PETRO-CANADA TO DRILL TWO TERRA NOVA TEST WELLS

  Petro-Canada, Canada's
  state-owned oil company, said it will drill two delineation
  wells this summer at the Terra Nova oil field offshore
  Newfoundland.
      Evaluation of test results and preliminary engineering work
  should put Petro-Canada in a position to propose a development
  plan for the Terra Nova field in 1988, the company said.
      Depending on time required for regulatory approvals,
  construction could begin in 1989, with first oil production as
  early as 1991, Petro-Canada said.
      "We have a high degree of confidence that the western
  portion of the (Terra Nova) field contains at least 11 mln
  cubic meters of recoverable oil, or more than 70 mln barrels,
  and that we could produce it economicly using a floating
  production system," Petro-Canada said.
      The Terra-Nova field, lying 350 kilometers east of St.
  John's and 35 kilometers southeast of Hibernia field, was
  discovered by Petro-Canada in 1984.
      "We've had encouraging results from the eastern portion of
  the field, and we hope this summer's drilling will prove up
  additional reserves there," the company said.
      Petro-Canada believes Terra Nova field is a good commercial
  prospect and the company wants to move some of those resources
  towards development so it can start generating a return on
  investments, Petro-Canada said.
      Petro-Canada, which will act as operator of the two wells,
  has a 75 pct interest in the western portion of Graven block of
  the Terra Nova field and a 26 pct interest in the field's East
  Flank block, a company spokesman said later. Other field
  participants include Canterra Energy Ltd, Mobil Oil Canada Ltd,
  Gulf Canada Resources Inc, ICG Resources Ltd, Trillium
  Exploration Corp and general partnership PAREX.
      Petro-Canada estimates reserves in the Terra Nova field's
  Graven block of between 68 mln and 70 mln barrels of oil,
  company spokesman Bob Foulkes said from Petro-Canada's Calgary
  office.
      Combined reserves for Graven Block and the field's East
  Flank block are estimated between 70 mln and 130 mln barrels,
  he added.
      Petro-Canada expects to spend about 500 mln Canadian dlrs
  to bring the field to production by about 1991, and the
  development budget could double if the company builds a
  production system combining both blocks in the field, he said.
      Petro-Canada estimates the Terra Nova field Graven block
  would produce between 25,000 and 26,000 barrels average daily
  production, with a production system that would have maximum
  capacity of 40,000 bpd, company spokesman Foulkes said in
  answer to a query.
      The company estimates a production system combining both
  Graven and East Flank blocks in the Terra Nova field could
  produce about 45,000 bpd average daily production, he said.
  

