Shoal Point Energy marches on with plans to develop Green Point shale oil despite setbacks
Shoal Point Energy CEO Mark Jarvis has a warning for whoever takes over fulltime for Newfoundland and Labrador’s expremier Kathy Dunderdale, who resigned suddenly in January. “This fracking moratorium has hurt us and it’s made the province a difficult jurisdiction for junior oil and gas companies,” Jarvis says.
The provincial government put the moratorium in place last fall saying it wouldn’t accept any applications to frack wells until a public review is completed. That was bad news for Jarvis’ Vancouverbased junior. It is looking to develop the Green Point shale play in western Newfoundland and Labrador, and because it’s a shale oil play it must frack the tight rock to produce from it.
Shoal Point also learned in December that the Canada-Newfoundland and Labrador Offshore Petroleum Board rejected the company’s application to extend its rights to explore on licence 1097R until January 15, 2015.
The decision cost Shoal Point the licence, which comprised of 499,000 acres and stretched from the town of Corner Brook up the coastline to Gros Morne National Park. However, the company’s desire to frack wells near the park was controversial.
It’s been a tumultuous nine months for Shoal Point. At its 2013 annual general meeting, president George Langdon and chief financial officer Brian Murray resigned and Jarvis was appointed as the new CEO. The company also moved its head office to Vancouver from Toronto. And then it got the news of the fracking moratorium and the loss of one of its three licences in the Green Point shale.
The loss of EL 1097R is significant. It reduced the oil Shoal Point says it could potentially recover from 968 million barrels to 202 million. The company’s partner in the shale play, Black Spruce Energy, has committed to drill a minimum of three wells. But it can’t do anything with a fracking moratorium in place. “We’re just going to have to be patient and let the politics play out,” Jarvis says. “We’ve got enough cash [to operate] for a year and a half. But we are starting to look at other jurisdictions because we can’t be a one-trick pony.”