Petroworth project at Lake Ainslie setback sets unusual tone

Project setback sets unusual tone by The News, November 12, 2012
While plans for an oil and gas test well near Lake Ainslie are by no means dead in the water, having a potential partner back out because of strong opposition to Petroworth Resources Inc.’s project certainly seems a game changer. Many people in addition to those living in the area were watching this situation closely, if only because of the huge attention oil exploration and hydraulic fracturing receive – across the Maritimes and elsewhere. An unidentified company stepped away from negotiations on the test drilling, it was revealed Monday, the perceived reason being unflagging protests from residents and the Mi’kmaq community. The Western Canadian company’s role was to finance the drilling in exchange for a percentage interest in the property. The development company describes the prospective partner’s decision as a setback. Petroworth says it is determined to pursue the project. The Margaree Environmental Association had focused earlier efforts on an attempt to quash the drilling permit, arguing that the activity was too close to a stream feeding the lake – the largest freshwater body in Cape Breton. That was denied. Spokesman Neal Livingston is calling this latest turn a huge victory for the group. Indeed, after the failure of an argument based on environmental concerns, a dropped link in the money train earns at least a setback. Funny how that works. But Livingston is also saying he hopes other potential financial partners will follow suit and back away. It is interesting that a company based on the other side of the country would be swayed by the strong vocalizations in Cape Breton. PR apparently travels great distances – or at least that’s the perception. This might prove no more than a temporary moral victory for the environmentalists. But it will also serve as impetus for groups elsewhere fighting oil exploration in what they deem sensitive areas. [Emphasis added]

Potential partner backs away from Cape Breton test well after protests by Melanie Patten, The Canadian Press, November 12, 2012
A company looking to drill an oil and gas test well near Cape Breton’s largest freshwater lake says it remains committed to the project despite the loss of a potential partner because of protests over the development. Neal Mednick, president of Petroworth Resources Inc., said Monday the unidentified company was days away from a possible deal when it stepped away from negotiations about three weeks ago. “One of the parties — the discussions were fairly advanced — decided to not proceed primarily based on, I guess, the rather vehement opposition,” Mednick said from his office in Toronto. Mednick said the Western Canadian company was in talks to be a farm-in partner, meaning it would pay for the cost of drilling the well near Lake Ainslie in exchange for a percentage interest in the property. “There are other interested parties and we’re hopeful we’ll get a deal done, but it’s an obvious setback,” said Mednick. “As discouraging as it is, we’re still determined to get the well drilled.”

Opponents who say they’re concerned about possible groundwater contamination from the project have staged protests and even taken their fight to the Nova Scotia Supreme Court. … Neal Livingston, a spokesman for Margaree Environmental Association, said Monday that news of a potential partner backing away from the project was a victory for his group. Livingston said he’s hopeful other potential partners will follow suit. “We’re just hoping that the company isn’t able to find any other investors because it’s not an appropriate place,” Livingston said from Cape Breton. “In some ways we’re thinking that maybe this is a win on this issue.” Protesters, including members of the Mi’kmaq Warrior Society, have held demonstrations recently near the Canso Causeway in an effort to draw attention to the project and their concerns. Mednick said he remains optimistic the drilling will be done before the permit expires, though he conceded there’s some concern that ongoing opposition to the project could have a negative impact on negotiations with other companies. He said western Cape Breton has already seen its share of oil drilling, with five or six wells drilled in the late 1800s near Lake Ainslie. The company has also said its proposed drill site sits atop a well that produced oil for export to the United States in 1875. “The well that we propose to drill is going to undergo tremendous scrutiny and supervision, and I can assure everyone that it will be drilled safely,” said Mednick. “I’m hoping that cooler heads and reason will prevail.”

Potential partner backs away from Cape Breton test well because of protests by Melanie Patten, 12 Nov 2012, The Canadian Press in The

Protests, opposition cost PetroWorth an investor by Chris Hayes, November 12, 2012, Cape Breton Post
LAKE AINSLIE — PetroWorth Resources has lost a potential investor for an oil well planned for the Lake Ainslie area because of protests and opposition to the project. Company president Neal Mednick said he has been discussing a farm-in investment with a number of oil and gas companies in which they would pay for the cost of drilling the oil well for an interest in the property. One of the potential investors withdrew because of all of the opposition to the project, he said. PetroWorth is talking to other potential farm-in investors and still expects to get a deal done, he said. The Toronto-based company has a permit that is good until July 15 to drill a 1,200-metre vertical well in an area on the western side of Lake Ainslie, just south of MacIsaac’s Point at an estimated cost of about $1.6 million. “We still plan to get it drilled within that time frame,” said Mednick. Mednick said he has promised there will be no hydraulic fracturing at the Lake Ainslie project in response to concerns that were expressed about that method but is frustrated that there is opposition to drilling of any kind.

Lake Ainslie area residents opposed to PetroWorth’s plans have been joined by the Margaree Environmental Association, which tried unsuccessfully to get the Nova Scotia Supreme Court to quash the company’s permit. First Nations communities in Cape Breton also organized protests at the Canso Causeway against oil and gas exploration in Cape Breton and especially the PetroWorth project. Neal Livingston of the environmental association said the court case did show the extent of opposition in the community to the oil well project and together with the protests, are getting the message out that it wouldn’t be a good investment.  “It’s too close to homes and it’s too close to water courses and it’s in a very inappropriate place,” he said “The company seems to have completely ignored and continues to ignore that point, that where they picked there is tremendous opposition to it.” Livingston said the opposition is to drilling an oil well, not just hydraulic fracturing. “No one has ever said it’s OK if you drill as long as you don’t frack. No that hasn’t been the fight here. The fight has been this is not a place the government ever should have issued a permit for.” Five or six oil wells were drilled in the Lake Ainslie area in the 1950s and 1870s that were closer to the water than his proposed project and without the same environmental protections and scrutiny, said Mednick. “Yet there still seems to be this blind opposition that is making life difficult.” [Emphasis added]

Potential partner backs away from Cape Breton test well because of protests by Melanie Patten, The Canadian Press, November 12, 2012, Winnipegfreepress

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