Mining, O&G Report(VUL& CQV)Mining, O & G Conference Report (CQV & VUL)
On Saturday morning, I attended the 47th annual meeting of the Newfoundland Branch of the CIM, with the intention on listening to presentations by Can.Imp.Ventures (CQV) and Vulcan Minerals (VUL). I had been informed that both companies were presenting an overview of their West Coast oil exploration programs. I was told that CQV had planned to attend but had to cancel due to developments that required key individuals to be out of the province. I am pleased to report however that Mr. Pat Laracy of Vulcan Minerals gave an excellent presentation of the exceptional hydrocarbon potential of the West Coast referencing both CQV and VUL. The session was attended by approximatley 120 individuals, and it was apparent from the audience’s response that Pat’s detailed presentation of the geological and technical merits of the West Coast situation was indeed a highlight of the event.
I will attempt to present a brief summary of some general points along with some specific information on Vulcan.
General Points:
1. The potential of Western Newfoundland as an exploration area for hydrocarbons has been recognized for many years....onshore oil seeps are widespread in the area.
2. Geological information show the required ingredients for significant hydrocarbon potential including a hydrocarbon source as well as mature trap and resource rock.
3. Hibernia sized structures exist on the West Coast, and only with continued exploration will any company be able to tap into a significant basin of oil.
4. The current price of oil, along with the continued efforts of companies like CQV, VUL, AMR and DLOG have refocused industry interest to the West Coast; and we will most likely see major industry players dust off their once-shelved plans for the area. Eg. There is widespread speculation that Pan Canadian overshot their primary drill target in the Shoal Point well that was spudded in February 1999. Many major companies are basking in huge cash flows that will find its way back into further exploration rather than to the Federal and Provincial Tax Coffers.
Specific Points:
1. At the moment, companies actively exploring on the West Coast include CQV, AMR and Deer Lake Oil & Gas (DLOG). Both CQV and VUL are planning new wells for Q1/2001. DLOG is currently re-entereing their 800m well with a view to deepening it to 1400m.
2. Vulcan has committed to drilling a 1000m well, to intersect 3 seismic targets, on its onshore Flat Bay permit, approximatley April 30, 2001. AMR has spudded its first of five planned wells just 20 metres from Vulcan’s boundary at Flat Bay. Their target is a Carboniferous reef which extends into Vulcan’s property but is not the same target that Vulcan will be drilling. It was interesting to hear that Vulcan owns the mineral rights to AMR’s property - if they hit oil, both companies win; if the carboniferous reef proves to be a salt deposit in economic quantities, Vulcan will benefit again - a win-win situation.
3.Vulcan has put together a package on their offshore properties on the West Coast and is currently in advanced stages of negotiations with a major company in this respect.
4. Vulcan will be announcing shortly the closing of a PP (1.4m shares @ 15 cents with a warrent at 20 cents.)
5. Vulcan will be announcing shortly that it has retained a financial advisor who is putting together a flow-thru financing for additional capital for this coming spring’s West Coast drilling program. It is Vulcan’s plan to leverage this funding with a JV partner to drill 2 - 3 additional wells.
Closing Comment
A combination of several factors such as current price of oil, cash flow rich companies, recent discoveries as well as significant hydrocarbon shows all combine to herald in a new era of oil exploration in Western Newfoundland. The onagain-offagain days of exploration in Western Newfoundland appear to have finally given way to what will most likely prove to be the beginnings of an intensive and continuous quest to unlock the elephant-size potential of the area.
Regards,
Len