Colleagues,

I thought the following, which arrived overnight, might be of interest

Best wishes - Charles

Charles Gurdon
Menas Associates

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End of East Coast Canada boundary dispute

A 38-year boundary dispute off
Canada's East Coast is ended, opening a
path to exploration of an area the Nova Sco-tia
government believes holds the reserve
potential of three Sable natural gas fields
and two Hibernia oilfields.

Newfoundland appeared at first glance to
collect most of the spoils in a federal tribunal
ruling Apr 2, but Nova Scotia laid claim to
the vast bulk of current exploration licenses
in the Laurentian sub-basin.

However, the two premiers, New-foundland's
Roger Grimes and Nova Scotia's
John Hamm, agreed the matter is settled
and will not face further litigation.

Under the arbitration verdict, 75% of the
3,000-square-mile Laurentian sub-basin goes
to Newfoundland, 16% to Nova Scotia and
9% was already held by the French-owned islands
of St. Pierre and Miquelon.

However, Gordon Balser, the cabinet
minister responsible for Nova Scotia's Petroleum
Directorate, told a news conference
in Halifax the bulk of exploration commitments
to explore are within the territory
awarded to his province, although he said
both governments have good prospects.
No drilling has yet occurred in the Canadian
portion, but the Nova Scotia government
has used Geological Survey of Canada
data to project "resources" of 8-9 Tcf of gas
and 600- to 700-mil bbl of oil.

The most immediate loss to Nova Scotia
is an estimated C$13-mil ($8.2-mil) of exploration
leases, awarded by the Can-ada-
Nova Scotia Offshore Petroleum Board
and valued at C$1.5-bil ($945-mil).
"Now is a time to move forward, not a
time to look back," said Balser. "Our provinces
share common interests in the devel-
opment of oil and gas reserves."
Nova Scotia had made a case to the tribunal
that would have given it almost complete
ownership of the sub-basin, triggering a
long period of bitterness between the two
provinces.

Grimes told a news conference in St.
John's his province prevailed in its legal ar-guments,
but he rated the settlement as more
important to the economic future of both
provinces than a victory to Newfoundland.
In the immediate industry response,
Conoco Canada president Henry Sykes said
in a statement his company, which inherited
three blocks covering 8.6-mil acres that
were part of last year's takeover of Gulf Can-ada
Resources, will now open discussions
with partners on exploration options.
He said since the leases are so close to
North American markets, Conoco would be
happy to find either oil or gas and suggested
the potential could "rank quite highly" in
Conoco's global asset mix.

Three years ago, Gulf Canada entered
into a farmout agreement on its
800,000-acre exploration permit in French
waters with Mobil Oil Canada.
In return for Mobil paying the full costs
of a seismic program plus sharing the costs
of an exploration well with Murphy Oil,
Gulf Canada gave up 65% of its interest.
Gulf Canada reported last May the
Bandol No. 1 well came up dry and was being
abandoned, with data from the drilling
being analyzed to determine the next step.
Sykes not did set any timetable for explo-ration
in Canadian waters, but said his company
has been waiting a long time for the
chance to explore the licenses