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.