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Columbia E&P Joins Canadian Maritimes Ventures

August 23, 1999
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Columbia E&P Joins Canadian Maritimes Ventures

Columbia Natural Resources Canada (CNRC) has joined with two small Canadian producers targeting onshore Maritimes production to feed the nearly completed Maritimes & Northeast Pipeline.

The Canadian affiliate of the U.S. Appalachia-based producer, Columbia Natural Resources (CNR), has announced joint ventures with two Nova Scotia and New Brunswick onshore producers --- Corridor Resources Inc., based in Halifax, NS and named for the new pipeline corridor, and MariCo Oil and Gas Corp., headquartered in Fredericton, NB. Columbia purchased a 50% interest in drilling projects of the two producers to tap mainly natural gas resources to feed into the pipeline which is expected to be completed in time for deliveries this winter.

"Exploration in the Canadian Maritimes is an exciting new development. It is an area where we see real potential for growth," said W. Henry Harmon, CNR president, adding it was part of Columbia's efforts to expand its E&P operations beyond the Appalachian Basin.

Norman W. Miller, Corridor's president, said Columbia's interest would provide a major impetus for development. "Columbia will bring experience with the latest seismic and drilling techniques" gained in its Appalachian properties. The region has a similar geology, Miller said.

Under the terms of the agreement, Columbia will pay Corridor $1 million for a 50% working interest in Corridor's Sackville Basin and Elgin Basin licences covering some 312,670 acres in southeastern New Brunswick. The two companies have committed to carrying out an extensive seismic program in the Sackville, NB, area this summer and to drilling two exploration wells this fall, one near Sackville and the other near Elgin. Corridor will act as operator for activities undertaken this year with the operator's role going to Columbia at the year's end.

The agreement with MariCo includes a 50% working interest in 17 tracts totaling more than 1 million acres and a 50% working interest in the Downey No. 1 discovery well south of Moncton, NB, and approximately 40 miles of seismic data also in southeastern New Brunswick. Under this agreement CNRC anticipates completing the Downey well and drilling two delineation wells this year.

Corridor was founded by three partners, including two Shell Canada veterans in 1995 to search out and take an aggressive land position within reach of the new pipeline. It now has petroleum exploration licenses for a total of 5,650,109 net acres in New Brunswick, Quebec and Prince Edward Island. The company's game plan calls for "accessing a large historic database of geological and drilling information, evaluating this data with new exploration technologies, and preparing prospect plays which are suitable to attract new partners." The first of such farmout agreements was concluded with Shell Canada Ltd. in 1997 covering development on Anticosti Island, Quebec.

Miller pointed out that the Maritimes area historically has produced for local use. Changed economics from new drilling and production techniques, plus a nearby mainline combine to upgrade the area's prospects. He said they will be looking at several levels and could go as deep as 12,000 feet.

Ellen Beswick

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