As the long-awaited Deep Panuke project off the east coast of Nova Scotia, operated by EnCana Corp., approaches the development phase, subsidiaries of ExxonMobil and Shell have offered to sell their interests.

The project received preliminary support recently from a commissioner on the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB), which, along with the National Energy Board, is expected to take final action authorizing the project before summer’s end (see Daily GPI, May 10). EnCana has estimated that the proposed project will generate daily gas sales volumes of 300 MMcf/d beginning in 2010, with a mean cumulative production total of 632 Bcf over approximately 13 years.

EnCana is moving ahead with preliminary engineering and bids for structural work on the project.

The offering by the two majors did not detail their interests. It is known, however, that ExxonMobil Canada Properties holds 51% of one of the discovery wells near the Panuke field, the MarCoh, while Shell Canada Energy and EnCana each hold 24.5% of that well. EnCana holds 100% of the Margaree well, also nearby.

Development of the Panuke gas field, first reported in 1998 and 1999, was put on hold in early 2003 because of the uncertainty of Panuke’s reserves and the cost of getting gas to market (see Daily GPI, Feb. 18, 2003). Reserve calculations at that time had indicated that the project would yield up to 1 Tcf of gas reserves and produce 400 MMcf/d. EnCana officially revived the project in 2006 with lower expectations (see Daily GPI, July 5, 2006).

ExxonMobil said a detailed offering memorandum providing information concerning the Deep Panuke acquisition opportunity is currently available to parties who express an interest. A data room at the offices of Imperial Oil in Calgary will be made available to interested parties who have signed a confidentiality agreement. For information, contact Stephanie Radke, (403) 237-4215, stephanie.radke@esso.ca. Offers to acquire the interests of ExxonMobil Canada and Shell in Deep Panuke must be received by ExxonMobil Canada on or before 5 p.m. MDT Aug. 8.

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