Corridor Resources Inc. has begun the approval process to drill an exploration well on the Old Harry prospect in the Laurentian Channel, the Halifax, NS-based junior resource company said.

"This well is an essential step in the evaluation of the Old Harry prospect, which offers significant hydrocarbon potential and associated benefits for Eastern Canada," said Corridor CEO Phil Knoll. The prospect may be one of the largest untapped natural gas and oil reservoirs in Eastern Canada's offshore.

A project description filed Tuesday with the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) is the first step in a regulatory process that could lead to drilling of the offshore well between mid-2012 and early 2014, Corridor said.

Quebec last year said it was working on a plan that would allow it to develop its portion of the Old Harry formation (see Daily GPI, Oct. 26, 2010). The C-NLOPB previously approved a Corridor permit to develop 127,948 acres of Newfoundland's portion of Old Harry with a minimum work commitment of C$1.52 million to be conducted over a five-year initial term.

Old Harry, which straddles the province's offshore border with Newfoundland, may hold 5 Tcf of gas and 2 billion bbl of oil. The formation, named for a waterfall on Quebec's Iles de la Madeleine, is about 18 miles long (29 kilometers) in water about a quarter-mile deep (460 meters). Under an agreement in 1964 between Newfoundland and Quebec's premiers, about 70% of Old Harry lies in Quebec waters.

Corridor previously completed an extensive work program to identify the proposed well location on the western side of Exploration License 1105, which included the collection and interpretation of 2-D seismic data in 1998 and 2002, as well as a geohazard site survey last October.

Members of the political party Parti Quebecois on Wednesday renewed calls for Quebec Premier Jean Charest to get an agreement with Canadian Prime Minister Stephen Harper that would allow hydrocarbon extraction on Quebec's side of the Gulf of St. Lawrence, according to The Montreal Gazette. The Supreme Court of Canada previously ruled that offshore resources belong to the federal government.

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