Offshore Oil Exploration Projects - Current Activity

EnCana is progressing with development of Deep Panuke Deep Panuke and first production is expected in 2010.

The Sable Project has added compression to its offshore platforms and is pumping more than 450 mmcf each day into the Maritimes and Northeast Pipeline, most of it heading to the northeastern United States.

In July 2009, the Canada-Nova Scotia Offshore Petroleum Board, Nova Scotia's offshore regulator, announced BEPCo Canada Company as the successful bidder for two deep water parcels offshore Nova Scotia. BEPCo won rights to explore both parcels located about 160 kilometres southwest of Sable Island, with a work-expenditure bid of $6.3 million each. The combined potential resource in the two parcels is estimated between 3.3 to 10 trillion cubic feet of natural gas in place.

The board continues a new policy that offers companies more flexible, lower entry cost exploration licences that reward early activity and encourage a broader range of companies to explore and invest.

The Deep Panuke offshore gas project, which includes a second pipeline to landfall, will be under development in the Sable Sub-basin area.

Nova Scotia has a plan to encourage more exploration, with new geoscience, policy, regulation and marketing. For more information please read the Nova Scotia Offshore Renewal Plan.

Exploration Activity

The Alma 4 production well is currently being drilled offshore.

BEPCo Canada Co. is preparing to drill a deepwater well about 200 kilometres south of Halifax.

BEPCo is partnering with Norstar Asia Ltd., a South Korean investment company. BEPCo is now trying to secure an available rig to begin work on the Mon Cherie well.

Deep Panuke Update

In October of 2007, the Canada-Nova Scotia Offshore Petroleum Board approved, with conditions, EnCana Corporation's Deep Panuke offshore gas project.

EnCana's Board of Directors has sanctioned the development of the company's Deep Panuke natural gas project located about 175 kilometres offshore of Nova Scotia.

The $760 million project is expected to start production in 2010 and deliver between 200 million and 300 million cubic feet of natural gas per day for further transport to market via the Maritimes & Northeast Pipeline.

Sable Offshore Energy Project

Based on July 2009 numbers, the Sable Offshore Energy Project (SOEP) production is averaging around 346 Mmcf/d production.

ExxonMobil installed a compression deck on the Thebaud platform which will push the gas to shore, lower the pressure at all platforms, and mean longer production from the fields. This unit is expected to boost output by 25% and significantly increase overall project deliverability until 2016.

Royalties Update

Royalty forecasts are sensitive to volatile and unpredictable gas prices and to estimates of recoverable hydrocarbons.

Royalty forecasts are updated quarterly as new information arises or as circumstances warrant.

The Province expects to receive between $2.5 billion and $3 billion in royalties over the life of the Sable project.