Black Spruce Exploration forging ahead: president

Looking to drill on exploration licence offshore western N.L.

Ashley Fitzpatrick
Published on June 20, 2014
David Murray, president & CEO, Black Spruce Exploration, prepares to speak at the NOIA conference in St. John’s Thursday.
— Photo by Keith Gosse/The Telegram

The Noia conference looked away from the Jeanne d’Arc Basin, the Flemish Pass and other distant offshore areas and turned, Thursday afternoon, to considering the potential in western Newfoundland and Labrador.

President of Black Spruce Exploration, David Murray, was given the opportunity to lay out his company’s plans and prospects on the same day as larger oil companies and now conference regulars: Statoil, Chevron and Husky Energy.

The spot was earned, given the consolidation of western oil and gas licences and land area completed by Black Spruce Energy. As The Telegram reported at the 2013 conference, and Murray reiterated at the podium inside the St. John’s Convention Centre, the company is looking to be a steady hand in moving the oil sector forward in the western region.

“Really (western Newfoundland oil) is a story that is not well known and, I think, very similar and reminiscent of when Hibernia was trying to get going back in pre-production 1997 and there was a great deal of skepticism and doubt about the opportunities that existed in Newfoundland,” he said.

Since its start in 2012, Black Spruce has secured nearly two million acres of land, evaluating exploration opportunities through onshore drilling, onshore-to-offshore drilling and offshore drilling.

The company was in the midst of debate within the province around the use of fracking in onshore drilling operations. However, its current plans do not include fracking operations.

And it has not, since before the provincial government instituted a moratorium on the use of fracking in onshore operations in November 2013.

Natural Resources Minister Derrick Dalley, following his own address at the Noia conference, said a gathering and analysis of information relevant to fracking policy has been completed by officials within his department.

“I want to do some review of that first, obviously, and then we’ll move to the next stage. I’ll have a discussion with my cabinet colleagues,” he said.

From there, the minister said he will need to hear from proponents of projects using fracking and also from the public. No decision has been made as to exactly how or when the next steps of the fracking review will proceed.

“I’m not going to spend much time on the unconventional, because again, with the current study being reviewed on shale oil, there’s not much point in discussing something that can’t be pursued at this time,” Murray said in his Noia presentation, reflecting his company’s desire to move forward with other work.

Looking at conventional wells, without fracking, Black Spruce secured access to three of Enegi Oil’s licence areas, under a deal closed in 2013, including near the Garden Hill site on the Port au Port Peninsula, where Enegi has an onshore well that has produced oil.

At the end of 2013, Black Spruce stated it hoped to drill at Garden Hill as early as April of this year. In response to questions on the spring program, Murray said there is now a later start time for that piece of work, but it is still expected this year.

“It’s, as you know, jointly owned. So there’s some parts that our partner, Enegi (Oil) has to complete that are not completed,” he said. “Until it’s what’s called drill-pad ready, we wouldn’t move the rig in, because we had planned to move it now and it just would have been sitting there. I would rather keep it in a different environment until we’re drill pad ready.”

The company is also looking to its offshore exploration licenses.

“We want to drill a well in (EL)1070 and (EL)1120 as regulatory approvals allow,” Murray told his Noia audience, with a slide stating the hope is to move forward in 2014-2015.

The area covered by the exploration licence known as EL1070 is off the Port au Port Peninsula. “Until there’s clarity as to what’s happening with hydraulic fracturing, we can’t do anything in (EL)1070,” he said, following the presentation.

As for EL1120, just north along the coast, he said, the public can expect to see further information when the company files a project description and the regulatory review process moves ahead. Company vice-president Derek Sullivan said the hope is to make that submission by mid-July.

The province knows, he said, of the company’s intentions to advance plans for exploration in the area.

“They’re aware of it, what we’re doing. We’ve submitted, but we had to figure out — before we went to the province — we had to figure out first: is it the CNLOPB we’re dealing with, or is it CEAA we’re dealing with? Now we know it’s the CNLOPB and now we can go back and at least tell the (Department of Natural Resources) that,” he said.

Murray said he is confident the company will be able to get things underway before the end of 2015.

Of note in the Black Spruce story, The Telegram — this reporter — stated in an article early Wednesday an update had been sought from Black Spruce Exploration on the drilling program at Garden Hill prior to the conference, with no response. However, not all contacts for the company were tried.

Murray and Sullivan said the earlier messages were not received. They freely offered information in response to any and all questions following the conference session.