Nalcor hits gas at Parsons Pond

Moira Baird
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Testing this summer will quantify 'gas show' on Northern Peninsula

Nalcor Energy Oil & Gas has wrapped up drilling at its first well on the Northern Peninsula - and so far the Parsons Pond results look promising.

Both Nalcor and one of its four partners, Vulcan Minerals Inc., reported "gas shows" in the well dubbed Seamus No. 1.

Above, the Stoneham drilling rig that wrapped up work at the Seamus No. 1 well last week. Below left, a drill crew for the Stoneham Drilling Rig 11 at work on the Seamus No. 1 well. Nalcor says 80 per cent of the drill crew are from the province's west co

Nalcor Energy Oil & Gas has wrapped up drilling at its first well on the Northern Peninsula - and so far the Parsons Pond results look promising.

Both Nalcor and one of its four partners, Vulcan Minerals Inc., reported "gas shows" in the well dubbed Seamus No. 1.

Flow tests will be carried out this summer to quantify how much natural gas is in place.

"As we drilled down, we did encounter gas. It's difficult to comment on the nature of the flow characteristics or the volume of that until we test," said Ed Martin, president and CEO of Nalcor.

"There's two zones specifically we're going to test."

Seamus No. 1 is the first of a planned three-well, $20-million exploration program on the Northern Peninsula.

Martin said gathering geological and reservoir information from the Parsons Pond area was the project's main objective from the start.

"It gives us a good picture of what's down there and confirms our analysis techniques, which is great."

Nalcor will use a smaller, less expensive service rig to do the test, while its larger drill rig moves to its the next well, Finnegan No. 1. Preparations on the second well are expected to begin in late June.

The gas show was good news for Vulcan, which holds an average 10 per cent working interest in Parsons Pond.

"Anytime you drill a wildcat well and you find hydrocarbons that are worth testing, you have to be excited," said Pat Laracy, president of Vulcan.

"Let's face it - your odds are greater than 90 per cent that you're going to end up with a dry hole."

He said the significance of the gas show won't be known until it's properly tested.

"We'll take the lead of the operator on this, and they're wanting to test it this summer. We'll certainly be participating in that."

Known for oil seeps that bubble to the surface and wells that have been drilled since the late 1800s, the Parsons Pond area is considered oil-prone.

"There's been gas intercepted in some of the historic drilling at Parsons Pond as well," Laracy said.

"We knew that there was potential for some gas."

At 3,160 metres, Seamus No. 1 went deeper than others drilled in the Parsons Pond area.

"These are early days," Laracy said. "This is the first well ever drilled deep in this area, so all the information that we've gathered here is brand new."

Natural Resources Minister Kathy Dunderdale told the House of Assembly Wednesday more than $1.6 million was spent on local goods and services during the drilling of Seamus No. 1.

She also said Nalcor received environmental approval for its third well "and is making the appropriate adjustments to its drilling schedule to accommodate the attached conditions."

The third well, Darcy No. 1, requires an access road to reach the drilling site. Nalcor expects to begin road construction on the five-kilometre road by mid-summer and drilling in the fall.

As part of its environmental approval the company must show how it will reduce the impact of construction and drilling activities on woodland caribou in the area.

The company said it will submit that environmental protection plan to the province in the coming weeks.

Nalcor must also regularly monitor caribou.

Martin said the company is working closely with the provincial environment department.

"We're generally on the same page with respect to being environmentally sound," he said.

"It has lengthened the program in terms of when we would complete the well. But, as far as a cost impact, it's fairly limited because the rig will come off-hire in between (wells)."

Martin expects the drilling program to come in close to budget.

"But $20 million is still a good number, give or take 10 per cent. So, we're in that neighbourhood certainly."

Nalcor holds an average working interest of 67 per cent in three onshore exploration permits on the Northern Peninsula.

Its other partners are Leprechaun Resources Ltd., Deer Lake Oil and Gas Inc. and Investcan Energy Corporation.

mbaird@thetelegram.com

Organizations: Nalcor Energy Oil & Gas, Vulcan Minerals Inc., Leprechaun Resources Deer Lake Oil and Gas Investcan Energy

Geographic location: Parsons Pond, Northern Peninsula

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Recent comments

  • David
    July 02, 2010 - 13:23

    Let's face it - your odds are greater than 90 per cent that you're going to end up with a dry hole.

    Hey, Pat....there's almost a 10% chance that your going to get a commercial well in Parson's Pond? Is that what you're saying? Really?

  • Pierre
    July 02, 2010 - 13:15

    Huge hit by Danny Williams!

  • I C Clearly
    July 02, 2010 - 13:10

    'Encountered gas'? Gas deposits were discovered on the Port au Port Peninsula years ago and there's no sign of interest to develop that. Heck, Tatham offshore had a plan to land the significant gas deposits in our offshore oil fields to land but the economics didn't work out. Mark that 'oil' well and the cost to drill it as a failure. What a waste of $14 million dollars of tax money.

  • David
    July 01, 2010 - 20:07

    Let's face it - your odds are greater than 90 per cent that you're going to end up with a dry hole.

    Hey, Pat....there's almost a 10% chance that your going to get a commercial well in Parson's Pond? Is that what you're saying? Really?

  • Pierre
    July 01, 2010 - 19:55

    Huge hit by Danny Williams!

  • I C Clearly
    July 01, 2010 - 19:46

    'Encountered gas'? Gas deposits were discovered on the Port au Port Peninsula years ago and there's no sign of interest to develop that. Heck, Tatham offshore had a plan to land the significant gas deposits in our offshore oil fields to land but the economics didn't work out. Mark that 'oil' well and the cost to drill it as a failure. What a waste of $14 million dollars of tax money.