Projects
Offshore Western Newfoundland Petroleum
Vulcan was instrumental in the creation of NWest Energy Inc. (NWest). Vulcan owns 19% of the shares of NWest (June 2008), a public corporation, specifically created to explore for petroleum in certain offshore parcels of western Newfoundland. Through a series of competitive rounds of bidding and merger of interests, NWest is now the 100% owner of four offshore exploration licenses issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board. These licenses were issued in January 2006 and January 2007 and have a five-year primary term. Any license that is drilled will be extended an additional four-year term. The licenses represent a large landholding of approximately 1.5 million contiguous acres of a prospective, yet unexplored, foreland basin.
Vulcan has received from NWest the results of a NI 51-101 compliant petroleum resource assessment of NWest’s offshore western Newfoundland exploration licenses by Sproule Associates Limited of Calgary, Alberta (Sproule). The Sproule report provides a geophysical interpretation of existing 2D seismic data covering NWest’s four exploration licenses in the Gulf of St. Lawrence adjacent to the west coast of Newfoundland.
Sproule identified 155 prospects and leads at three different stratigraphic horizons on the licenses. Some of these geophysical leads are very interpretive, based upon limited 2D seismic control, and will require additional seismic to prove their validity and size. All require further seismic delineation to upgrade them to drill ready status. Many of the prospects and leads are stacked vertically, enhancing their prospectivity by providing multiple targets at any individual drilling location. Sproule selected the eleven highest priority geophysical anomalies based on the geophysical and geological data available and concluded, “The 11 most significant geophysical anomalies herein considered as forming the initial exploratory drilling phase of NWest’s ongoing program may have an undiscovered in-place resource in the order of 3.8 billion barrels”. These offshore licenses have never been drilled and the resource estimate is of undiscovered resources with no certainty that any of the resources will be discovered, recovered or developed.
In the opinion of Vulcan this resource assessment identifies the impressive order of magnitude of the targets contained in these offshore licenses. This independent verification of western Newfoundland’s petroleum potential confirms the Company’s initial evaluation and commitment to this area as an emerging petroleum exploration region. NWest recently raised $10 million and conducted a seismic survey on promising structures in late 2008. The data has been processed and an independent interpretation is being finalized. NWest is actively seeking joint venture partners.
