Vulcan-Successful bidder 12/18/02
By Moira Baird
The Telegram
The hunt for oil and gas in Newfoundland’s west coast received a boost with
the sale of eight new parcels of land.
Those onshore parcels fetched more than $3.3 million in work commitments
over the next five years by three junior exploration companies.
Altogether, the companies bought 202,000 hectares of land in the Parson’s
Pond area north of Gros Morne National Park, the Deer Lake area, and the
Bay St. George area.
The successful bidders are:
• Contact Exploration Inc. spent more than $1.4 million for three parcels —
two in the Parson’s Pond area, the other in the Bay St. George area.
The Calgary-based company bought the highest-priced patch of land
auctioned this year. It borders Gros Morne National Park and was recently
described as a “prize” during a mining conference presentation by a Mines
and Energy petroleum geophysics consultant. Contact also has land in
Alberta and Nova Scotia, and describes itself as having a focus on East
Coast onshore exploration.
• Vulcan Minerals Inc. made more than $1.1 million worth of work
commitments for two parcels in the Bay St. George area. The company
already has exploration rights in the area. Three years ago, the company
drilled the Flat Bay No. 1 discovery well in the Bay St. George Basin. Drilling
was suspended, but Vulcan says it plans to test the well in 2003.
• Deer Lake Oil and Gas Inc. bought three parcels for a total of $763,135 —
one parcel in the Parson’s Pond area, the other two in the Deer Lake area.
Until this land sale, the company was the only one actively looking for oil in
those areas. Deer Lake Oil and Gas has a 17.39 per cent stake in the
Parson’s Pond parcel and is teamed up with several companies including
Pennsylvania-based East Resources Inc.
The results of the auction, which closed Dec. 13, were announced Tuesday
by Mines and Energy Minister Lloyd Matthews.
Thirteen parcels of land were included in the sale.
It’s the first onshore land sale since 1996. Of the 36 permits issued in three
previous land sales, only four are still active.
Since 1989 more than $31 million has been spent on onshore oil exploration
on the province’s west coast.
Those bids consist of work commitments for five-year exploration permits. If a
company drills a well during that period, the permit is extended by two years.
mbaird@thetelegram.com