NOVA SCOTIA CANADA: THE NEXT PLAY

Onshore exploration and development update

While offshore oil and gas exploration garners the majority of the province’s exploratory knowledge, onshore exploration is undergoing a renaissance. In fact, Nova Scotia’s energy potential portfolio is very promising in areas of conventional, coal-bed methane and shale gas exploration.

Underground gas storage and LNG regasification initiatives are also progressing.

The Department of Energy recently closed three competitive licensing rounds which illustrate the onshore momentum. Currently, there are six conventional agreements and three coal-bed methane agreements.

Forent Energy of Calgary is drilling in 2007, outside of Halifax, looking for a proven hydrocarbon system of natural gas on a 750,000 acre land position. The company is also continuing exploration on a field within the Shubenacadie Basin.

Stealth Ventures of Calgary expects a decision on its development plan for the production of coalbed methane gas in fall 2007. Stealth estimates the potential resource size at over one-trillion cubic feet. While early exploration work has been very encouraging, its commercial viability is still being evaluated.

Elmworth Energy, a subsidiary of Triangle Petroleum Corporation, is drilling in the recently acquired Windsor Basin Block, a 516,000 gross acre land position in the Windsor Basin.

The $8 million exploration program in the Windsor Basin block is the first shale gas initiative in which Elmworth is an operator. Triangle officials say company participation in several US shale programs and the acquiring of certain knowledge, experience, and contacts is being utilized in the exploration and development of its Eastern Canada shale gas projects.

Calgary-based Landis Energy Corporation continues its development plans for natural gas storage in salt caverns in Colchester County, Nova Scotia. An environmental assessment as well as regulatory and production permits are currently being reviewed by government regulators.

Geological and geotechnical analysis concluded that each of the four caverns planned for initial development could store between one billion and 1.5 billion cubic feet of gas.

Two LNG projects are currently in being developed in the Strait area of Nova Scotia, the same area where the Sable Offshore Energy Project (SOEP) is located.

Maple LNG, which in March 2006 was purchased by current owners, 4Gas with its partner Suntera Canada Ltd, is located at Goldboro, Nova Scotia. The Nova Scotia project will initially include three LNG storage tanks of 160,000 cubic metres capacity, providing a send-out capacity of 9 bcma. The development will be phased, starting at 9bcma and expanding to 18 bcma.

The Goldboro site will be able to receive LNG carriers of up to 250,000 cubic metres. Environmental permits are expected to be issued in 2007 and the scheduled start of operation is 2010.

Anadarko Petroleum Corp. is the current owner of the 72-hectare Bear Head LNG terminal project near Port Hawkesbury, Nova Scotia. The site is prepared and developed for future LNG opportunities.

Keltic Petrochemicals Inc. received conditional approval for the petrochemical/LNG project on the North Shore of Stormont Bay in Goldboro, Guysborough County, Nova Scotia. Keltic sold the LNG interest to MapleLNG in March 2006. Keltic hopes to have both federal and provincial approvals completed by year end 2007. The project is scheduled to begin construction in 2008.

Nova Scotia is not solely focused on petroleum-based energy. Green, renewable energy, including wind, tidal and wave energy is being explored as part of the province’s vibrant energy portfolio.

Nova Scotia Power’s Annapolis tidal power plant has been operating in the Bay of Fundy since 1984, only one of three commercial tidal operations worldwide.

And a recent study by an American research body, EPRI, identified the Bay of Fundy and its world-record tides as potentially the best site for tidal power generation in North America, with its resource in close proximity to an existing grid and potential customers.

Nova Scotia’s in-stream tidal demonstration facility is expected to be up and running by 2009, pending environmental approvals. This site will test three devices, likely in the range of one megawatt each.

Nova Scotia is also known for its winds, not surprisingly, given its location next to the Atlantic Ocean, on the edge of the continent. In the next six years, Nova Scotia is expected to add up to 500 megawatts of renewable energy, totaling upwards of $1 billion in new investment.

Nova Scotia’s wind resource also comes with its own maps. A wind atlas of the province is online at www.nswindatlas.ca. It identifies the best locations for wind development in Nova Scotia.