According to G. Warfield “Skip” Hobbs, he’s just “caught a whale with a fly rod.”
Hobbs, described how his small company and its joint venture partner recently got involved in two large plays in the offshore of Nova Scotia.
Hobbs, president of New Canaan, Connecticut-based Ammonite Corporation, was the banquet speaker at the Central Atlantic Conjugate Margins conference in Halifax.
In his speech, Hobbs, also an AAPG past officer, addressed global trends in petroleum consumption, the demographics of an aging pool of geoscientists in the oil and gas industry and the challenges that lie ahead, including the recruitment of young earth scientists.
Those weren’t just casual, academic observations.
In July, Ammonite Corporation and its partner, Catheart Energy, of Sugar Land, Texas, were awarded two offshore exploration licenses by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB), the joint federal-provincial offshore regulator.
The licenses are located on the continental shelf offshore Nova Scotia, close to the Sable Island natural gas producing complex. Ammonite and Catheart were the successful bidders in the CNSOPB’s public licensing round and won the two shallow water licenses, with a combined work commitment of C$216 million.
In an effort to promote renewed interest in the Nova Scotia offshore, the CNSOPB instituted a new type of licensing round similar in concept to that of the UK’s 24-month promote bidding round in the North Sea – by lowering the entry fee and not requiring the companies to drill wells, the CNSOPB has opened up the Scotian Shelf to juniors and mid-size E&P companies.
During the past couple of years the government of Nova Scotia, together with the CNSOPB, have improved the offshore data management system, exporting the data to a digital format and making it available online to industry.
“We’re in competition with the rest of the world,” said Dave Brown, AAPG member and senior geologist with the CNSOPB. “We recognized that the industry had changed, and that we had to go out to attract industry.”
Standing with the Big Boys
The shallow waters of the Scotian Basin – an area the size of the Gulf of Mexico – contain 205 wells, with historical oil production from the Cohasset-Panuke Field and current natural gas production from the Sable Project.
To date, 10 Tcf of natural gas and 381 million barrels of oil have been discovered in the shallow water portion of the Scotian Basin.
In 2006, the CNSOPB released its assessment of the Scotian Basin’s deepwater component, estimating its resource potential at 17 to 57 Tcf of natural gas and 1.3 to 4.5 billion barrels of oil.
Ammonite and Catheart both are junior, privately held E&P companies. They join the ranks of the other license holders in the Nova Scotia offshore, which include ExxonMobil, EnCana, Canadian Superior, Hunt Oil, Shell, Marathon and StatoilHydro.
Ammonite and Catheart are bullish on the Scotian Shelf – the companies actually bid wells on each of the two exploration licenses. That’s because the CNSOPB has assigned contingent resources to each of the two blocks, based upon the existence of 3-D seismic data and historical wells with good production tests.
“Although the very large potential oil and gas reserves on the two parcels cannot be classified as ‘proved’ due to the limited production testing and SEC regulations, the blocks we have acquired are as good as it gets for an exploration license,” Hobbs said.
“We have all the geoscience skills in-house to handle the exploration phase, from seismic data acquisition up to drilling,” he continued. “However, operating a complex and very costly North Atlantic drilling campaign – for a company our size – would not be prudent, unless we significantly staffed up.
“Whatever the path forward, we intend to ensure that these assets are fully evaluated with every leading edge technology.”