Petroleum Lease #2002-01 allows for production of hydrocarbons in an onshore area on the Port au Port Peninsula, West Newfoundland. Based on previous geological interpretation and 2D seismic survey of the area (combined with the experience of previous interest holders of the production lease), the Interest Holders consider that significant oil production opportunities exist at three locations within the lease area: Garden Hill North (GHN), Garden Hill Central (GHC) and Garden Hill South.
PDIP own the following interests in this area:
| Lease/License | PDIP Interest * | Area |
|---|---|---|
| PL#2002-01 | 100% (Operator) | 39,227 acres (158.75 km2) |
* - Assumes all amounts due to CIVC Creditor Corp. will be paid when due.
Onshore Petroleum Lease 2002-01 was issued in 2002 in order to license oil production activities. It is the first and only production lease ever granted by the Province of Newfoundland and Labrador. The lease was extended on June 28th 2006 for a period of 1 year subject to a commitment to:
- Re-enter, re-complete and re-test the Garden Hill South well in order to re-establish production. The minimum expenditure for the work programme was C$2.62 million. This programme was completed and the full commitment has been spent.
- Undertake a geophysical program over the Garden Hill North prospect, with minimum expenditure of C$2.5 million. Groundwork for the survey commenced in August 2007, including cutting of the seismic lines (which has been completed).
PDIP, as operator, re-entered the well and attempted to establish production, acquiring a 60% working interest in the process. However the well was shut-in because it was incapable of sustaining commercial rates. The lease has been renewed until August 12th 2008, subject to the following conditions:
- A drilling program of at least C$10m shall be commenced no later than August 12th 2008 (this program has commenced).
- A deposit of C$500,000 to be paid against the work program (this has been paid by PDIP).
The lease will be extended for the remainder of its initial term (to August 12th 2012) providing that, once drilling has been undertaken, production is maintained for a period totalling two years.
PDIP has subsequently acquired a 100% interest in this lease.
PL2002-01 contains a hydrocarbon discovery and two further prospects:
- Garden Hill South (Discovery).
- Garden Hill North (Lead).
- Garden Hill Central (Lead).
Areas of operation
Port au Port peninsular
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