RE: HUGE NEWS! Tiny PanTerra sees potential for next big natural gas find
Shaun Polczer, Calgary Herald
Published: Saturday, April 12, 2008After big discoveries in British Columbia and Quebec, a small Calgary company is hoping Saskatchewan will be the next shale gas hot spot.
That's because tiny PanTerra Resource Corp. has almost half a million hectares of prospective land near Moose Jaw it says could hold more than 60 trillion cubic feet of unconventional gas reserves.
"Shale gas is basically unknown in Canada," compared to the United States, where it is well-established, says vice-president Herve Collet. "We looked around and said there are other places to do this."
"It's a new game in town," adds president Fred Rumak. "People are finally waking up to it in Canada."
PanTerra is a latecomer to the shale gas party after big discoveries in other parts of the country.
In February, Houston-based EOG Resources said it might have tapped more than six trillion cubic feet in an area of B.C. known as the Horn River basin, in the extreme northeast portion of the province.
On Wednesday, Apache Corp. said test wells in the region produced as much as eight million cubic feet per day.
Also last week, Denver-based Forest Oil said the St. Lawrence lowlands in Quebec could hold four trillion cubic feet after a pair of experimental test wells drilled this winter yielded commercial quantities of gas.
The Quebec discovery sent the shares of Calgary-based Questerre Energy, which has a stake in the find, soaring from about 30 cents to $2.45 in less than a week. Now PanTerra, which closed at 13 cents on Friday, is hoping for more of the same.
"He (Questerre CEO Michael Binnion) shopped that play for eight years before people would listen to him," Collet says. "We hope it won't take us that long."
After three years and sinking $12.5 million into the Saskatchewan shale play, Rumak says the company is ready to follow Questerre's route to commercial success by bringing in a strategic partner. "We're looking for our Forest Oil."
The company has been in discussions with potential cohorts, with interest from larger American players.
The U.S. has had considerably more experience with unconventional gas and several large independents are looking north, outside their traditional hunting grounds in Texas and Utah.
Last August, Dallas-based Hunt Oil Co. outbid PanTerra for a $4.1-million exploration parcel adjacent to its existing land.
On Monday, the Saskatchewan government took work commitments totalling $5.7 million for four gigantic exploration parcels covering more than 250,000 hectares.
Rumak and Collet are hoping the $265-million sale result will continue to shine the spotlight on the shale potential of the province.
Geologists have known for decades that shale rocks hold significant quantities of natural gas, but getting the gas out of the ground has so far proven to be an insurmountable technical challenge.
That's because the rocks have to be fractured, or broken, to release the gas and allow it to flow to the surface.
Much of the renewed interest is due to new drilling and completion techniques that are unlocking the shale treasure chest.