Triangle Petroleum Corporation reported that it has partnered with Zodiac Exploration Corp., a private Calgary-based exploration company, to drill as many as six new delineation wells on its 516,000 gross acre Windsor Block in the Maritimes Basin of Nova Scotia. This drilling program is the second phase of Triangle's three-phase strategy for developing natural gas from shale in Eastern Canada.
Triangle has entered into a joint venture agreement with Zodiac whose founder, President and Chief Executive Officer is W. Murray Rodgers.
The joint venture provides for an initial commitment by Zodiac to pay 50% of drilling costs, up to $7.5 million, to earn a 12.5% working interest in the entire Windsor Block. Within thirty days of fulfilling this expenditure commitment, Zodiac has the option to commit another $7.5 million for an additional 12.5% working interest. Based upon Zodiac spending the entire $15 million, Triangle would remain with a 45% working interest and would continue as operator, and Zodiac would have earned a 25% working interest in the Windsor Block.
"We are extremely pleased to participate with Triangle in the Maritimes Basin program," said Rodgers. "Triangle has done an outstanding job of positioning the company as a leading operator in Eastern Canada and we look forward to a dynamic joint venture partnership. This is a rare opportunity to participate in the exploration and development of a basin scale opportunity with a spectrum of play types that includes a vast shale gas resource."
Nabors rig #4, which has a depth rating of 3,600 meters (12,000 feet), has been contracted by Triangle for the balance of 2008. The first well is expected to spud in late July and is a 3,000 meter (10,000 feet) vertical test that targets the deeper and considerably thicker shale package, in an undrilled fault block north of Triangle's first two vertical test wells. All licensing and regulatory approvals have been received for this drilling location and the lease is now being prepared. Subsequent wells are expected to test the gas content and productivity of the Horton Bluff shales in various locations across the Windsor Block, and also to evaluate potential overlying conventional oil and gas reservoirs. At least one horizontal well is expected to be drilled.
"We are excited to have Murray and his Zodiac team as our partner as we move forward in the Maritimes Basin," said Triangle Chairman and CEO Mark Gustafson. "We now have a partner who can assist us in accelerating the drilling program and who can also contribute significant technical expertise as well."