Calgary-based Canadian Superior Energy Inc. acquired El Paso Corp.’s offshore Nova Scotia exploration and production (E&P) assets last week for an undisclosed amount. The two companies teamed up in 2002 and again in 2003 to work in the Scotian offshore, but the projects have never matched El Paso’s expectations.
El Paso and Canadian Superior, one of the largest leaseholders in the Scotian waters, announced a partnership in 2002 to work on the offshore Marquis Natural Gas Project (see NGI, May 27, 2002). They set up another venture last year to develop and drill the Mariner gas prospect, which was then projected to hold potential reserves of more than 1 Tcf (see NGI, April 21, 2003). However, in March, Canadian Superior announced it had plugged and abandoned the Mariner well, and said it was reviewing the well’s results before considering its next move (see NGI, March 15).
The acquisition includes El Paso’s interests in the Marquis blocks (EL 2401 and 2402), and in the Mariner block (EL 2409) and in the Mariner I-85 well, all of El Paso’s seismic data, all shared geophysical, geotechnical and environmental data, all related inventory and extensive tax pools. Both the wells are located in shallow water close to producing Sable Island gas fields.
Seeking to put a good light on the Houston-based company’s withdrawal, Canadian Superior President Greg Noval said in a statement that he and his team had “enjoyed working with the various El Paso teams and El Paso management over the last three years on this exciting project.”
Noval said El Paso’s decision will allow the companies to “proceed forward with our corporate objectives,” and that Canadian Superior “remains a strong supporter of El Paso’s Blue Atlantic Pipeline Project to connect Atlantic Canada natural gas to the New York area.” El Paso notified the Federal Energy Regulatory Commission last year that it would delay its Blue Atlantic pipeline project because of a slowdown in developing gas supplies off the Scotian coast (see NGI, April 21, 2003).
Mike Coolen, Canadian Superior’s vice president, East Coast Operations, said the acquisition gives the company “additional flexibility to facilitate joint venture partnerships in support of future planned exploration and development on these prospects. We are well along in this effort and we will have more to say on this in the weeks ahead.”
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