Basin Hunters

Investing in Canada’s East Coast just got even hotter. Situated 500 kilometers northeast of St. John’s, Newfoundland, the Flemish Pass is shaping up to be the next big basin play in the East Coast history books. I heard one speaker talking about the oil and potential in the Flemish Pass, saying: “It’s one thing to get to work on an oil project; it’s a whole other thing, and a once-in-a-lifetime opportunity, to open up an entire frontier basin.” Yes, the Flemish Basin has been shaping major discoveries in recent months, and people are excited. Operated discoveries currently in the Flemish Pass include these three fields: Mizzen Field (100–200 million barrels of oil). Harpoon Field (currently under evaluation). Bay du Nord Field (300–600 million barrels of oil).

In the fall of 2013, Statoil Canada Exploration, the international Norwegian energy firm (65% owner), announced with its Calgary-based partner, Husky Energy (TSX:HSE) (35% owner), the discovery of their most recent field, the Bay du Nord.

“It’s not that often a company makes an oil discovery of this size,” said Geir Richardsen, vice president of Statoil Canada Exploration, in a previous interview. “For starters, it is the biggest oil discovery we’ve ever done outside the Norwegian [Continental] Shelf.”

Statoil and Husky are also responsible for the discovery of wells, Mizzen and Harpoon. The cumulative success of Bay du Nord, Harpoon, and Mizzen makes the Flemish Pass the hottest new play on the eastern seaboard.

The other item of interest is that the oil discovered by Statoil and Husky is light oil with an API gravity of 34. That’s important because lighter oil yields a higher percentage when sold and is, therefore, considered more valuable with higher returns.