EnCana Corp., searching for a partner to share some of the costs for drilling natural gas wells offshore Nova Scotia, apparently has persuaded Shell Canada to partner on an exploratory well on the Weymouth offshore license near Sable Island.

Neither EnCana nor Shell would confirm the joint venture, which was announced in Atlantic Canadian News on Thursday. EnCana officials have said it would cost about C$80 million to drill the Weymouth prospect this year. Shell Canada already is a major player off the Scotian shelf as a partner in the Sable Offshore Energy Project, which began shipping gas about four years ago. It also is a key player on Canada’s East Coast.

Meanwhile, EnCana, offshore Nova Scotia’s largest leaseholder, had been looking for a partner to share the costs of drilling. Although the Deep Panuke area originally had shown strong drilling success, EnCana requested a time out from Scotian government officials earlier this year to revamp its exploration program in the cold deepwater (see Daily GPI, Feb. 18). The company is expected to provide an update on the status of its offshore drilling plans by the end of this year.

EnCana apparently scored success with a new gas well test in its suspended Panuke project, and had been rumored to begin drilling a second shallow-water well by the end of this month (see Daily GPI, Aug. 22). Larry LeBlanc, EnCana’s senior vice president for EnCana’s East Coast Unit, said recently that while the company had not made a final decision to proceed, it is finalizing a well location so that it “would be in a position to start drilling this fall.”

According to the company, the second test well would be located near the recently drilled Margaree well, which is located about 250 kilometers southeast of Halifax. The Margaree well is rumored to be a strong gas discovery for EnCana, but the company so far has not provided any details. The Margaree F-70 well spudded on May 21 using the Rowan Gorilla V jack-up, and was drilled to a depth of 3,677 meters.

The Nova Scotia Department of Energy earlier this year estimated that eight to 10 new wells would be drilled offshore by fall 2004. The agency based its estimate on drilling commitments. By the end of 2006, the energy department estimates that nine shallow wells and 188 deepwater wells would be drilled, based on exploration commitments of C$1.56 billion on 57 license blocks. The latest Canada-Nova Scotia Offshore Petroleum Board estimates put Nova Scotia’s shallow and deepwater plays at 33 Tcf of recoverable reserves.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.