This consolidation will come into effect upon the drilling of the next "Mariner" exploration well and will allow the work commitments and related work commitment deposits for these two exploration licenses (EL 2406 and EL 2409) to be combined, allowing the existing work deposit for "Mayflower", approximately $10 million, to be applied directly against the costs of drilling Canadian Superior's next "Mariner" well; in effect, this provides Canadian Superior with $10 million of additional capital to be applied to drilling the next "Mariner" well. The "Mariner" Project lands are located approximately nine kilometres northeast of Sable Island, offshore Nova Scotia, encompassing an offshore area of 101,800 acres (100% Canadian Superior), and directly offsets five significant discoveries near Sable Island, including the ExxonMobil Venture natural gas field.
Also, upon consolidation, the exploration term for Canadian Superior's 100% deepwater "Mayflower" license (EL 2406) will be extended for 2 additional years, from the current expiry date of December 31, 2006 to December 31, 2008; and, thereafter, 50% of the license area will be extended for an additional 2 years to December 31, 2010. Canadian Superior's "Mayflower" deepwater project exploration license covers approximately 712,000 acres and mapping to date indicates the presence of five sizeable deepwater prospects. These large prospects are structural and are typically formed by mobile salt tectonics. Canadian Superior plans to take full advantage of the extended exploration term on "Mayflower" and is currently working with a potential partner for its deepwater "Mayflower" prospect. Further high resolution seismic over the "Mayflower" block is planned to further define targeted structures to enable future drilling.
Mike Coolen, a Canadian Superior Director and Vice President, East Coast Operations, said today, in Halifax, "We are very pleased to receive this approval and the support of the Province of Nova Scotia and the Government of Canada and the CNSOPB in putting forward this type of creative incentive to reward and encourage further exploration drilling offshore Nova Scotia."
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