Due to high drilling costs and pack ice delays, Calgary-based Canadian Superior Energy Inc. said that despite encountering gas pay in multiple zones on its Mariner I-85 well, it has temporarily halted drilling on the deepwater prospect because of pack ice and potential cost overruns.

In drilling the well with its partner El Paso Corp., Canadian Superior said gas levels measured while drilling support the presence of gas bearing reservoir sections, subsequently confirmed by the full suite of electric wireline logs, which have been completed and evaluated.

On the news of work stoppage, the share price for Canadian Superior plummeted in Thursday afternoon trading. As of the markets close Thursday, the company’s share price fell 44%, or $1.44 to close at $1.80.

As one of the deepest test wells to be drilled offshore this year in North America, the “Mariner” I-85 well is located 180 miles southeast of Halifax, NS. Canadian Superior said there are three “world-class” prospects that have been identified for drilling on the Mariner block utilizing high-resolution seismic. The block encompasses a total area of 101,800 acres and directly offsets five significant discoveries near Sable Island including the ExxonMobil Venture natural gas field.

“We are pleased with the results obtained in the drilling of the Canadian Superior El Paso ‘Mariner’ I-85 well, the first well on the ‘Mariner’ Block,” said Greg Noval, Canadian Superior’s CEO. “However, given the recent operational pack ice delays and associated cost and the current overall cost of the well, we have reluctantly agreed with El Paso, the operator of the test well, not to proceed with any further testing or completion operations on the test well at this time, to maintain the well within the original budget.

“We are confident that the results from the ‘Mariner’ I-85 well prove that a substantial gas pool exists between the ‘Mariner’ I-85 and ‘Arcadia’ J-16 wells, and we are confident that we have established a significant gas reservoir on the ‘Mariner’ Block between these two wells.”

Under a partnership agreement, El Paso Oil & Gas Canada Inc., an indirect subsidiary of El Paso, is participating in the drilling of the Mariner prospect by paying 2/3 of the costs to earn a 50% interest, with Canadian Superior retaining a 50% interest in the block and paying 1/3 of the costs related to the Mariner test well.

Mike Coolen, Canadian Superior’s director of East Coast Operations, said, “As with all offshore operations, drilling ‘Mariner’ I-85 has had its challenges, even the rare occurrence of pack ice; but, it is fair to say we are pleased with the overall progress on this project. To date, all operations on the well have been performed in a safe and efficient manner by the Canadian Superior El Paso drilling team and we look forward to continuing with further drilling on this project in the very near future on our large ‘Mariner’ Block and our offsetting ‘Marauder’ holdings.”

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