Well, well — not well

Moira Baird
Send to a friend

Send this article to a friend.

Nalcor and partners drop plans to drill third well at Parsons Pond

The Seamus No. 1 exploration well drilled last year at Parsons Pond by Nalco Energy.

Nalcor Energy and its partners have abandoned plans to drill a third exploration well at Parsons Pond on the province’s west coast.

Nalcor said its share of the drilling and testing costs for two onshore wells is about $23 million — up from the original estimate of $14 million when the three-well program was announced in 2009.

To date, the entire program has cost the five Parsons Pond partners about $30 million — up from the originally estimated $20 million.

“The main reason why the costs have escalated is because what we thought were 50- to 55-day wells have turned into 90- and 100-day wells,” said Jim Keating, Nalcor’s vice-president of oil and gas.

“We had to weigh the value of spending more money in drilling at that particular location versus the amount of new data that we’d get, and we found that the chance for additional data was fairly low.

“We decided to take a time-out and re-evaluate our position.”

Nalcor and its four partners found shallow gas — but no oil — in the first two wells dubbed Seamus and Finnegan.

Darcy was to be the third well.

Keating said the Darcy well would have been located between the first two wells.

“It’s clear at that location we weren’t going to have any difference in the results.”

The Parsons Pond area is known for oil seeps that bubble up through the ground.

Nalcor and its partners didn’t find the source of those seeps.

“We believe the area, as a whole, is gas-prone,” said Keating.

He said the area is also prone to hard rock at depths of 3,100 metres and numerous faults — making it tough to drill through.

Those faults also make it difficult to track the source of oil seeps that could flow from any fault and from any direction.

“We know where it’s not coming from,” sad Keating.

“It could come from some place else. So the story continues and this is just the first page.”

Keating said the next step is evaluating the well data collected and cross referencing it with seismic survey data collected both the onshore and offshore.

The goal is develop a strategy for the entire region.

“That could take some time,” he said.

“We will look at every well that data exists for and is readly available, start to tie it together and build a full picture of what’s going on in the west coast.”

Nalcor has an average 67 per cent working interest in the Parsons Pond exploration project.

Its partners are Newfoundland-based Vulcan Minerals and Deer Lake Oil and Gas, along with Leprechaun Resources and Investcan Energy.

mbaird@thetelegram.com

Organizations: Nalcor Energy, Vulcan Minerals

Geographic location: Parsons Pond

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Proud NLer
    March 06, 2011 - 12:29

    FYI, Alberta drilled hundreds of wells before it finally hit pay dirt. The west coast of NL is no different and more difficult actually to pin point due to the faults being drilled through. This business is not a slam dunk as to exactly where the oil is. Patience for those of you who think so. If Alberta had given up after a few wells where would they be today. There is a very good reason to be more positive and patient and less quick to condemn those involved in the search for west coast oil/gas.

  • David
    February 19, 2011 - 16:46

    ...and why exactly is this story in the Business section? It has not one business element to it. It is purely a political story, complete with wasted taxpayer money, total unaccountabilty, missed budgets and cost overruns, and nothing achieved...heck, I'll bet NALCOR will even go on a hiring binge!

  • mom
    February 19, 2011 - 12:40

    At least they quit before pumping more money into a hole in the ground. Oil exploration is an important part of our economy. We have to think about future revenue.

  • David
    February 19, 2011 - 11:40

    Forget the waste of money...that was a given when it was announced. The real damning issue is that, after using taxpayer money to help "jumpstart" exploration by other companies, NALCOR has now come out and said that it believes there's no point in continuing, that a third well would likely have the same result.....well, thanks a lot! That should really help get the ball rolling, right? If NALCOR didn't have the sense to budget enough to drill 3 wellls (which they did not), and if they did not have enough the corporate courage and fortitude required to be in the exploration game longer than that, then they had no business whatsoever doing it. That's exactly why oil companies find oil and governments do not. Shame on us ....... again.

  • Brad Cabana
    February 19, 2011 - 07:13

    Where is ex Minister Kathy Dunderdale's accountability? She was the Minister that arranged all this. Just like Abitibi. Now she's in charge overall, and the Lower Churchill is next. You know it's getting bad when you hope the PM steps in and stops the lunacy.The $23 million lost to the air could have bought three world class air ambulances for rural NL, or built atleast one or two new schools etc..Yet we are told these things must be rationalized. Rationalize the services to the people, but spend like drunken gamblers for their business buddies. The stench of dictatorship wafts all over this province, and we must put an end to it.

  • Tim
    February 18, 2011 - 13:12

    I always knew that our former premier Mr Williams was not very smart with someone elses money; not even the billions he got from Paul Martin. I am glad he has removed himself from being our premier before we had to remove him at the ballot box. The results of his last poll told him his term was up so we wonder why he jumped ship.

  • gerard
    February 18, 2011 - 11:40

    Nalcor don't mind wasting money because when expremier Danny watched the backs of ABitibi's heads as the left GFW , he expropriated the hydro golden goose and handed her to Nalcor , according to the website Municipal matters .com , this golden goose is good for at least 60 million a year ,and that's minimum every year , now do people realize why Abitibi was allowed to close up shop in GFW and why after two years there is no other forest industry opperating there .. Hydro money for Nalcor and the valuable blackspruce fibre going to Kruger papermill in Corner Brook...

  • Willi Makit
    February 18, 2011 - 07:41

    $23,000,000. That's a lot of coin to be wasting drilling holes in the ground with the faint hope of pulling a Jed Clampett. How many social programs could that money have funded? How many other government agencies could run $9,000,000 over budget without even a hint of concern from the responsible ministers? It's a good thing that other governments put the oil deals in place before this crowd came along. If we were depending on the great PC Party to fund their own wasteful spending, we'd be in the poorhouse in no time.

  • Mr. Juannabee
    February 18, 2011 - 07:29

    Seamus and Finnegan. Didn't they used to be on Mr. Dressup? Appropriate, since Nalcor seems to have emptied the tickle trunk on this venture.