The Barnett Shale in the Fort Worth Basin may be the most hyped natural gas shale area of North America, but at least one analyst is suggesting that the Canadian Maritimes abundant rock could be the next new thing.

Canaccord Adams energy analyst Irene Haas said she initially focused on finding the "next big shale" in Western Canada, but she was intrigued by the results of two of the first movers in gas shale plays in New Brunswick and Nova Scotia. The Canadian Maritimes, she said, "could be ahead of the pack." The region is "very intriguing" for two reasons, she said: its proximity to the U.S. East Coast, which is the largest consumer of natural gas; and "attractive" royalty regimes.

The work to date by Corridor Resources Inc. and Triangle Petroleum has been cutting-edge" in the Maritimes, and they both have prospective acreage near the Maritimes & Northeast Pipeline. They also are both drilling new wells to test their gas shale concepts.

"In New Brunswick, some of the sub-basins have been subjected to at least five major episodes of basin inversion in the geologic past," said Haas. "This complex history has created a number of big structures and fractured the prospective Horton Group. While early exploration efforts are focused on the big structural highs, we believe that more oil and gas can be found in the more subtle stratigraphic plays, which have been overlooked thus far." Also, "fields are likely to be more 'chopped up,' a successful trend may or may not extend over a large area."

Corridor, with nearly 820,000 net acres in the Moneton Basin, was the "first mover in the emerging Horton Group-Frederick shale gas play" of the McCully field in New Brunswick, Haas noted. And Triangle Petroleum, the first mover in the Nova Scotia Shale play, has "firsthand experience with the Barnett Shale and the Fayetteville Shale..." and its wells to date "hint"at a potentially gas-prone shale in the Kennetcook Basin.

"We are excited about the ongoing exploration efforts in New Brunswick and Nova Scotia," said Haas. "While we believe that it is possible to find multiple Tcf of gas in place in both basins, the plays are still in the incubation and exploration stage, and more wells are needed to prove these play concepts."

The East Coast "will see more gas soon," but it's not too early to plan ahead" for transportation capacity, said Haas. "In our opinion, the U.S. East Coast market could see an increase in supply in late 2008 and early 2009" with new gas from the Rockies Express pipeline, gas from the Barnett, Woodford and Fayetteville shales, seasonal gas from the planned Canaport LNG [liquefied natural gas] Terminal and seasonal gas from other LNG regas facilities.

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