Mid-sized drilling companies dissolving9/14/2012
STEADYand#8200;BROOK One of the challenges of exploring western Newfoundland for oil and gas is a lack of mid-sized partners, said Patrick Laracy.
Laracy said his company, Vulcan Minerals Inc., as a junior petroleum and minerals explorer, has a difficult time finding mid-sized companies to drill.
“There are fewer and fewer intermediate companies,” he said.
“Over the years they’ve been purchased by bigger companies or merged to form bigger companies.”
The disappearance of the “middle class” companies is because of high-risk prospects, he said.
And, Laracy said, there has not been a large enough discovery offshore in western Newfoundland to attract the attention of multinational companies like Shell.
“It’s a cat and mouse game,” he said, noting it takes $50 to 60 million to make a discovery offshore.
Laracy spoke at Western Newfoundland Oil and Gas Internation Symposium at Marble Mountain Thursday.
His takeaway was that his business is looking to do things a little different in hopes of exploring the region further.
Traditionally, junior companies find land and explore it, and then look for a company to drill after.
Laracy is hoping to look for a company with money to invest in a project first and then start exploring areas.
“If you can’t find a partner, there’s nothing you can do anyway because you don’t have the capital to do it,” he said. “The problem is capital — there’s always land for sale.”
With more money and resources from a partner, Laracy hopes to be able to explore and develop more of the western region.
(The Western Star)