By OGJ editors
HOUSTON, Apr. 14 – Shoal Point Energy Ltd., Toronto, concluded a farmout from Ptarmigan Energy Inc. to earn shallow rights on part of Ptarmigan Energy’s Exploration License 1120 in western Newfoundland.
Shoal Point will have the right to earn into the shallow rights by paying Ptarmigan Energy’s $1.8 million and by drilling a well to assess the petroleum potential of the Green Point shale by Dec. 31, 2012. Shoal Point Energy, once it has completed the earning requirements, will earn an 80% working interest in the shallow rights with Ptarmigan Energy retaining 20%.
Shallow rights are defined in the farmout as all strata lying stratigraphically and structurally above the Ordovician carbonate platform and include the Green Point formation and other organic-rich rocks in the Cow Head Group and equivalents in the Humber Arm allochthon (see chart, OGJ, Dec. 30, 1991, p. 108).
The farmout area covers 67,285 acres in a 7 km wide band along the coast that defines the eastern boundary of EL 1120.
Pursuant to the terms of the area of mutual interest agreement with Canadian Imperial Venture Corp., St. John’s, Canadian Imperial has advised Shoal Point Energy that it has elected to participate to the maximum 40% of the 80% earned interest that Shoal Point Energy will acquire. Therefore, with full participation, the working interest ownership in shallow rights after the well has been drilled will be Shoal Point Energy 48%, Canadian Imperial 32%, and Ptarmigan Energy 20%.
The total area of Green Point shale rights held by the Shoal Point Energy/Canadian Imperial partnership is now 217,285 acres, including some 60 km of continuous strike length along the coast between the south shore of Port au Port Bay and the Bay of Islands. Initial operations on EL 1120 will benefit from access to the coast via the community of Littleport, where it is anticipated the well will be drilled.