Executive Council
Natural Resources
August 24, 2016

Oil and Gas Exploration Strategy Based on Data and Knowledge

Premier Announces 2016 Independent Oil and Gas Resource Assessment

Today, the Honourable Dwight Ball, Premier of Newfoundland and Labrador, and the Honourable Siobhan Coady, Minister of Natural Resources, announced that Newfoundland and Labrador's 2016 independent resource assessment covering the area of the West Orphan Basin has identified 25.5 billion barrels of oil and 20.6 trillion cubic feet of gas potential.

"The 2016 independent oil and gas resource assessment adds to our growing knowledge about our offshore oil and gas potential - leading to more exploration work by global companies and giving us assurance that we will have a thriving oil and gas industry in Newfoundland and Labrador for many years to come. We do recognize that exploration is down globally due to current challenges in the oil and gas industry. Still, we are cautiously optimistic about positive results of the licensing round in November 2016. We are fully expecting more exploration work by the leading oil and gas companies in the world."
- The Honourable Dwight Ball, Premier of Newfoundland and Labrador

The 2016 independent oil and gas resource assessment is based on new data covering nine parcels on offer in the West Orphan Basin within the area of the Canada-Newfoundland and Labrador Offshore Petroleum Board's 2016 Eastern Newfoundland Region Call for Bids which closes in November 2016.

"Prospectivity - data and knowledge - is fundamental to our oil and gas exploration strategy. We now have contemporary, high quality data on our offshore prospects which is attracting global attention, including the 2016 independent oil and gas resource assessment on the West Orphan Basin conducted by Beicip-Franlab. Through new seismic work to date, we have defined over 20 basins, significant new basin areas, and over 350 leads and prospects - over 50 of which are in the West Orphan Basin."
- The Honourable Siobhan Coady, Minister of Natural Resources

Nalcor, with its partners TGS and PGS, have been acquiring extensive 2D seismic data (110,000 line km to date) in the underexplored slope and deep water areas of the province's offshore. To further delineate the West Orphan Basin, a 3D seismic survey was acquired over a portion of the area and the data from the new 3D images has provided further insight into the area's resource potential.

"The 3D seismic survey has added an additional layer of insight which has been critical for this frontier area and it's played an essential role in helping us understand the basin's resource potential. Each step of the process has reduced risk. Some of the key prospects in this area have been risk reduced from a one in 20 to a globally competitive one in six chance of success."
-Jim Keating, Executive Vice President, Corporate Services and Offshore Development, Nalcor Energy

The independent assessment was conducted by Beicip-Franlab, headquartered in Paris, France. It covers approximately two per cent or 20,000 square kilometres of Newfoundland and Labrador's offshore area encompassing over 1.5 million square kilometres.

"The independent integrated geological and geophysical study carried out by Beicip-Franlab, supported by the application of leading edge modeling techniques, has been instrumental in identifying and quantifying significant prospective oil and gas resources in the West Orphan Basin. Our analysis and modeling of the 2016 area indicates favorable geological conditions for oil and gas accumulations."
- Jean Burrus, CEO, Beicip-Franlab

The size of the West Orphan Basin exceeds the entire Jeanne d'Arc Basin; and some of the prospects in this region are over 500 square kilometres in area - which is bigger than the Hibernia field at approximately 150 square kilometres. The scale of these prospects is global in magnitude and among the largest undrilled prospects in the world.

QUICK FACTS

• Newfoundland and Labrador's 2016 independent resource assessment - conducted by Beicip-Franlab - covers the area of the West Orphan Basin and has identified 25.5 billion barrels of oil and 20.6 trillion cubic feet of gas potential.
• The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) issued two Calls for Bids in the Eastern Newfoundland and Jeanne d'Arc Regions in April of this year. The 2016 Bid Round will close on November 9, 2016.
• This is the first time a 3D survey has been conducted offshore Newfoundland and Labrador in advance of a scheduled licensing round. The survey covered 4,600 square kilometers of the West Orphan Basin during the summer of 2015.
• Recent exploration activity has resulted in the identification of a new Lower Tertiary play trend in the West Orphan Basin. The play trend is approximately 300 kilometres off the coast of Newfoundland within the 200 mile limit.
• The size of the West Orphan Basin exceeds the entire Jeanne d'Arc Basin; and some of the prospects in this region are over 500 square kilometres in area - which is bigger than the Hibernia field at approximately 150 square kilometres.

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Media contacts:

Michelle Cannizzaro Media Relations Manager Office of the Premier 709-729-3960 michellecannizzaro@gov.nl.ca

Diana Quinton Director of Communications Department of Natural Resources 709-729-5282, 631-8155 dianaquinton@gov.nl.ca

2016 08 24                              2:10 p.m.