Nalcor officials upbeat about early results of seabed search for oil

A full analysis has not yet been completed, but officials with NalcorEnergy Oil and Gas are already expressing confidence about the results of a recent study that collected seabed samples from areas thought to contain potential discoveries.

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It's just the latest in a series of work being carried out by the Crown corporation in an effort to provide as much information as possible to oil and gas companies who are considering bids on exploration rightsin 2016 and beyond.

"I'm thinking now, with the comfort that we had from the completed survey, the information that we've seen along the way, that this is going to be a positiveresultfor the 2016 licence round," said Jim Keating.

Targeting 'frontier basins'

Nalcor recently partnered with two companies to complete a seabed coring program in three so-called "areas of interest" in what's described as frontier basins.

The intent is to kickstartindustry exploration in new areas.

As part of this program, the companies used a ship called the Neptune to collect more than 100 samples from the seabed, which are now being analyzedto determine the presence of naturally occurring hydrocarbons.

The samples were taken from areas already thought to have potential because of previous satellite surveys that found oil seeping tothe surface, and follow-upseismic testing.

Keating described the process as multi-layered testing designed to decrease the uncertainty about the presence of oil, and ultimately lead to the purchase of exploration rights, and drilling activity.

A full report on the areas available in the 2016 licensing round is expected by the end of the year, but Keatingis not hiding his confidence in the outcome.

"I just don't want to steal the thunder from the study as it comes out." he said.

2015 bidresults coming soon

Keating said it's the next best thing to actually drilling a well, which can cost several hundred million dollars.

"It really is the story of using space satellite technology, and bringing it all the way down to the seabed," Keating explained.

Samples were collected over a three-week period in September.

Meanwhile, Keating noted that bid results for the 2015 licensing round will be known in the coming days.

He said such studies were not necessary for this year's round because all 11 parcels are in the Flemish Pass, surrounding previous discoveries such as Bay du Nord.

"Our job is to increasethe knowledgeand confidence that we have in those upcominglicence roundto the samelevel of confidencethat we have in the 2015 licenceround," he said.

As for costs, Nalcorbudgetedjust under $26 million forexploration work in offshore Newfoundland and Labrador in 2015, which includes the seabed coring programand other geoscience studies and programs.