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EnCana Teams With Marauder to Explore Offshore Nova Scotia Again

EnCana Teams With Marauder to Explore Offshore Nova Scotia Again

Borrowing from the old adage "If at first you don't succeed try, try again," EnCana Corp. has teamed up with Calgary-based independent Marauder Resources East Coast Inc. to explore and produce natural gas offshore Nova Scotia.

Marauder said last week that it has executed an agreement with EnCana to participate in the drilling of the Grand Pre exploration well, a shallow well that is expected to evaluate a prospect along trend with the Deep Panuke natural gas discovery.

As operator on Grand Pre, EnCana said it expects to commence operations on or before Sept. 30, 2005, subject to rig availability. In addition to the prospect to be drilled, other leads have been identified in the area.

"Part of our new plan is getting additional understanding of the reservoir and reserve potential," said EnCana spokesman Alan Boras. "We have drilled a couple of wells that were successful previously and we have talked about doing a couple more in 2005. This is one of those. This is an exploration well in the vicinity that is looking to evaluate another part of a potential nearby structure, which could be rolled into the potential for Deep Panuke. Marauder has joined in that effort with some investment."

Marauder will earn a 35% working interest in the Grand Pre well after the drilling of the well has been completed, and will have net holdings in the license of 11,240 acres. Marauder also owns a 50% working interest in the shallow rights in Production Licenses (PL) 2901 & 2902, along with the deep rights on a portion of PL 2901 offshore Nova Scotia. Marauder's net holdings in these blocks is 9,192 acres.

The agreement to explore in the Deep Panuke region will come as welcome news to Northeastern U.S. and Atlantic Canadian gas markets. Production from the Sable Offshore Energy Project has not met expectations and there has been little positive news regarding future supply from the region.

EnCana requested a regulatory time-out early in 2003 because of the uncertainty of Panuke's reserves and the market (see NGI, Feb. 17, 2003). Reserve calculations indicated that the project would yield up to 1 Tcf of gas reserves and produce 400 MMcf/d, but would be incapable on its own of shouldering the cost of long-term pipeline transportation to markets in the Northeast (see NGI, March 8). As a result, EnCana withdrew its development plan, and said it would submit another plan at a later date that might involve piping offshore gas to facilities of the nearby Sable project (see NGI, Dec. 8, 2003).

The region's viability took another hit in August when Marathon Oil Corp.'s Canadian subsidiary announced that it was permanently abandoning a deepwater wildcat natural gas well offshore Nova Scotia. Marathon said it failed to find any commercial quantities of oil and natural gas (see NGI, Sept. 6). When Marathon first discovered gas in the Annapolis block in 2002, it had estimated there could be between 5-15 Tcf of natural gas within the play. Canadian Superior and El Paso also ran into trouble with cost overruns at their Mariner project earlier this year and had to halt drilling (see NGI, March 15).

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