11 September 2008

Results of Labrador parcel sale: offshore board

The following was released today by the Canada-Newfoundland and Labrador Offshore Petroleum Board.

C-NLOPB Releases Results of 2007 Land Sale for Labrador Offshore Region (Call for Bids NL07-2)

The Canada-Newfoundland and Labrador Offshore Petroleum Board today announced the results of the 2007 Call for Bids NL07-2 (Labrador Offshore Region) for exploration rights in the Newfoundland and Labrador Offshore Area. Bidding closed at 4:00 pm on September 10, 2008 and bids were received on 4 parcels totaling $186,430,680.

The Bids represent the expenditures which the bidders commit to make in exploring the parcels during the initial 6-year period of a 9-year term exploration licence. If companies discover significant quantities of petroleum resources as a result of the exploration work, they may then seek a Significant Discovery Licence from the C-NLOPB. Any Significant Discovery Licences issued in respect of lands resulting from these exploration licences will be subject to rentals which will escalate over time.

The following bids have been accepted:

Parcel 1

Husky Oil Operations Limited (100%)   $10,162,800

Parcel 2

Vulcan Minerals Inc. (50%) and Investcan Energy Corporation (50%)  $9,601,000

Parcel 3

Husky Oil Operations Limited (75%) and Suncor Energy Inc. (25%)  $120,166,880

Parcel 4

Chevron Canada Limited (100%)  $46,500,000

Total  $186,430,680

Subject to Ministerial approval and the bidders satisfying the requirements specified in the Call for Bids, the Board will issue an Exploration Licence for each of the four parcels in November 2008. The Licences will be for a term of nine years, with an initial period of six years.

Bond Papers Note:  The CNLOPB release (available at the link above) included a map of the parcels.  Parcel 3 surrounds two existing significant discoveries (natural gas).