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Marauder Resources Enters Farm-in Pact with Encana Offshore Nova Scotia

Marauder Resources East Coast Inc. has executed a farm-in agreement with Encana to participate in the drilling of an exploratory natural gas well, Dominion J-14, located in the Grand Pre Block, offshore Nova Scotia in the same area as the earlier successful Deep Panuke discoveries.

Robert V. Shields, Marauder Resources president, said the well would evaluate a prospect along trend with six successful wells in the adjoining Deep Panuke area in the shallow water off Halifax. Previous wells all have tested above 50 MMcf/d. Shields said his company had negotiated a 20% working interest in Exploration License No. 2357 after the drilling of the well has been completed, and will have net holdings in the license of 6,423 acres. This replaces an earlier failed agreement under which Marauder Resources would have had a 35% interest.

Shields said he has started looking for a rig to drill the well. Two rigs are working in the area, he said, and it's just a matter of getting on their schedule. In addition to the J-14 location, other leads have been identified on Exploration License No. 2357.

Marauder also owns a 50% working interest in the Balmoral Block, which has a potential drilling location along trend with the Deep Panuke discovery called Wolfville N-32.

The Deep Panuke project, which started with two initial discoveries by PanCanadian in 1998 and 1999 (see NGI, April 3, 2000), has had an on-again, off-again career. In 2003 successor owner Encana, officially put its development on the back burner, withdrawing from its C$1 billion regulatory plan, because the expected commercial production from Deep Panuke was deemed insufficient to support a long-term transportation agreement with Maritimes and Northeast Pipeline. Also, the potential return didn't stack up against Encana's other investment opportunities (see NGI, Dec. 8, 2003).

At the time Encana said it would work on a new plan, possibly sending its gas through the nearby Sable Offshore Energy Project (SOEP). COO Randy Eresman said then the company had considered "a smaller production facility that produces at lower plateau volumes for a longer period of time, thereby reducing the project's capital cost. We've also held preliminary discussions with the SOEP group about the possibility of using existing infrastructure." SOEP reserves haven't held up to expectations and deliverability has declined from that project.

More recently Encana has said it needs to do additional work on scoping out the reservoir potential. Shields said he didn't expect the drilling to be difficult. The location is in water depths of about 50-60 meters and a jack-up rig can be used. He said it remains to be seen how pipeline connections would be made, but "if we thought it wouldn't be produced, we wouldn't be here." He said the location is only two to three kilometers from SOEP's Tivo Platform, and the connecting Sable pipeline, which connects to Maritimes & Northeast going "right through Grand Pre."

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