Shell Acquires Stake in Orphan Basin Offshore Newfoundland

Shell Canada Limited has acquired a 20 per cent interest in eight exploration licenses in the Orphan Basin located in the deepwater region offshore Newfoundland and Labrador. The interest in the lands was acquired under a farm-in agreement with ExxonMobil Canada and Imperial Oil Resources.

"This farm-in is consistent with Shell Canada's renewed focus on growth - in this case, we're broadening the scope of our exploration activities by gaining access to a new, unexplored deepwater basin," says Dave Collyer, Vice President of Shell Canada's Frontier division. "Advances in technology are allowing industry to pursue these challenging, but potentially high-reward, deepwater ventures. We look forward to returning to offshore Newfoundland, an area that we last explored in the early 1990s."

The eight land parcels in the Orphan Basin, located approximately 325 km offshore Newfoundland, were initially acquired by Chevron Canada Resources (50 per cent), ExxonMobil Canada (25 per cent) and Imperial Oil Resources (25 per cent) in a land sale in December 2003. Under the terms of the agreement, ExxonMobil and Imperial Oil will each reduce its share by 10 per cent to provide Shell with its 20 per cent interest.

Current exploration plans call for 3-D seismic acquisition in the summer of 2005.