Corridor makes plans to develop Old Harry Prospect

By: Tom Mason

It’s a tantalizing clue to the riches that may lie beneath. At six locations in an area called Old Harry, oil seeps out of the Earth’s crust and into the ocean. The oily trails emanating from 460 meters beneath the Laurentian Channel can be seen clearly in satellite surveillance photos. The area in question is known as “Old Harry”, a name derived from community on the nearby Magdalen Islands. It’s a part of a structure called the Maritime Basin, an area known to contain oil-prone shale source rocks and world-class gas-prone Carboniferous coals. But despite all the promise, Old Harry remains one of the largest undrilled prospects in Eastern Canada.

That is about to change, thanks to the Halifax-based company that holds the lease on much of Old Harry. Corridor Resources is formulating plans to drill in the Newfoundland portion of the structure.

“Corridor has an attractive drilling location on the Newfoundland side of the prospect,” says Corridor president Norm Miller, “and we are preparing to invite potential partners to join us in drilling a well there, hopefully within the next couple of years.”

Old Harry straddles the divide between Newfoundland and Quebec territorial waters, a geographical fact that has presented a serious obstacle to the exploration for Corridor. Even though the company has held the license for the Quebec side of Old Harry since 1996 it has been impossible to explore because no accord exists between Quebec and the federal government. That’s why Corridor is concentrating on the Newfoundland side for now.

Corridor’s holdings on the Quebec side of Old Harry cover an area of 123,550 acres. In 1998 and 2002 the company acquired 1,300 kilometers of modern seismic data along the structure on the Quebec side. The remaining one-third of the prospect lies within the Newfoundland and Labrador sector of the Gulf. Corridor holds an exploration permit issued by the Canada-Newfoundland Offshore Petroleum Board that covers 127,948 acres and carries a minimum work commitment of $1,521,000 to be conducted over a five-year initial term.

Once an agreement with Quebec is in place, Corridor plans to drill an exploratory well at a preferred location on the structure. The company is preparing to file a proposal with the Quebec government and with the National Energy Board to undertake a site survey in 2010.

“On the Quebec side of the prospect, we are encouraged by the fact that the Quebec Government this spring authorized proceeding with environmental studies covering the Quebec sector of the Gulf,” says Miller. “The studies are intended to be concluded by the end of 2011, hopefully opening up significant portions of the Gulf to hydrocarbon exploration. No exploration can take place in the Quebec sector of the Gulf until these studies are completed and until there is an accord agreement between Quebec and Ottawa.”

But regulatory delays haven’t been the only holdup. Technology and infrastructure had to develop as well. A lot has changed since Corridor first purchased the Old Harry lease in 1996. For one thing, offshore technology has advanced to allow drilling in water depths of over 400 meters. And the Maritimes and Northeast Pipeline has opened up markets for Atlantic Canadian natural gas that were impossible to reach a decade ago.

In recent years, Corridor Resources has been a rising star in the largely untapped field of onshore oil and gas in Atlantic Canada. The Halifax-based company has had some impressive successes, particularly in the Sussex area of New Brunswick close to a geological formation known as McCully Brook. The company has begun extracting natural gas from McCully that is being distributed through the Maritimes and Northeast Pipeline to New England. Corridor has also conducted other explorations around the Green Gables deposit off Prince Edward Island and on Anticosti Island.

The Old Harry prospect will allow Corridor to take its place in the more established and competitive offshore industry in Atlantic Canada. The payoff could be high. Estimates suggest that recoverable reserves potential could be in the order of 1.5 to 2 billion barrels if oil, or 4 to 5 tscf of gas.