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Troubles in Nova Scotia EnCana well lags behind schedule and overruns budget, but partners ready to see job completed; Marathon plans only other exploration well in basin this year Gary Park Petroleum News Calgary Correspondent
Reeling from the confusion swirling around the Canadian Superior Energy well, offshore Nova Scotia has been rocked by a setback to the only exploration well under way in the basin.
At the same time the industry, government and analysts were trying to make sense out of Canadian Superior’s decision to plug and abandon its Mariner I-85 well drilled in partnership with El Paso, EnCana confirmed the Weymouth A-45 well is behind schedule and over budget by an unknown amount.
Instead of reaching its targeted depth by late February, completion is now unlikely before mid-April, a spokeswoman for EnCana told Petroleum News.
Partners in A-45 are EnCana 55 percent, Shell Canada 30 percent and 15 percent held by Norway’s Ocean Rig, whose semi-submersible Eirik Raude is drilling the well. Problems blamed on weather, geological conditions Ocean Rig said that despite the problems, which EnCana blamed on challenging weather and geological conditions, data gathered during drilling has convinced it to maintain full participation in the well so that it can share in the “full potential of any discovery.”
It insisted the delay was not linked to the performance of Eirik Raude, which it described as “satisfactory.” The well is being drilled in 5,600 feet of water and is currently close to 19,500 feet on its way to a projected depth of 21,736 feet.
Citing confidential agreements, the EnCana spokeswoman declined to say how much was budgeted for the well, although she said wells in the region often cost in the range of C$80 million.
Ocean Rig said that under a revised agreement it has a right to cap its cost at US$13.5 million and the right to sell its interest.
Shell Canada farmed into the well last October, ready to take on the “high risk” project in return for a “possible high pay off opportunity,” Chief Executive Officer Linda Cook said at the time.
The gamble is well understood by Shell, which abandoned the 100 percent owned C$90 million Onondaga B-84 well in May 2002 after deeming the gas shows it encountered to be uneconomic. Only one new wildcat scheduled for ’04 Attention is now turning to the Crimson K-81 well, which a partnership of Marathon Oil 40 percent, EnCana 35 percent and Murphy Oil 25 percent expects to spud in May — currently the only new wildcat scheduled for 2004. Houston-based Transocean said March 11 it has contracted the Deepwater Pathfinder rig for 110 days to drill the well on the same exploration license as the Annapolis-24 wildcat discovery by Marathon, EnCana, Murphy and Norsk Hydro Oil & Gas Canada, which Marathon has estimated could be part of a block holding 5 to 15 trillion cubic feet.
Just reaching this point with Crimson K-81 was a challenge for Marathon, which had to fend off efforts by Ocean Rig to persuade the Canadian Transportation Agency to give preference to Eirik Raude over the Deepwater Pathfinder.
Marathon also has interests in two other exploration properties in the deepwater Scotian Slope — 100 percent of one license that carries a work commitment of C$176.7 million and 50 percent of a second license with a work bonus bid of C$193.6 million. The initial expiry period for both is the end of 2006.
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