PetroWorth Resources (PetroWorth) and Enbridge Gas New Brunswick (EGNB) have signed a letter of intent (LOI), which outlines specific terms and conditions that will form the basis of a definitive agreement to construct a 22km pipeline from PetroWorth's Rosevale Lease acreage to EGNB's natural gas distribution system that serves the city of Moncton and surrounding communities.
The pipeline will enable PetroWorth to transport natural gas from its existing E-08 and A-08 wells, pending a frac completion at A-08. Once the pipeline is operating, PetroWorth will tie in additional wells from locations within its Rosevale Lease.
The E-08 well was drilled by PetroWorth in November 2007 to a total depth of 1605mt. Four zones were frac stimulated in July 2008, resulting in a flow rate of nearly one million cubic feet of gas per day and 20 barrels of oil per day at the end of a continuous 120-hour flow test.
The A-08 well was drilled in June 2008 to a total depth of 1932mt. Petrophysical and geochemical analyses of the well indicate four zones should be frac stimulated, including a 500mt shale oil and gas zone. Based on these analyses, PetroWorth believes that properly designed and executed fracs of these four zones will generate a significant flow of both oil and natural gas.
The frac completion of A-08 is expected to be conducted this summer or fall, depending on the availability of equipment and crew. Construction of the pipeline to the EGNB distribution system will commence soon after the completion at A-08.
Neal Mednick, president of PetroWorth, said: “This agreement with Enbridge Gas New Brunswick is an important step towards establishing PetroWorth as an oil and gas producer in eastern Canada. The pipeline will generate considerable royalty revenues for the New Brunswick government. In addition, bringing Albert County gas to market will result in savings for homeowners and business operators throughout the province through the avoidance of tolls to the Maritimes & Northeast Pipeline.
“The recent interest in New Brunswick shown by a couple of major petroleum companies reinforces our belief that onshore eastern Canada is on the verge of becoming a new frontier for oil and gas exploration and development.”