Gas hunt scaled back
Canadian Superior dropping offshore exploration licences
By JUDY MYRDEN Business Reporter
Tue. Dec 22 - 4:45 AM
Canadian Superior Energy Inc. is paying the province $13 million in order to abandon two natural gas exploration licences it holds just off of Nova Scotia.
The Calgary company, Nova Scotia’s largest offshore landholder, is allowing the licences to expire because low natural gas prices and high exploration costs have led them to focus "on Trinidad and other areas of greater oil prospectivity," the company announced Monday in an operations update.
The two offshore licences being abandoned are the deepwater Mayflower block and the Marauder parcel located in shallower water.The oil company promised to spend $41 million on the Mayflower site after taking out a licence in January 2002 and they promised to spend $12 million on the Marauder block when they took out that licence in 2004, Debbie Mountenay, Canada-Nova Scotia Offshore Petroleum Board spokeswoman, said Monday.
Canadian Superior will have to pay the province slightly more than $13 million to surrender the licences. The figure is based on 25 per cent of the value of the work expenditures minus the work done on the two parcels, Ms. Mountenay said.
The forfeiture costs for the Mayflower block is slightly more than $10 million and $3 million for the Marauder block, she said.
After an offshore licence expires, the lands go back to the province.
However, the junior oil patch firm wants to extend the license on its remaining acreage until Dec. 31, 2010. Known as the Mariner block, it is located 290 kilometres southeast of Halifax.
In February 2009, the company indicated it had plans to drill an exploration well at Mariner in 2010 but that appears to be on hold because the company only has "so much in its coffers" and the board of directors decided to focus on areas other than Nova Scotia, Tonya Pizzey, Canadian Superior spokeswoman, said on Monday.
In 2002, Canadian Superior partnered with El Paso Corp. of Houston to drill on the site, but the U.S. company abandoned the $30-million project because there weren’t enough deposits to proceed with development.
In the fallout, shareholders launched a legal action, claiming Canadian Superior issued "false and misleading statements" about the potential of the Mariner well. The class action lawsuit was settled in 2005, with Canadian Superior paying US$3.2 million without admitting liability.
Canadian Superior ended up buying out El Paso’s interests in the area.
Since March 2009, Canadian Superior has been restructuring under creditor protection and is currently searching for a new president and CEO. In late April, Greg Noval and Mike Coolen were forced out by Canadian Superior’s board.
Along with its small conventional production in Alberta, Canadian Superior now holds one block off the coast of Nova Scotia and has licences in Trinidad and Tobago.
