It may not be fracking, but Black Spruce Exploration will go ahead and drill standard wells if it means it can begin the hunt for oil in Newfoundland and Labrador.
The company has committed to obtaining all required permits for its work and, according to company representatives, that work could start by mid-October if the required permitting goes smoothly.
Black Spruce has agreements in place allowing it access to much of the exploration area in western Newfoundland. It has just closed a deal with Enegi Oil — based in Manchester, U.K. — providing access to three of that company’s licence areas, including near the Garden Hill site on the Port au Port Peninsula, where Enegi has a well that has produced oil.
Black Spruce will have 100 per cent control over a planned multi-well drilling program.
“We have decided ... it would be in the best interest of all stakeholders to drill at least one well on (the licence area) this year after the (Black Spruce drill) rig arrives in western Newfoundland this coming fall,” Black Spruce Energy CEO Dave Murray stated in a news release.
“Having already invested upwards of US$25 million in purchasing a drill rig, piping and associated equipment, we believe this course of action has the highest potential for realizing revenues in the shortest period of time.”
Black Spruce vice-president Derek Sullivan told The Telegram his company will select an exact location for its first well in the area and will file for environmental assessment in the coming weeks.
“Our intention right now is to drill that as a conventional well — no hydraulic fracturing,” he said.
The provincial Department of Environment confirmed no proposals to engage in controversial fracking operations in western Newfoundland have been submitted by Black Spruce Exploration, or any other operator.
Sullivan said his company is not ruling out fracking wells in the future, but will focus for now on importing rigs and getting active with standard wells in western Newfoundland.
Sullivan said the in-depth discussions between Black Spruce Exploration and Enegi Oil allowing for the new plans began back in May, with the leadership team from Black Spruce making two subsequent visits to Enegi offices in Manchester — one to sign a letter of intent to explore potential partnerships and one as some due diligence on the agreement was completed.
Black Spruce is still in the process of prepping and shipping a rig from Houston for drilling. The company will also bring in a second, somewhat smaller, service rig, Sullivan said. That second rig has yet to be secured.
The company has a partnership agreement with Ptarmigan Energy and a farm-in agreement with Shoal Point Energy for other areas on the island’s coast.
On Shoal Point Energy, Sullivan said his company has been in discussions with the new management, but not regarding Shoal Point’s recently announced, revised financial filings.