Anticosti
Summary

PORTRAIT OF THE ISLAND

Located in the Gulf of St. Lawrence, Anticosti Island covers an area of around 7,900 km². It is 225 km long and 55 km across at its widest point, i.e., about the same dimensions as the St. Lawrence Valley between Québec and Montréal. The island is largely forested, although its forests have been transformed by the introduction of non-native species like white-tailed deer.

The island has around 217 permanent residents concentrated in Port-Menier (www.ile-anticosti.com). The main economic activities are tourism-related, mainly whitetail deer hunting, fishing, and vacationing.

A number of analyses have shown that the Macasty shale is the lateral equivalent of the Utica shale found in Ohio. Our objective is to develop the hydrocarbons in the Macasty Formation source rock to demonstrate their commercial viability.

We carry out our operations in a respectful and safe manner for the community, in compliance with the highest industry standards. All our work is planned to maximize economic spinoffs for the Anticosti Island community.

The agreement

In 2011, Sproule Associates Limited established a best estimate (P50) of 33.9 billion barrels of oil equivalent in undiscovered resources initially-in-place for the licenses held. Sproule's assessment was for the 38 licenses held by Anticosti Hydrocarbons, and based on analysis of several wells, including Pétrolia-Corridor-Chaloupe 1, LGCP, LGPL, ARCO and Sandtop.

The primary aim of the March 31, 2014 agreement between the four partners is to conduct up to $100 million in exploration work in two phases. To finance the work, Ressources Québec will invest up to $56.7 million and Saint-Aubin E&P up to $43.3 million. Pétrolia Anticosti, a subsidiary of Pétrolia, has been appointed contract operator and Saint-Aubin E&P assistant technical operator.

For the first phase, we will drill 12 coreholes between 2014 and 2015, followed by 3 fracking test wells in 2017. This initial phase is budgeted at between $55 and $60 million. The stratigraphic survey campaign will allow us to complete our knowledge of the characteristics of the Macasty formation and determine the best locations for the oil drilling planned for 2017.

Assuming that results are positive, a decision to start the production or not will be taken by the board of director. If additional works are required, the first $40-45 million will be paid by Ressources Québec and Saint-Aubin E&P.