NEWFOUNDLAND TESTS LAND EXPLORATION INTEREST

G. Alan Petzet Exploration Editor The government of the Province of Newfoundland and Labrador is inviting the industry to take another look at onshore western Newfoundland. A 1989 study by the Petroleum Resource Development Division of the Department of Mines & Energy stated that an area of about 30,000 sq km with widespread oil and gas seeps and hydrocarbon shows in shallow wells remains virtually unexplored in western Newfoundland.

Sept. 9, 1991

4 min read

G. Alan Petzet
Exploration Editor

The government of the Province of Newfoundland and Labrador is inviting the industry to take another look at onshore western Newfoundland.

A 1989 study by the Petroleum Resource Development Division of the Department of Mines & Energy stated that an area of about 30,000 sq km with widespread oil and gas seeps and hydrocarbon shows in shallow wells remains virtually unexplored in western Newfoundland.

The report further concluded, "A systematic exploration program utilizing modern exploratory techniques is warranted in this area and could potentially lead to the discovery of commercial accumulations of hydrocarbons."

Success of the Canada-Newfoundland Offshore Petroleum Board's 1990 land sale, in which oil and gas rights were issued for 1.6 million hectares of adjoining offshore parcels, attests to growing interest in the area, writes Alphonsus Fagan of St. John's, Newf., a geophysical consultant to the Newfoundland & Labrador Department of Mines & Energy.

Newfoundland contains a well exposed portion of the Appalachian-Caledonian fold belt (OGJ, Jan. 25, 1982, p. 285).

REGULATIONS UPDATED

New oil and gas regulations took effect Feb. 15, 1991.

They provide for a simple tenure system requiring an exploration license to conduct geophysical surveys, an exploration permit to drill, and a lease to produce.

The permit has a primary term of 5 years that may be extended by a 2 year secondary term where a permittee has drilled a well during the primary term or where a permittee commits to drill a well during the secondary term.

Lands overlying an oil discovery that is to be developed may be converted to lease and produced for the life of the field.

Dr. Rex Gibbons, a geologist and Newfoundland's minister of energy and mines, invited interested parties to indicate by Sept. 13 those lands in the onshore area of the province that they would like to see made available in a competitive request for bids.

A request for bids will follow the call for postings, if sufficient interest has been shown. Winning bidders would then be issued exploration permits, said David Hawkins, director, petroleum resource development.

EARLY HISTORY

Newfoundland's west coast has long been recognized as an area of oil potential.

A Mr. Silver drilled Newfoundland's first well near Parsons Pond in 1867. This was just 9 years after James Miller Williams made North America's first intentional discovery at Oil Springs, Ont., and 8 years after Col. Drake's more famous well in Titusville, Pa.

Silver's well reached a total depth of 699 ft and encountered oil.

No more drilling occurred until 1893, when Newfoundland Oil Co. drilled a 1,299 ft hole near the old well and struck oil in three intervals.

LIGHT OIL PRODUCED

Several other wells were drilled in this area during the next 2 decades, and most encountered oil.

The oil has historically been interpreted to have come from Middle Ordovician Lower Head sandstone. The most recent well drilled in the area was abandoned in 1965 at 4,271 ft in Lower Head.

Flow rates of the early wells were generally 2-10 b/d, and the oil was stored in tanks and shipped to the gas works in St. John's.

The gas works director described the oil as a "fine, light oil, practically sulfurless, and it appeared to contain a great deal of paraffin," so clear it did not dirty the barrels and possibly superior to Pennsylvanian oil. Limited exploration programs failed to discover adequate reserves and were eventually discontinued, Fagan wrote.

Small scale exploration programs were also carried out over the years in areas other than Parsons Pond, including St. Paul's inlet, Deer Lake, and the Port au Port peninsula. All encountered good hydrocarbon shows, but the elusive commercial discovery failed to materialize.

An estimated 60 wells have been drilled in western Newfoundland, the most recent in 1973.

None of the locations were chosen with the help of any geophysical survey, and many were chosen with very little geological control or analysis, yet about half encountered some form of hydrocarbon. Most of the wells were shallow, less than 2,300 ft, and only two exceeded 3,280 ft, even though sediment thicknesses typically exceed 9,840 ft.