved a two-for-one stock split to take effect in early May.
Besides anticipated drilling in western Newfoundland, the senior oil and gas producer is interested in energy projects in places such as South America and southern Africa. |
