Projects
Labrador Offshore
During September 2008, the Company entered into a joint bidding agreement with Investcan Energy Corporation on a 50/50 basis. Pursuant to that agreement the Company and Investcan bid on Exploration Licence 1107 as per the Call for Bids NL07-2 for exploration licences offshore Labrador and were the successful bidders on that parcel with a work commitment bid of $9,601,000. A refundable security deposit equal to 25% of the work commitment was posted with the Canada-Newfoundland and Labrador Offshore Petroleum Board (“CNLOPB”) to secure the exploration licence 1107 (EL 1107).
The joint bidding agreement between the Company and Investcan provided that Investcan shall post 100% of the refundable security deposit. The Company’s obligation to pay 50% of the security deposit was carried by Investcan for two years without dilution of the Company’s working interest in the exploration licence. On July 23, 2010, the Company entered into an earn-in agreement with Investcan regarding the 2010 seismic program offshore Labrador in which Investcan had the right to earn a 20% working interest from the Company in EL1107 by solely funding 100% of the costs of a 2D seismic survey on the license to a limit of $8.2 million on or before December 1, 2010. Upon completion of the seismic program during the fall of 2010, Investcan earned its 20% interest with Vulcan retaining a 30% working interest in EL1107. The seismic program consisted of approximately 3,000 line kilometers of 2D seismic over the entire 236,000 hectares of EL1107. The current program and ongoing evaluation work should satisfy the bulk of the work bid and provide for the return of the corresponding portion of the $2,400,250 security deposit posted by Investcan; the Company will fund its 30% interest of any balance remaining of the security deposit.
An exploration licence confers the right to explore for petroleum for an initial Period I of six years with a possible additional period of three years. Exploration Licence 1107 covers 236,525 hectares (584,000 acres) of the Hopedale Basin on the Labrador continental shelf. It is situated adjacent to and on trend between the Bjarni-North Bjarni discoveries (approximately 3.1 trillion cubic feet of natural gas) to the northwest and the Gudrid discovery (approximately 924 billion cubic feet of natural gas) to the southeast. The gas quantities for the Bjarni-North Bjarni and Gudrid discoveries are resources as published by the CNLOPB. The recently acquired seismic survey is currently being processed, to be followed by interpretation and a marketing program towards farmout or sale of the licence.
Click for map of the Hopedale Basin Licences
