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NOIA Golf Tournament
Thursday, 16 Sep 2010
  
5th International Symposium on Oil and Gas Resources in Western Newfoundland
Wednesday, 22 Sep 2010
  
Maritime Human Resource Conference
Tuesday, 28 Sep 2010
  
Networking Social
Thursday, 28 Oct 2010
  
Member Christmas Reception
Thursday, 9 Dec 2010
  Lorneville Mechanical Contractors
  Martin Industrial Group
  Spatial Energistics Group Inc.
  Weatherford Laboratories
 
NOIA News
Western Newfoundland on the map
 Petroleum activity in Western Newfoundland has a long and storied history, dating back to 1867 when the first well was drilled near Parson’s Pond. The West Coast has seen numerous oil seeps and was, in the 19th century, the site of small-scale commercial production of high-gravity sweet crude from shallow wells.

Roughly 60 wells were subsequently drilled in five prospects before 1974, with shows in more than half. But with little seismic to help identify targets, it wasn’t until recent years that explorers began investigating the area’s potential once again. Now, with several exploration programs ongoing or in the planning stage, international attention is once again turning to this frontier.

In total, Western Newfoundland boasts nine current onshore permits and one production lease, as well as eight offshore licences. Though still very much under-explored, the entire region’s play has been estimated by government and industry sources to have the potential to yield between 2 and 4 billion barrels of light conventional crude.

Onshore Exploration
Garden Hill, on the Port au Port Peninsula, is considered a promising hydrocarbon play based on previous geological interpretation and 2D seismic data. Production Lease 2002-01, held by PDI Production Inc (a wholly owned subsidiary of Enegi Oil Plc) covers Garden Hill North, Garden Hill Central and Garden Hill South.

Garden Hill South (GHS) was discovered by Hunt Oil in 1995, when the Port au Port #1 (PAP#1) well produced more than 2000 barrels a day of light, sweet crude (51° API). Two side-tracks were drilled from PAP#1, the second of which (ST#2) produced oil at a rate of 200 barrels a day during drill stem tests. Production tests from Garden Hill South, prior to re-entry in January 2007, produced over 22,000 barrels of oil.

In January 2007 PDIP re-entered the PAP#1-ST#2 well to perform a series of tests to analyze the reservoir in preparation for production. The well produced at approximately 300 BOPD and 1 MMCFD before being shut in for mechanical reasons. A total of approximately 4315 bbl of oil and 429,000 m3 of gas were produced after re-entry, before the well was temporarily suspended.

PDIP is drilling a new sidetrack from the PAP#1 well (PAP#1-ST#3) beginning this August, using the Nabors Rig 45, previously used by Shoal Point Energy (SPE) to complete the 2K-39-Z Shoal Point horizontal well this year. Enegi commissioned two external reports and one internal report on the horizontal sidetrack, which forecast that the well should produce between 2000 and 2500 barrels a day along with associated gas. Drilling of this well is expected to take approximately 90 days.
 
In preparation for the arrival of the rig, a pressure test was performed on the existing well, PAP#1-ST#2 which had been closed in last year as part of the preparations for the new, horizontal sidetrack. During the pressure test, oil and gas were successfully flowed on various occasions and the well-head pressure returned to its normal level of 15,000 kpa. In light of this, the company will use the rig to clean up the bottom of the sidetrack, which is believed to be blocked and then log the open hole. Once ST#2 has been logged, PDIP will commence the new horizontal sidetrack.

The company is also working this year on a 2D seismic program at Garden Hill North and Garden Hill Central.

Vulcan Minerals is another player working to advance understanding of Western Newfoundland’s petroleum potential. With three Exploration Permits (96-105/106/107) in the Bay St George Basin, the company drilled nine wells between 1999 and 2006. A 2007 2D seismic program collected 60 km of seismic, the largest offroad survey ever completed in the area. The data is being used to pick drill locations for deeper targets in the Hurricane Deeps region.

Patrick Laracy, president of Vulcan Minerals, says the company hopes to begin drilling later this year to a depth of up to 3000 m, making it the deepest well ever drilled in the Bay St George Basin. Vulcan is currently canvassing rig options and is looking to recruit a project manager for the drilling project. Laracy says the company also hopes to drill a couple of shallower wells (1000-2000 m depth) in 2009.

Deer Lake Oil & Gas holds three Exploration Permits (93-103/104/105) in the Deer Lake Basin, which have been the subject of exploration in recent years. The Western Adventure #1 well was drilled in 2000, followed by the Western Adventure #2 in 2002. The company re-tested Western Adventure #1 in 2005. Deer Lake Oil & Gas is now focusing on efforts to secure funding for a multi-well, multi-year exploration program in the area. The company also has interests in the Bay St George Basin and onshore near Parson’s Pond on the Great Northern Peninsula.

Contact Exploration Inc currently holds two Exploration Permits on the Northern Peninsula (03-101/103). Contact drilled the Parson’s Pond #1 well in 2004 and now plans further mapping and evaluation of the area. A drilling deposit was submitted for EP 03-101 to extend the term of the permit to 12 February 2010.

Leprechaun Resources Ltd is a relative newcomer to Western Newfoundland. The company has one Exploration Permit (03-102) for an area north of Parson’s Pond and has submitted a drilling deposit on the property. Their information to date indicates the potential for a three well program.

