Shell Strikes Out with Shelburne Well Off Eastern Canada

Royal Dutch Shell plc confirmed to Rigzone that the first of its two planned exploration wells in the Shelburne Basin offshore eastern Canada failed to encounter commercial quantities of hydrocarbons.

Drilling of the Cheshire L-97A deepwater exploration well, located 155 miles (250 kilometers) offshore Halifax, Nova Scotia, was completed last week, Cameron Yost, spokesperson for Shell Canada, told Rigzone in an email statement.

Yost told Rigzone that Shell plans to spud the second exploration well in the program, Monterey Jack, at the end of this month. Monterey Jack is an independent drilling prospect located about 74 miles (120 kilometers) southwest of the Cheshire location.

The company secured an Operations Authorization from the Canada-Nova Scotia Offshore Petroleum Board in October 2015 to drill both wells, Yost stated. Shell started drilling the Cheshire well in October of last year using the Stena IceMAX (UDW drillship), which it will also use to drill the Monterey Jack well. Located in 6,889 feet (2,100 meters) of water, the Cheshire well is the first exploration well drilled offshore Nova Scotia in about a decade, according to Shell Canada’s website.

As part of the Shelburne Basin exploration project, Shell acquired six exploration licenses in 2012 and 2013 in the unexplored geological area known as the Shelburne Basin, Yost said. According to Shell’s website, the company is seeking to confirm the presence of hydrocarbons on the Southwest Scotian Shelf in water depths of 4,921 feet to 11,482 feet (1,500 to 3,500 meters).

Shell Canada Limited is operator with 50 percent interest of the joint venture for the Shelburne Basin deepwater exploration project. Partners in the Shelburne Basin joint venture include ConocoPhillips Canada East Coast Partnership with 30 percent and Suncor Energy Inc. with 20 percent.

Suncor said in a Sept. 21 press release that it would write off its share of the well cost. Under the commercial terms of Suncor’s farm-in agreement, that after-tax cost is estimated at C$105 million ($79.5 million).

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

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