Petro-Canada Hits at Terra Nova

Petro-Canada, operator of the Terra Nova oil field offshore Newfoundland has successfully drilled the first well, Terra Nova C-69 1, into the separate Far East fault block of the Terra Nova oil field.

The Far East well encountered approximately 80 metres of Jeanne d'Arc reservoir sands, confirming the presence of hydrocarbons within this portion of the Terra Nova field. This well is not sufficient in itself to determine reserves in the Far East block, although previous pre-drill estimates have placed potential in the range of 100 million barrels.

If additional drilling confirms sufficient reserves, oil from the Far East portion of the field would be incremental to the Proved and Probable reserves of 370 million barrels already identified and being developed within the Graben and East Flank portions of the field.

Terra Nova C-69 1 was not flow tested, but data from well logs and sampling in the well bore suggest that the Far East sandstones are comparable to those of the reservoir sands in the delineated portions of the field.

"The results of this well are very encouraging for the Terra Nova owners," said Petro-Canada Executive Vice President, Norm McIntyre. "In confirming the likelihood of additional reserves in the Terra Nova field, this Far East well provides further support for the economics of the Terra Nova development. We're very pleased."

McIntyre said additional drilling is required to further establish the reserve potential of the Far East, and to provide the wells needed to produce those reserves when production capacity becomes available on the Terra Nova Floating Production, Storage and Offloading (FPSO) vessel. "This discovery enhances the overall ability of Terra Nova to sustain plateau production life beyond 2006, as identified in the current field development plan."

The Terra Nova owners are: Petro-Canada (operator) (33.99%); ExxonMobil Canada (22%); Husky Oil Operations Ltd. (12.51%); Norsk Hydro Canada Oil & Gas Inc. (15%); Murphy Oil Company Ltd. (12%); Mosbacher Operating Ltd. (3.5%); and, Chevron Canada Resources (1%).

The Terra Nova oil field is located on the Grand Banks, 350 kilometers east-southeast of St. John's, Newfoundland. Discovered in 1984, Terra Nova is the second largest oil field off Canada's East Coast.