NORVAL SCOTT
CALGARY — Globe and Mail Update Published on Wednesday, May. 07, 2008 8:28AM EDT Last updated on Monday, Mar. 30, 2009 3:37PM EDT
Spurred by high commodity prices and new technologies, junior energy companies are on a natural gas exploration hunt across Canada in search of overlooked reserves.
Technological breakthroughs have made unconventional plays - the easy-to-find, but hard-to-develop resources that can hold vast reserves - far more economically viable.
There have been big natural gas discoveries in British Columbia, Saskatchewan and even Quebec. And while companies have flocked to the hottest new development regions such as B.C.'s Montney shale gas field, there are many others now seeking to replicate that success in regions whose potential is little known.
For example, Calgary-based PetroWorth Resources Inc. said yesterday that, fired by the interest in the recent success of junior firms in finding large unconventional reserves, it's substantially changing its drilling plans in New Brunswick. The firm is now drilling four deep wells in the hope of finding larger shale gas resources.
"We feel we might as well be on the [shale] gas bandwagon," said PetroWorth president Neal Mednick. "There are gas-charged structures throughout the East Coast ... it's the new frontier for oil and gas exploration in Canada."
While New Brunswick has proven reserves - Halifax-based Corridor Resources Inc. began producing from the region last year - the extent of the province's unconventional reserves is unknown, although seismic exploration conducted so far there indicates promise.
PetroWorth, which currently has around $7.5-million in free cash, is planning to spend $6-million on its drilling program this year to firm up that potential, and will likely seek to raise more cash in July or August.
New Brunswick isn't the only region interesting juniors; Calgary-based Triangle Petroleum Corp. said last month that it's "cautiously optimistic" that it has discovered a "world-class unconventional gas reservoir" in Nova Scotia.
Meanwhile, Onco Petroleum Inc., a London, Ont.-based firm, said last week that it's found as much as 1.6 trillion cubic feet of gas in its Tilbury field in southwestern Ontario. Tilbury is one of the earliest fields to be developed in Canada and produced gas from 1907 to 1990, when low prices forced production to stop.
However, there's still plenty of gas in the field, Onco president Robert Vanier said. The company is planning a $100-million program that would result in gas production of up to 20 million cubic feet a day within two years, with first production by the end of 2008.
"Alberta has always come up with huge volumes of gas that made everywhere else become non-relevant," Mr. Vanier said. "But all the drilling and data is telling us that there's a lot of gas to get out of this land."
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