Stock Symbol: TSX: VUL
Shares issued: 28,510,884
ST. JOHN'S, NF, Oct. 28 /CNW/ - Vulcan Minerals Inc. ("the Company"
TSX-V: VUL), is pleased to provide the following update:
Hurricane No. 1
---------------
The surface casing has been cemented in the Hurricane No. 1 well at 245m
and is currently drilling ahead. The well is now 100% owned by the company as
the party that held rights to participate in the Hurricane program has decided
not to participate and has relinquished its rights. The Hurricane No. 1 well
is testing a portion of the large (potentially 100-km2) Hurricane structure.
Several wells will be required to adequately test the structure situated
approximately 15 kilometres south of Flat Bay.
Seismic Program
---------------
As part of its ongoing exploration of the Bay St. George Basin in Western
Newfoundland, the company has retained the services of Kinetex Inc. of Calgary
to acquire a minimum 50-line kilometre Vibroseis survey. This seismic survey
will be focused on the north and west portions of the Flat Bay Anticline. One
of its purposes is to image a potentially faulted and fractured portion of the
Flat Bay structure where significant intersections of oil-bearing formation
have been encountered, most recently with the Flat Bay No. 3 well. The seismic
data will assist in imaging the structural elements of the Flat Bay oil
deposit that would assist in evaluating any options for oil recovery. As well,
the survey will help delineate a new gas play tentatively identified on the
west side of the Flat Bay anticline. Preparatory fieldwork for the survey has
commenced and the survey is expected to be completed by late-November.
Magnetic Surveying
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The company is also negotiating an agreement to acquire approximately
4500-line kilometres of airborne high-resolution magnetic data over the
company's entire permit area in the Bay St. George Basin. With the growing
seismic database, the magnetic data will assist in defining the major
structural elements of the basin and provide geophysical control between
seismic lines. As well it will assist with imaging fracture geometry within
the Flat Bay oil deposit and ultimately the location of future drill sites.
Flat Bay Gas Potential
----------------------
Historic mining drilling for gypsum on the Flat Bay structure encountered
gas in a couple of wells as recorded in the data archives of the provincial
government of Newfoundland. In particular, hole 24N0E (1956) encountered a gas
blowout at 33 metres depth in fractured anhydrite. No flow rates were
recorded. This anhydrite sits above the Fischell's Brook conglomerate that
contains the oil deposit discovered by the company. An eyewitness account
indicated that the well blew out gas for several days and had to be capped.
Photographs of the gas flare will be posted on the company's homepage. The
exact location of the hole is believed to be 150 metres south of Flat Bay
No. 3 and probably represents a gas cap on the Flat Bay oil deposit. It
probably also marks the location of an east-west bounding fault that is the
southern boundary of the Flat Bay deposit. The new seismic and magnetic data
will focus on locating that fault and others in the area. The significance of
the gas occurrence will have to be evaluated by drilling. Any possible gas
production would likely be used for the generation of electricity. But first,
the company has to relocate the gas occurrence and evaluate its production
potential including whether it can be produced independent of any oil
production.
Coal Bed Methane
----------------
The company holds the petroleum rights over most of the area known as the
St. George's coalfields in Western Newfoundland. The coalfields cover an
approximate area of 200 square kilometres and are of Carboniferous age
believed to be equivalent to coals in Nova Scotia currently being assessed for
their coal bed methane potential. Multiple coal beds are known to exist based
on historic mineral exploration efforts. Some coal seams have been reported to
be up to seven metres thick though the thicker sections probably include
portions of coal shale. Coal bed methane occurs naturally in the fractures of
coal beds and can be produced commercially as demonstrated in Alberta and the
United States. Production from individual wells in Alberta can range from 50
to 400 thousand cubic feet of gas per day, making coal bed methane a growing
contributor to the energy supply. Some of the largest petroleum companies in
Canada are devoting increasing resources to the development of coal bed
methane in Western Canada. The company proposes to do a coal-bed methane
resource assessment of the St. Georges coalfields based on historical mineral
exploration data to determine whether it is justifiable to carry out a
drilling program.
Frontier Operator
-----------------
Vulcan is currently drilling its third well of 2005 and is the most
active explorer in Western Newfoundland. The Bay St. George basin is an
onshore under-explored area without petroleum production. Vulcan is one of the
few companies in the world exploring such a new frontier. Its aggressive
exploration program has confirmed the presence of an active petroleum system
and a shallow oil deposit at Flat Bay. The company is proud of its
accomplishments as a small explorer for generating the project, securing
financing, operating the project and most recently, owning and operating the
drilling equipment. This is a challenging task for a small company in a
frontier area with no immediate petroleum service infrastructure available.
Not withstanding that challenge, the company has been very successful in
methodically exploring the basin towards the ultimate objective of commercial
discovery and production. The company is planning the drilling of another well
after the current Hurricane No. 1 before year-end. A continued aggressive
exploration program is also planned for 2006.
The TSX Venture Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
%SEDAR: 00003997E
