Companies target west coast

Moira Baird
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CIVC and Shoal Point Energy aiming to spud a new well by December

Shoal Point Energy and Canadian Imperial Venture Corp. (CIVC) have an oil target on the province’s west coast, a drill rig en route and a tight deadline.

The partners outlined a $4.5-million, one-well drilling program on the Port au Port Peninsula at CIVC’s annual shareholder meeting Thursday in St. John’s.

The total cost of the project will be $6.5 million, including geological studies and meeting regulatory and environmental requirements.

The companies aim to start drilling by late November or early December — as soon as the rig arrives from the mainland.

To drill the well, St. John’s-based CIVC and Calgary-based Shoal Point Energy sold a portion of their stakes in the exploration property to an Alberta drilling company, Dragon Lance Management Corp.

“We financed this one somewhat unconventionally,” George Langdon, CEO of Shoal Point Energy.

“Our drilling partner’s actually paying for the well.”

Langdon isn’t setting a date to spud the well, but estimates it will take about three weeks to drill.

On Thursday, Dragon Lance sent word to CIVC the rig was damaged while trucking it to the province.

“It will have to be repaired and recertified, but we’re pretty confident we’re going to make that deadline,” said Steve Millan, president and CEO of CIVC.

The deadline facing the partners is Jan. 15, 2011 — that’s when the second term of their offshore exploration licence expires.

Known as EL 1070, it was issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB).

Although the licence covers the seabed adjacent to the Port au Port Peninsula, horizontal drilling will take place onshore at Shoal Point.

It’s a narrow strip of land jutting out into Port au Port Bay, dividing it into east and west.

The discovery well drilled in 2008 — known as 2K-39 — extended into the western side of the bay and toward the Green Point formation.

The new well — dubbed 3K-39 — will head in the same direction.

Millan told CIVC shareholders an independent assessment estimates 5.2 billion barrels of oil in place at the Green Point formation.

The new well will firm up potential reserves and determine how much oil could be economically produced.

“You need to have 90-per-cent certainty and you need to know it’s producable with existing technology,” Millan said.

“We should be able to establish at least minimal reserves.

“One well won’t prove up the whole bay … but it will supply enough confidence in the resource that raising money will be a lot easier, or possibly bringing in large partners will be a lot easier.”

He said any drilling success will depend on good geology, foresight and luck.

The partners are applying to the CNLOPB for a significant discovery licence.

“It’s going to be based on this well,” Langdon said.

“We’re actually in the process now of preparing that application, and we’ll supplement it with information from the well once it’s drilled. We’ll put our best geologic case forward.”

Both companies describe their 2008 discovery as an unconventional oil-in-shale play.

Langdon said producing oil from shale rock is similar to producing natural gas from shale using hydraulic fracturing.

Known as fracking, water and chemicals are pumped into the ground at high pressure to crack the rock and produce the natural gas.

“They’re doing liquids, too,” Langdon said. “From everything I’ve read we can almost, as effectively, from very, very small … spaces between the grains produce oil as well as gas. That’s a very exciting thing for us.”

mbaird@thetelegram.com

Organizations: CIVC, Shoal Point Energy, Canada-Newfoundland and Labrador Offshore Petroleum Board Point Energy and Canadian Imperial Venture Dragon Lance Management CIVC.The

Geographic location: Alberta, Green Point, Port au Port Bay

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Recent comments

  • Wins.
    November 04, 2010 - 18:06

    H i Someone has to take a gambleor we would not have ofshore Drilling Rigs of ourShore

    • WINS LOSES BIG TIME
      November 08, 2010 - 08:33

      Better you then me Wins...gambling is fine, throwing away your money on the other hand is stupidity. I would advise you to change your name to LOSES

  • Richard
    October 27, 2010 - 10:53

    Good luck cqv - they have already established 500m of pay in the first well A good frac program could open up a lot of pay zone As for producing this well - you could produce the oil and re-inject the gas into the first well and maintain reservoir pressure - should their be any need for power in that area their are turbines that run off solution gas that is scrubbed from the oil produced - no need to flare any solution gas - lets get that rig repaired and this well spudded ASAP-

  • John T
    October 26, 2010 - 08:21

    Are they pumping up interest in there stock? absolutely. are they prospecting for oil. you bet. before leduc#1 was brought online in alberta they drilled 133 dry holes. invest if your willing to share the risk. eventually there will be a deposit found that is economically viable to produce. with out companies drilling and prospecting there will be no potential reserves discovered. do ceo's of these companies make money if stock rises of course. all who invest do. Fracking has been going on for a long time it is used to stimulate formations . the fluids used for most part are highly regulated . they are injecting at high pressure to phyiscally fracture the rock. this is done only to start or stimulate production it's not an on going process. much of this fluid and chemicals are recovered as the well flows back to service a long with the recovered hydro carbons. using those shallow gas and sour gas stories from alberta is fear mongering. what is some times a natural process. when a water well passes through zones that might contain gas or the ability to flow gas/migrate into the well bore of that water well.

