CORNER BROOK — Shoal Point Energy Ltd. is hoping to have at least three wells drilled and stimulated in western Newfoundland by next summer.
George Langdon, the company’s chief executive officer, also said the company with rights to much of all the land in the Green Point area is actively seeking a major investing partner to advance its projects in the near future.
In 2011, exploratory drilling in the Port au Port Bay area did not go as planned for the company. Operational problems prevented the testing from getting the natural flow from the reservoir that was expected, he explained.
Other tests though helped the company gain valuable engineering data, and they remain confident in the potential of the play, said Langdon. They are expecting to return to drill a third side track at the site by next year, and pending environmental approvals will do hydraulic fracturing to stimulate the reservoir.
Further north, the company is hoping to drill exploration wells near Little Port and along the lower Northern Peninsula — two sections of the large regional shale play — later this year or in 2013. When the rigs are transported onto the island, by the end of next summer, each of those wells could be stimulated to see if the hydraulically fractured Green Point shale will flow.
“At that point, we would establish the viability of the play over a very large area, and enable us to move forward with our plan to maintain those licences, drill more wells, and eventually getting into production on those licences going forward,” Langdon said.
The CEO said the relationship with the regulatory body — Canada-Newfoundland and Labrador Offshore Petroleum Board — has been a positive one. In general, he said the recognition of the interest and need to mine regional shale play has changed the face of the industry in North America.
The key piece now is finding ways to stimulate, extract, and ultimately produce that fuel. A key component is financing, said Langdon. In the last six years or more, he said the company has spent close to $50 million in the area — most of that raised by the publicly traded company.
Getting to the point where they have demonstrated the viability of the oil in these western Newfoundland locations — as much as 23.5 billion barrels in one estimate — they are actively searching for a joint venture partner to invest.
“We feel very confident that we can identify the partner we need, and enter a commercial relationship to get the operations moving forward over the next 12 months or so,” Langdon said. “My dream would be, by the end of next summer, to have at least three wells drilled and stimulated.”
There are other industry players interested and active in developments throughout western Newfoundland. The CEO said this is positive for the industry — that any company which attracts investment and activity in the area would benefit all.
“Everybody seems to agree there is a lot of evidence for oil up and down the coast,” he said.
Although, not everybody agrees it should be developed — particularly at all costs. The St. Lawrence Coalition was formed to persuade governments to issue a moratorium on oil and gas exploration and developments in the Gulf of St. Lawrence. Some local environmentalists, or those with connections to the local area, have agreed with this philosophy.
Langdon said his company is aware of, and pays particularly close attention to, the strict regulations which the industry must adhere to. He also said they are conscious of the potental environmental impacts and dangers of their work. He said the history of oil and gas development around Newfoundland has been a good one — noting the lengthy past of exploration/development in the Grand Bank without any major incidents.
“We are only interested in preserving the environment,” he said. “Obviously, we are interested in development as well.”
Langdon said it is up to the people of western Newfoundland to pass along their opinions — to their elected officials through processes such as environmental assessments — on whether or not they want development.
“I believe this can be carried out in a very safe and economically sound manner,” he said.
Langdon will be one of today’s speakers at the 2012 Western Newfoundland Oil and Gas Symposium in Corner Brook. It continues Friday.