By OGJ editors
HOUSTON, Dec. 4 – Shoal Point Energy Ltd., Calgary, and Canadian Imperial Venture Corp., St. John’s, plan to explore the Cambro-Ordovician Green Point formation on land and near shore in western Newfoundland.
Under an agreement with McLaren Resources Inc., Toronto, Shoal Point Energy plans to operate three exploratory wells. Shoal Point Energy 61.5% and CIVC 38.5% hold 137,000 acres of exploration rights above the Ordovician carbonate platform in Exploration License 1070 in the Port au Port Bay area with Green Point potential. All drilling targets are reachable from shore.
Green Point is recognized as having high total organic carbon, locally in excess of 10%, and is the probable source, based on geochemical affinities, of numerous oil and gas seeps in the region as well as early production on Shoal Point and the major exhumed oil field at Port au Choix, 200 miles north of Port au Port Bay, CIVC said.
To facilitate farmout deals, EL 1070 has been divided into 15 blocks. CIVC and McLaren have entered into a farmout agreement giving McLaren the right, on a well by well basis, to participate in a planned three-well program to start as early as possible in 2010. McLaren will pay 32% of the cost of the well to earn a 16% working interest in the block on which the well is drilled. Provided McLaren participates in all 3 wells, it will have the right to pre-empt and match the terms of any third party offer on remaining blocks in EL 1070.
The three firms also agreed to establish a 1.5 million acre area of mutual interest for lands outside EL 1070 that are potentially prospective. They intend to gain acreage through land sales and farm-out deals with others that hold lands in the AMI.