PanCanadian Decides Against Fourth Well

PanCanadian has chosen not to drill a fourth well this during the first quarter of 2002. The company is going to reassess its offshore prospects. PanCanadian was committed to drilling three wells in the 2001-2002 period, and had options on the fourth, which it has deferred. The company holds 17 blocks offshore Nova Scotia, including the wholly owned Deep Panuke natural gas prospect with estimated recoverable reserves of 1 trillion cubic feet. Deep Panuke is expected to flow 400 million cubic feet per day when production starts in 2005.

In 2001, PanCanadian drilled three wells; two dry, and the Queensland prospect that spudded, or broke ground, mid-December. Drilling at the shallow water well is expected to reach a target depth of 4,000 meters by March, when PanCanadian will discover whether it hit a payload. The company also holds a 26% interest in the Marathon-operated deepwater well Annapolis, the first deepwater well to be drilled offshore Nova Scotia. The well spudded December 26, 2001.

The company is sticking to its January 2001 plan submitted to provincial and federal regulators of drilling 8 to 15 wells during three-to-five years, for a total of C$350 million to C$450 million. PanCanadian is looking carefully at where it will explore for natural gas along the huge tracts of ocean floor, where each well can cost C$20 million to $50 million.