Black Spruce consolidates west coast energy plays
Company acquires interests totalling nearly 2.4 million acres across region
Black Spruce Exploration says it has the expertise and resources required to successfully develop energy opportunities on Newfoundland’s west coast where others have faltered.
"We think that’s a significant achievement that we’ve been able to accomplish in consolidating the junior oil and gas exploration opportunities on the western coast of Newfoundland," Black Spruce CEO David Murray told Noia conference delegates in St. John’s on Tuesday.
'We have people with the pockets to take the risk that’s appropriate, that’s necessary, in these types of start-up operations.'—Black Spruce Exploration CEO David Murray
Black Spruce has reached deals with several firms to acquire interests in nearly 2.4 million acres in western Newfoundland.
"What all of these companies have collectively lacked is capital," Murray said.
He later told reporters that Black Spruce has the "skill and the deep bench strength" that smaller firms don’t.
"We have people with the pockets to take the risk that’s appropriate, that’s necessary, in these types of start-up operations," Murray noted.
Black Spruce’s acquisitions, he said, include:
- a deal that closed at the end of May with Ptarmigan Energy to add acreage for conventional offshore oil opportunities;
- a letter of intent with Deer Lake Oil and Gas to acquire all of its outstanding shares;
- a farm-in agreement with Enegi to eventually earn a 60-per-cent working interest on its properties;
- a similar agreement with Shoal Point Energy that will see Black Spruce earn a 50-per-cent working interest for a four-well drilling program. The next eight wells, Murray said, will get the company a 60-per-cent working interest.
Shoal Point Energy recently attracted the ire of Newfoundland and Labrador regulators when it incorrectly stated that permission had been granted for a drilling program on the west coast.
Murray declined to comment on that incident, or Shoal Point in general.
"We have no opinion on another company," he said. "They’re our business partner. If they make mistakes, they’re responsible for a response, and answer to their shareholders and to their board, not to us."
A recent CBC News investigative report also highlighted past business dealings of Shoal Point’s board chairman, in his previous role with another company.
Environmental documents not yet submitted
Asked about the status of Black Spruce’s controversial plans for fracking on the west coast, Murray said the company does not yet have any firm time frame on when it will submit environmental assessment documents.
"We’ve begun a process already to get wells approved," he said. "It’s not simple."
Murray said he hopes drilling can begin by September or October, although that will be largely dependent on regulatory and government approvals.
And Murray is not concerned about being turned down.
"I don’t think that will happen," he said. "Again, there’s rules and you just have to comply with them."
Premier addresses fracking issue
Earlier Tuesday, Premier Kathy Dunderdale said regulations concerning fracking are "certainly something that is going to have to be addressed."
She said it is important to provide clarity to companies, although not the top priority.
"That doesn’t trump the interests or the concerns of the people of the province," the premier said.
The government doesn’t have a "hard and fast" position at this point, she noted.
"You know, I’m learning about fracking, and I think it behooves all of us to see what the science says about it all," Dunderdale said.
Some residents of the west coast have expressed concern about fracking plans in the region.