Canadian Imperial Venture announced that drilling of a well on Shoal Point, Port au Port Bay, is planned to be commenced in late September, subject to receiving the required approvals from the CNLOPB and the Government of Newfoundland and Labrador. The 2200m test is a follow-up to the 2008 discovery of an approximately 500m thick oil-bearing section in the Green Point shale formation in the 2K-39 well. While drilling this section with an overbalanced drilling fluid column, this formation produced approximately 54 barrels of oil into the well bore, indicating that the Green Point shale formation is capable of producing even without being subjected to the stimulation techniques which are usual in shale reservoirs. The 2K-39 well, like all other modern wells in western Newfoundland, was not designed for evaluation of the Green Point shale unit and due to hole conditions, it was impossible to run a full suite of open-hole logs or to test the prospective section.
The new well, designated 3K-39, on the other hand, will twin the discovery well through the Green Point section and is specifically designed for its evaluation. Data acquisition will include well cuttings, cores, open hole logs and well tests. Depending on results, the well may be stimulated by hydraulic fracturing ("fracing") and completed for future production. An independent engineering evaluation by AJM Petroleum Consultants provided an Unrisked Resource Estimate for Discovered Oil Industry-In-Place of 1.6 Billion barrels (Best Estimate) within a range of 500 Million barrels (Low Estimate) and 5.2 Billion barrels (High Estimate). It is currently not known how much of the discovered resource, if any, is recoverable. The 3K-39 well will provide important information on this topic.
Financing of the project has been accomplished through a farmout by CIVC and SPE of a portion of their interests in the Shallow Rights in EL1070 to Dragon Lance Management Corporation ("DLMC") of Nisku, Alberta. Drilling operations will be managed by DLMC who also managed the drilling of the 2K-39 well which was accomplished without any significant health, safety or environmental incidents. Since the new well will be drilled from the same surface location as the earlier well and will penetrate a near-identical sub-surface section, geological, engineering, environmental, and safety risks are minimized.
"Although production of oil from the Green Point was established at Shoal Point and Parson's Pond over 100 years ago, technology has enabled this type of oil-in-place unconventional play to achieve rapidly rising prominence in North America. The Green Point compares well with established producing analogues elsewhere in most important geological characteristics and the estimated oil-in-place resource is huge. Clearly, this is an exceptional play and I am happy that we are on our way to advancing it with this financing and
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