Halifax-based Corridor Resources Inc. (TSX:CDH) says it has suspended exploratory work on the Old Harry project in the Gulf of St. Lawrence for the foreseeable future.
In a news release issued Monday, the company says it has completed a geotechnical analysis and has determined that it wouldn’t be “prudent” to continue with additional capital spending, and as a result is suspending all further technical work and expenditures.
The Old Harry site is located about 80 kilometres off the southwest tip of Newfoundland in an area that straddles the Newfoundland and Labrador-Quebec border, and has been previously thought to hold significant oil and gas reserves.
But Corridor says its analysis has determined more complexity than previously suggested.
The company says it now believes the prospect could be more “gas prone than oil prone” and the overall quantities could be less than originally estimated.
Corridor says it has determined that a three-dimensional seismic survey should be conducted before an exploration well is drilled, and adds that it has been unable to attract a joint venture partner.
“As a result of the foregoing, Corridor has determined there is no longer a viable path to drilling an exploration well on the prospect before the current exploration licence on the Newfoundland side expires in January 2021,” the news release states.
“Corridor has not received interest in the Old Harry prospect from many international companies. In our view, this was due to a higher cost environment related to uncompetitive taxes and an increasingly cumbersome and unpredictable regulatory approval process in Canada.”
In past years the exploration work has been the subject of protests by environmental groups opposed to potential drilling in the Gulf of St. Lawrence.
The Save Our Seas and Shores Coalition and other environmental and First Nation groups have called for a moratorium to prevent offshore oil drilling over concerns of the potential effects a spill would have on the area’s sensitive ecology.
The company still holds exploration licences with both the Newfoundland and Labrador and Quebec governments.