7/31/2019 Interview with George Langdon, President, Shoal Point
Energy Ltd.
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8 EARTH-RESOURCES.CA JULY/AUGUST 2012
PERSPECTIVESINDUSTRY INTERVIEW
Q: WHAT ABOUT WESTERN NEWFOUNDLAND WAS ATTRACTIVE TO THE
COMPANY?
A: People on our team have been familiar with the favourable
geology
for quite some time, having been educated in the province. I got
back
involved in the early 90s with small exploration companies
when
exploration was done by major oil companies for conventional
targets.
We became aware of the unconventional potential of the geology
about
four or five years ago when we drilled another well, and we
realized it
had similar potential to the big shale basins that are being
developed
in the U.S. Its pretty much equivalent to the Utica (shale), its
the same
rocks, more or less.
Q: IS THERE ANYTHING UNIQUE ABOUT THIS PLAY?
A: The target Green Point Formation is very thick. Again lies
within a
unit, the Humber Arm Allochthon, where the original thickness of
the
sedimentary package was thickened several times by stacking, or
what
we call imbrication. We can see it in the onshore geology and
offshore
from seismic data in western Newfoundland. And when we drill
our
latest data shows us the great thickness of the Green Point. Its
probably
related to this structural thickening. Thats something that I
havent
personally seen to this extent anywhere else in a shale or a
resource
play. I think this is making it very uniquely attractive to us.
Great
thickness gives you the possibility of very large volumes of oil
in place.
Q: ITS AN OILINSHALE PLAY AS OPPOSED TO A GASINSHALE PLAY?
A: Yes, our data indicated it contains mainly oil, with
associated gas.
The evolution in America has gone from gas-in-shale plays,
which
have become so voluminous they have driven down the price of gas
in
America, to liquids plays or oil plays, which are more valuable
right now
because the price of oil is relatively higher.
Q: IS STIMULATION REQUIRED TO GET AT THE OIL?
A: Yes, we ultimately think stimulation will be required, like
all the
other liquid plays, although we do see some natural
permeability.
There are similar plays, for example, in Western Canada that
are
analogs and which flow without stimulation, but if you stimulate
them
you potentially get a lot of oil out. We understand that
stimulation
will be allowed under the current regulations so we are planning
our
exploration program to include stimulation.
Q: WHAT HAS BEEN THE COMMUNITYS RESPONSE TO THE COMPANYS
PRESENCE IN WESTERN NEWFOUNDLAND?
A: Nothing but positive so far. With regard to our next round
of
operations, due to start late this year, we havent done all of
the
advance preparation of community meetings and so on, but we
plan
to do all that. With regards to what weve done in the
pastweve
drilled two wells at Shoal Pointits been absolutely no problem
at all.
Weve worked carefully within the community and I think the
land
surface impact has been minimal. We intend to be extremely open
and
diligent in telling people what we are doing and how we are
conducting
operations in an extremely positive manner.
Q: WHAT IS THE TIMELINE FOR THE PROJECT?
A: Right now there are several key timelines for this year. One
is to finish
the testing program on the current well, the 3K39 well at Shoal
Point. We
are now applying for regulatory approval to frack some time
later this
year. We have two other new wells planned on our adjoining
properties,
which could start late this year or early in the spring after
the harshest
part of the winter is over. So, over the next nine to 12 months,
we expect
to complete the evaluation of one well and drill two new wells,
and then
the stimulation of all three wells.
Q: NOW THERE ARE A NUMBER OF COMPANIES IN WESTERN
NEWFOUNDLAND ALL LOOKING FOR OIL AND GAS. HOW DO YOU DIFFER
FROM THOSE COMPANIES?
A: I think we differ because for the last several years now weve
focused
entirely on the Green Point shale. Weve made certain
commercial
arrangements, such as farm-ins and so on and in some cases taken
only
shallow rights. We focus entirely on the Green Point shale. At
this point
that separates us from the other companies.
Q: TECHNICALLY ITS AN OFFSHORE PLAY, BUT IT CAN BE ACCESSED
FROM
THE LAND. THAT MUST MAKE A DIFFERENCE IN TERMS OF COSTS AND
RISK.
A: I cant say up to now that weve drilled any cheap wells. They
are
very expensive. That has to do with us being the first in this
basin, the
rocks are difficult to drill, the borehole tends to fall apart
if [we] leave it
open for a while. There are drilling issues like this that we
are getting
a handle on and these costs, we are confident, will come down
rapidly
as we continue to drill these wells. But yes, over time there
should
be tremendous cost savings from drilling from the shoreline
because
there is no difference than drilling under a lake or simply
deviated
boreholes. The rocks dont know the difference. As long as were
not
drilling extremely difficult horizontal wells, which we dont
plan [on
doing], the drilling should be cost contained and very, very
safe from an
environmental viewpoint.
BY SUZANNE RENT
P h
C
i b
d
In each issue, Earth Resources interviews a leader in Atlantic
Canadas energy
industry. For this issue, we spoke with George Langdon,
president of Shoal Point
Energy, which is exploring the Green Point Shale in Western
Newfoundland.
George Langdon,
President, Shoal Point Energy Ltd.
7/31/2019 Interview with George Langdon, President, Shoal Point
Energy Ltd.
3/3
EARTH-RESOURCES.CA JULY/AUGUST 2012 9
Q: SHOAL POINT OWNS THE LARGEST PORTION OF LANDS IN WESTERN
NEWFOUNDLAND NOW?
A: Yes, I believe we do by sheer acreage. Were up to about gross
interest
in 720,000 acres (291,374 hectares). Our net interest is over 90
per cent ofthat. I believe its the largest land holding.
Q: IS THERE MORE RISK INVOLVED WHEN YOU TAKE ON BIGGER
PROJECTS
LIKE THAT?
A: Apart from the geological risk, which we feel has been
reduced
by our recent work, the major risk is fiscal and lies in being
able to
properly fund your work projects through stock sales or joint
ventures
until commerciality is reached. But the large scope gives you a
huge
opportunity if someone comes along and wants to do business with
you.
Q: DO YOU FEEL YOU HAVE A COMPETITIVE L AND POSITION?
A: Weve tied up more than enough land for us to work with.
There
are other land options coming up that we may be interested in
but we
are quite happy to run with what we have. Before you have your
land
package, you want to be ahead of the curve. But now that we have
it,
weve been really open in divulging all the information we have.
I think
the time has come to get the message out to shareholders on a
largescale and to potential buyers and potential joint venture
partners. Youre
going to see us doing a lot more of that.
Q: WHAT DO YOU THINK THE FUTURE IS FOR WESTERN NEWFOUNDLAND
AND OIL AND GAS?
A: I think if we can show proof of concept with our continued
testing
of the wells, and establish that oil could be produced
commercially, the
future looks very bright because of the sheer volume of the
play, and the
potential resources in place, and hence, potential reserves that
might be
recoverable. With further confirmation over the next year or so
I believe
we would be on the cusp of a major industry.E
SHOAL POINT ENERGY LAND POSITIONProperties can be drilled from
the shore into the shallow water, Western Newfoundland.
Parsons Pond
St. Pauls
Sallys Cove
Trout River
Little Port
Chimney Cove
Green
Point
EIA
Possible
Drilling Locations
are Underlined
Shales Flowing Oil
Shoal Point 3K-39
Shoal Point
3K-39