Offshore
Western Newfoundland also features a number of plays, some of which are best accessed through land-based directional drilling. ENEGI Inc is the holder of an offshore licence north of the Port au Port peninsula (EL 1070). Re-interpreted seismic data has been used to identify a target, with the most recent drilling program taking place this year by operator Shoal Point Energy Ltd (SPE).
The Shoal Point K-39 well, 35 km northeast of the Port au Port #1 discovery, was first drilled in 1999 from a surface location onshore Shoal Point and deviated to test a large offshore structure. Because of sparse 2D seismic coverage in the shallow water near-shore, there was some uncertainty about the exact shape of the fault-bound structural trap prior to drilling. Recent reprocessing and reinterpretation of seismic data concluded that the K-39 well did not test the prospective structure.
To further explore this area, drilling began at Shoal Point on the 2K-39-Z well in March 2008, with drilling and logging operations completed in July. A preliminary interpretation of the logs of the final section of the hole in the St George's Group did not identify economic quantities of hydrocarbons.
 
However, significant shows of gas were encountered while drilling the Green Point shale in the intermediate part of the hole. The section was cased off and a final logging run was conducted.  Interpretation of these logs is ongoing.
 
Drilling the 2K-39-Z well has validated EL 1070 until 15 January 2011. Canadian Imperial Venture Corporation (CIVC), which has a 22.5 % interest in the licence, said following completion of the well that the company will now concentrate its west coast efforts on: reviewing the prospectivity of the St George's Group play in the Shoal Point area; following up on the Green Point shale play lead; pursuing the Lourdes play lead in the north-western part of EL 1070 which is in a different, less complex structural domain than Shoal Point.
 
"We are, of course, disappointed with the results from the St George's Group," CIVC CEO Steve Millan said in a news release. "On the other hand, the Green Point shale results are encouraging and have launched the company into a play type which is achieving enormous interest across North America. The fact that the exploration licence is valid for another three years gives us time to integrate information from the well into an overall program for Newfoundland."
 
Three other companies also have interests offshore Western Newfoundland. B.G. Oil & Gas Ltd holds an offshore license (1102) west of Flat Bay. It has put forth a $406,000 work expenditure bid for the area, which is located in water depths between 70 and 90 m.

Ptarmigan Resources Ltd holds an offshore licence (EL 1069) west of Corner Brook. The company has planned an onshore to offshore directional well for later this year, with permitting of the well already underway.

NWest Energy Inc holds four offshore licences (EL 1097/1098/1103/1104) covering approximately 607,000 ha. The NI51-101 compliant resource assessment has been completed with the company identifying 11 targets within the area. A 3D seismic program covering 900 km² is planned for 2008 using Geophysical Service’s GSI Admiral vessel. NWest has identified 11 highgraded targets within its exploration licence, with a total potential of 3.8 billion barrels. The 3D seismic program will cover several stacked targets ranging from 300 million to 500 million barrels of oil potential. Targets have been identified through detailed analysis of existing 2D seismic and other geological data. Following a successful 3D seismic program, NWest plans to drill its first well in 2009.

Improving the knowledge base

Collection of seismic data has been critical to furthering exploration in this region. Over 1250 line km of 2D seismic has been shot onshore and some 12,000 line km of 2D seismic offshore. This data has added immensely to the knowledge of this area and helped determine more specific drilling targets for exploration.

The Government of Newfoundland & Labrador’s Energy Plan, released last September, has outlined some initiatives to help delineate Western Newfoundland’s hydrocarbon base. The creation of a new Energy Corporation to pursue energy opportunities on behalf of the people of the province is one such initiative.

The plan also commits $5 million over two years through the Petroleum Exploration Enhancement Program (PEEP), to boost new onshore petroleum exploration in Western Newfoundland. An additional $20 million investment over three years has been allocated through the Energy Corporation to purchase existing proprietary seismic data for reevaluation and to acquire new data to fill in existing gaps. Furthermore, a review of the regulatory framework and land management practices has been initiated, along with an infrastructure study.

Increasing interest in the region has also led to the inclusion of four west coast and southwest coast land parcels in the Canada-Newfoundland & Labrador Offshore Petroleum Board (CNLOPB) 2008 land sale. The CNLOPB has offered up two parcels in the Port au Port Region (Call for Bids NL08-04) and three parcels in the Sydney Basin off the south coast (Call for Bids NL08-03). Interested parties will have until 4:00 pm on 28 November 2008 to submit sealed bids for these parcels.

Marketing the Potential
West Coast business leaders have recognized the need to market Western Newfoundland’s potential to the world. The 3rd International Symposium on Oil and Gas Resources of Western Newfoundland, scheduled for 13-15 September 2008 at the Humber Valley Resort, will provide participants with the opportunity to meet representatives of research institutions, current landholders and energy officials and to encourage increased exploration.

Some of the most prominent players in eastern North America will present their latest insights into the petroleum geology of Western Newfoundland, assisting in efforts to attract investment and exploration partners to this new exploration frontier. This year’s Symposium will include international, national and local petroleum players as speakers and delegates. As in previous years, local oil and gas companies will have the opportunity to exhibit their businesses in the EXPLO area. For additional information, visit: www.wnloilandgas.com.
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