NGI The Weekly Gas Market Report
Columbia Natural Resources Canada (CNRC) has joined with twosmall Canadian producers targeting onshore Maritimes production tofeed the nearly completed Maritimes & Northeast Pipeline.
The Canadian affiliate of the U.S. Appalachia-based producer,Columbia Natural Resources (CNR), has announced joint ventures withtwo Nova Scotia and New Brunswick onshore producers — CorridorResources Inc., based in Halifax, NS and named for the new pipelinecorridor, and MariCo Oil and Gas Corp., headquartered inFredericton, NB. Columbia purchased a 50% interest in drillingprojects of the two producers to tap mainly natural gas resourcesto feed into the pipeline which is expected to be completed in timefor deliveries this winter.
“Exploration in the Canadian Maritimes is an exciting newdevelopment. It is an area where we see real potential for growth,”said W. Henry Harmon, CNR president, adding it was part ofColumbia’s efforts to expand its E&P operations beyond theAppalachian Basin.
Norman W. Miller, Corridor’s president, said Columbia’s interestwould provide a major impetus for development. “Columbia will bringexperience with the latest seismic and drilling techniques” gainedin its Appalachian properties. The region has a similar geology,Miller said.
Under the terms of the agreement, Columbia will pay Corridor $1million for a 50% working interest in Corridor’s Sackville Basinand Elgin Basin licences covering some 312,670 acres insoutheastern New Brunswick. The two companies have committed tocarrying 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 asoperator for activities undertaken this year with the operator’srole going to Columbia at the year’s end.
The agreement with MariCo includes a 50% working interest in 17tracts totaling more than 1 million acres and a 50% workinginterest in the Downey No. 1 discovery well south of Moncton, NB,and approximately 40 miles of seismic data also in southeastern NewBrunswick. Under this agreement CNRC anticipates completing theDowney well and drilling two delineation wells this year.
Corridor was founded by three partners, including two ShellCanada veterans in 1995 to search out and take an aggressive landposition within reach of the new pipeline. It now has petroleumexploration licenses for a total of 5,650,109 net acres in NewBrunswick, Quebec and Prince Edward Island. The company’s game plancalls for “accessing a large historic database of geological anddrilling information, evaluating this data with new explorationtechnologies, and preparing prospect plays which are suitable toattract new partners.” The first of such farmout agreements wasconcluded with Shell Canada Ltd. in 1997 covering development onAnticosti Island, Quebec.
Miller pointed out that the Maritimes area historically hasproduced for local use. Changed economics from new drilling andproduction techniques, plus a nearby mainline combine to upgradethe area’s prospects. He said they will be looking at severallevels and could go as deep as 12,000 feet.
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