EnCana, Marauder reunite for well

EnCana is digging deeper to find out what Deep Panuke holds.

Two months after the super-independent and industry minnow Marauder Resources East Coast were unable to complete a deal to drill a crucial well in Nova Scotia’s offshore, the two have figured out a way to make things work.

The proposed Grand Pre well could settle once and for all whether EnCana’s Deep Panuke gas discovery — which, despite its name, is actually a shallow-water play — has commercial production.

The 935 billion cubic foot discovery was shelved in early 2003 to give EnCana a chance to explore for more reserves and seek more favorable regulatory terms that would improve the economics of the C$1.1 billion project.

Those chances got a lift last December when Marauder emerged, offering to pay 70 percent of the Grand Pre well costs, variously estimated at between C$30 million and C$50 million.

But Marauder scrapped those plans in May, saying it was unable to arrange financing. Robert Shields, president of Marauder, said July 25 that what has changed is that EnCana is “going to pay a bigger chunk of the well costs,” while Marauder will now qualify for a 20 percent working interest in the exploration license, down from 35 percent under the previous farm-in arrangement.

EnCana spokesman Alan Boras told Petroleum News that the Dominion J-14 well should be spudded within a year “depending on rig availability.”

He said the results will “contribute to our overall knowledge of the opportunity and help bring greater certainty” to Deep Panuke.

—Gary Park