Deer Lake -
Deer Lake Oil and Gas Inc. has broken ground in the Deer Lake Basin.
The independent oil and gas explorer company commenced drilling operations at its Werner Hatch No. 1 location on Friday, which is situated in gravel pits off the Trans-Canada Highway, two-and-a-half kilometres east of Junction Brook Bridge.
Cabot Martin, president and chief executive officer of Deer Lake Oil and Gas Inc. said the company is looking forward to this next phase in oil and gas exploration.
"We're quite happy that we've been success getting the well started and with the progress she's made so far," Martin said Monday.
He said there will be a gap in activity for about 10 days while the site is prepared for equipment arriving from contract engineers in Alberta.
"All these bits and pieces coming together, it's part of the oil field business ... After that, we'll probably be on site for three to four weeks at this location," he said.
'Convenient spot'
The Werner Hatch No.1 location is in a "convenient spot," according to Martin, next to the main highway, while the second drilling site is located about five kilometres north of the Trans-Canada Highway, east of Junction Brook Bridge. Martin said he was pleased the Town of Deer Lake accepted the drilling sites.
At the request of the company, Minister of Natural Resources Kathy Dunderdale has suspended the second exploration permit for a period of six months effective Feb. 12, 2010.
"We're quite happy that the minister has granted us this suspension because, with the mild weather, the roads are not really going to be passable much longer and if we were having our heavy machinery go back and forth, we would not be able to operate effectively or even safely," said Martin.
Both drilling wells will be relatively shallow, at 350 metres. Martin said the wells will be designed to the regulatory requirements needed to deepen them for further exploration either in the near future or further along in the exploration process.
"We're looking forward to the geology as it reveals itself and adjust our drilling accordingly ... We've picked our spot and now it's up to mother nature, she's really in charge of what happens from here on in because we are engaged in a risky venture and but at the very minimum we will gain some very valuable insight into the potential of this particular area," said Martin.
This is the first directed shale gas venture in Newfoundland. Martin said teams from both the United States and western Canada will be monitoring the worksite and performing lab work onsite.
"That's going to be a major step forward for us ... We're down a certain depth into bedrock now and when we start coring right away, as the core comes out of the hole, this team of people will be ready to examine it onsite and preserve it so their later lab work can be as accurate as possible. We'll start getting some sort of results almost immediately as soon as we start drilling begins, so it's going to be quite exciting," said Martin.
Positive developments
Martin said he has noticed some positive developments with local contractors and suppliers since the last time Deer Lake Oil and Gas Inc. was drilling in the area in 2003.
"It's fair to say, getting back at the physical operations after being absent for a number of years, that there are some very positive changes in the capabilities of local contractors and suppliers. That really should stand us in good stead as we move along with the next phase of our drilling. There are significant improvements, it seems to me, in the range of services.
"Also a significant number of people have indicated that they were really interested in what we were doing and were keen on finding ways to contribute to the project as contractors. It's a good positive business environment," he said.
Deer Lake Oil and Gas Inc. is based out of St. John's and is active in western Newfoundland, both on and offshore.
