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February 8, 1999
(Mines and Energy)

PanCanadian and partners spud well at Shoal Point

Roger Grimes, Minister of Mines and Energy, today announced that PanCanadian Petroleum Limited and its partners Encal Energy Ltd., Newfoundland Hunt Oil Company and Mobil Oil Canada Properties have spudded the Shoal Point K-39 well, located at the northern tip of Shoal Point on the Port au Port Peninsula in western Newfoundland. "This represents a significant exploration effort by these companies," said Mr. Grimes.

In 1995, the Hunt/PanCanadian Port au Port #1 well located near Cape St. George 30 kilometres to the southwest of the Shoal Point location, encountered one hydrocarbon zone at a depth of about 3,500 metres, as well as several other reservoirs.

The minister added that "Port au Port #1 proved the presence of oil and gas in the deeper rocks of the area. Previous drilling had encountered oil shows in the shallower layers."

Although follow-up drilling to the Port au Port #1 discovery did not result in further discoveries, it did contribute to a better understanding of the area's geology. Additional seismic data, acquired in the fall of 1996, detected a large structure beneath Port au Port Bay that could be drilled by a land based rig from Shoal Point. It is this large structure that is now being directionally drilled to a planned depth of about 2,400 metres. The well will take about three months to drill. The companies completed an 8.2 kilometre access road to the location in December of 1998.

"I am excited by the province's west coast petroleum potential and take great pleasure in welcoming PanCanadian and its partners back to our shores, and wish them every success," added Mr. Grimes.

Media contact: Carl Cooper, Communications, (709) 729-4890.

1999 02 08 4:15 p.m.

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