Hi CIMA;
Here is a very recent feature article on Vulcan Minerals (VUL-C) Flat Bay #1 well drilled during the past month.
9/17/99
By CHRIS FLANAGAN Business Editor
St. John?s-based Vulcan Minerals Inc. (ASE:VUL) has encountered oil in its shallow well about 30
kilometres east of the Port au Port Peninsula on Newfoundland?s west coast, the company
announced Thursday.
The reservoir, which extends to a depth of only 286 metres, is not under enough pressure to cause
oil to flow to the surface, Vulcan president Patrick Laracy said in an interview, but has the potential
to produce small amounts of oil.
The company?s release describes the finding as ?oil shows over a gross interval exceeding 100
metres,? and the ?recovery of live oil in the drilling fluid.?
?It?s fantastic. It?s absolutely mind boggling,? Laracy said in an interview Thursday. ?This results tells
us there?s a significant amount of oil at shallow depths in the northern part of the basin. Whether or
not the Flat Bay No. 1 is commercial is yet to be determined. I think there is a chance, the only way
we can find out is to stimulate the reservoir.?
The result is encouraging, said Memorial University earth sciences professor Elliott Burden, but it?s a
little early to pop the champagne corks.
?Until you know more about the geology then you?ll never know (if you can produce oil here),? said
Burden, who has studied the region for more than a decade. ?It?s still very, very much in the early
stages.?
But Flat Bay No. 1 does mark the first time someone has gone out in search of carboniferous-age oil
in Newfoundland and found it, Burden said. The oil here is of a younger age than oil associated with
Hunt Oil/PanCanadian Petroleum?s 1995 discovery at Garden Point on the Port au Port.
Laracy points to similar wells in Alberta, Ontario, Pennsylvania and other onshore areas. In many
cases, operators pump a mixture of sand and drilling mud into the reservoir to increase pressure and
produce in the range of 20 to 50 barrels per day.
It?s not a lot of oil, Laracy admits, but if a small operator has dozens of these shallow wells, money
can be made ? particularly when oil is selling at more than $20 a barrel.
Vulcan Minerals? next step is not to go into production. Laracy wants to drill another structure ? the
St. George?s Arch at about 1,000 metres ? where there is potential for greater reserves and higher
flow rates.
And that?s a target, Burden likes.
?That structure they?re talking about drilling is a target that I?ve always found interesting,? Burden
said. ?I?ve seen it on geological maps for 20 years now.?
Despite the small scale of this latest west coast Newfoundland oil encounter, economic potential is
high if the regions pan out, Laracy said.
?With the results that we have here and the results that we?re going to get from our next well, you
could just drill these things non-stop, and then you have an onshore drilling business,? Laracy said.
?The spinoffs are very beneficial to the local economy because the small guy can get a piece of the
local action, unlike the offshore.?
Vulcan?s next step is to seek joint venture partners or raise exploration money by issuing new stock,
Laracy said. |