  • Wayne
    October 22, 2010 - 21:27

    I hope you all don't eat your words. What kind of fools would say a potential of 5.2 billion barrels driving up their stock with dry well. I say something is there but what. You can't inflate your stock i don't think on speculation. I have no idea about how the stock market works.

  • John Smith
    October 22, 2010 - 15:55

    You have to give these guys a tip of the hat. One of the best scams I've seen in a long while, congratulationsguys, hope you have another 15 years of coning the gullible.

  • scott
    October 22, 2010 - 15:00

    Good luck boys. There is oil there for the taking as it has been coming out of the ground since the 1600 hundreds when settlers came over here from Europe. So it is just a matter of finding it. Maybe they need better research to help them find it but there is indeed oil down there. CQV don’t have the big money of larger companies have to help them find OIL but they will find it after a while. Good things always come to those who have unwavering perseverance. Good luck boys!!! I know just North West of you guys there is more oil reserves than there is off the Grand Banks. Wish you all the best.

    • Propaganda at its best
      October 25, 2010 - 08:50

      Yet another scam by a company full of weightless and worthless promises. I would seriously advise people to look for the facts here...and I mean the real facts, not the propaganda that is seen here in this article...CAUTION PEOPLE!!

  • Sean
    October 22, 2010 - 13:23

    Thanks for explaining "frack", but you should explain "spud." If spud means drill, why don't you just say drill, so everyone knows what you mean?

  • Frank
    October 22, 2010 - 11:54

    " Known as fracking, water and chemicals are pumped into the ground at high pressure " People in this area would do well to be cautious. What chemicals does this company intend to use to explode the underground rock formations? Fracking has had disastrous environmental effects on the aquifer in other areas. The companies doing the "fracking" hide behind proprietary rights to keep the information about what toxins they are injecting into the land. How can a government accept the results of an environmental assessment if it doesn't know what the fracking fluid is made of? Watch the documentries "Gasland" by Josh Fox and "Burning Water" by Cameron Esler and Tadzio Richards to see the results of this "fracking" process.

  • Ken
    October 22, 2010 - 11:44

    CIVC has been exploring for 15 years without any commercially viable success. Now one of their creditors is buying into the project. I'll save my pennies for another venture gentlemen.

  • Mike
    October 22, 2010 - 09:37

    Mark, A public company is required to update the shareholders of their activities. What they are doing here is required by securities laws. It's called disclosure and transparency. While I said above the general public for the most part supports development, there is also a small town behavior of hating to see their neighbor get ahead. Sounds like you are jealous. If you have gotten burned in the past that is your own fault for not researching the stock and understanding the risks.

  • Mark Murphy
    October 22, 2010 - 08:48

    This is deja-vu with these guys. They just got their stock options approved so now they're pumping the media so more poor souls buy their worthless stock.

    • scott
      October 22, 2010 - 14:58

      Good luck boys. There is oil there for the taking as it has been coming out of the ground since the 1600 hundreds when settlers came over here from Europe. So it is just a matter of finding it. Maybe they need better research to help them find it but there is indeed oil down there. CQV don’t have the big money of larger companies have to help them find OIL but they will find it after a while. Good things always come to those who have unwavering perseverance. Good luck boys!!! I know just North West of you guys there is more oil reserves than there is off the Grand Banks. Wish you all the best.

  • Mike
    October 22, 2010 - 08:40

    I love these guys. This is capitalism at its finest. I hope the risk they are taking ultimately makes them rich. This is the sort of venture the government needs to encourage buy getting out of the way and letting these companies raise capital and take risk. Newfoundland has a great electorate in that most people welcome and support this activity. Something the government needs to learn because they do everything to repel and discourage this activity by changing the goal posts as soon as oil is discovered. Good luck guys, hope you strike the mother load while the premier at the same time learns to back off.