Hi Buckey;
Here is an article by Wes Reid from the Dec/99 issue of OilWeek which features oil exploration on Nfld's West Coast...good reading:
Atlantic Canada Returning East
Promising oil finds give Newfoundland a touch of Alberta?s attractions
Go west, young man, and grow up with the country. That famous advice originated with a 19th-century American: Horace Greeley, founder of the New York Tribune. It has been followed for generations in Newfoundland, often out to Alberta. But the tables may be turning, thanks to a movement east by the oil industry.
PanCanadian Petroleum Ltd. and Hunt Overseas Operating Co. in 1995 drilled a land discovery on western Newfoundland?s Port au Port Peninsula. This led a farm-in deal for home-grown Canadian Imperial Venture Corp. to earn an interest in the properties by working on beginning production sometime in 2000. The deal stirred optimism in Newfoundland. Patrick Laracy, president of Vulcan Minerals, says ?it?s just a matter of time before someone finds something here. It?s not a question of if, it?s a question of when.? Laracy belongs to a crop of aspiring oil men planted when Newfoundland?s John Crosbie played a role in convincing his peers in the former Conservative government in Ottawa to help the Hibernia oil project offshore. The lobbying ?went on for years during most of the ?80s and into the ?90s while I was minister of justice - and let?s see, minister of transport, minister of international trade and finally minister of fisheries. It was probably the catalyst needed to bring about the growing oil industry we have here in Newfoundland today.? Offshore operations have created a service sector and facilities that make oil initiatives on land less expensive, hence more accessible for junior firms.
Newfoundland?s international exposure as a place with oil potential also gives smaller exploration and development enterprises and edge in raising capital. Phonse Fagan, a geophysics consultant for the Newfoundland mines and energy department, says ?before Hunt and PanCanadian spudded in 1995, we had to advertise about western Newfoundland?s geology being conducive to oil discovery and productivity to get exploration and development companies interested in buying parcels of land. Sure, you could see oil seeping from the ground all over the place out there, but until then nobody seemed very interested. Different story now, though. After the 1995 discovery we had the media all over us ... even the New York Times. Companies were buying permits and parcels of land and all the positive speculation made it easier for junior companies to get involved, to get financial backing.? Another plus for the new firms is that land prospects are much cheaper than offshore work. The land drillers do not have to contend with ice packs and icebergs or sink colossal investments into offshore production systems.
A computer, on-line database featuring the latest seismic surveys also helps Newfoundland companies. The large concerns like Hunt take seismic surveys for their own purposes and then have to pass them on to the provincial government. It makes the surveys available on its web page free to smaller firms.
Four home-grown junior oil companies have jumped on these advantages by hunting for oil along a triangle of western Newfoundland that encompasses more than two million acres of land. Until a few months ago, activity was confined to the region?s Ordovician sediment. It is older than Carboniferous rock (Newfoundland has some of the world?s oldest rock formations), yet can contain oil in sufficient quantity and quality to be profitably extracted. Vulcan Minerals, a junior with a listing on the Alberta Stock Exchange, is drilling in a Carboniferous basin near Flat Bay on the Port au Port Peninsula. The plan is to exploit shallow basins. Laracy explains ?shallow basins are less expensive to drill.?
The strategy is working. Last October, Vulcan found oil at its Flat Bay #1 well. it penetrated more than 100 metres of oil-bearing formation, and geophysical logs show several zones with commercial potential. Vulcan suspended drilling to seek partners and financing. About three kilometres northeast of Flat Bay lies another basin about to be drilled by Vulcan.
These big hopes began years ago with one single, little but still highly ambitious Newfoundland company that made itself into a pioneer of land oil activity. Why did this firm - Deer Lake Oil and Gas, and founder Cabot Martin - keep on searching when much bigger companies quit? Why did other independents and snatch up permits the international corporations were allowing to expire? Watch for the next Atlantic Update in Oilweek.
-Wes Reid |
