2024 Call for Bids
The 2024 Call for Bids in the Eastern Newfoundland Region presents a prime opportunity for bidders to refine and advance their exploration and development strategies by utilizing multiclient seismic data. This year’s call offers 41 parcels, with 32 reintroduced from previous bids or leases that have reverted to the Crown. The remaining nine parcels have been newly crafted over Sector NL06-EN, reflecting stakeholder input from an earlier call for nominations.
Set for November 1st, 2024, this lease round continues a leasing tradition dating back to 1989. In 2012, TGS launched a new phase of multiclient seismic data acquisition offshore Newfoundland and Labrador, which has since spurred a significant increase in exploration activity in the region, as shown in Figure 1. Currently, two potentially high-impact wells are being drilled offshore Newfoundland: Exxon’s Persephone well in the northeastern Orphan Basin and Equinor’s Sitka C-02 in the Flemish Pass. These exploration efforts are expected to yield valuable insights into the prospectivity of Newfoundland and Labrador's offshore resources, providing explorers with the critical data needed to sharpen and enhance their exploration strategies.
Figure 1. Offshore Newfoundland & Labrador Call for Bids along with available TGS Seismic Data
Seismic Spend Incentive
Beyond optimizing exploration strategies, bidders have the opportunity to significantly offset the costs of seismic data acquisition through write-offs against the security deposit. The security deposit, which is 25% of the exploration work commitment due at block award, can be written off as follows:
Pre-term write-off: 75% of seismic costs.
Post-term write-off: Based on the number of wells drilled and the duration of the term period.
This seismic spend incentive not only reduces the financial burden on companies but also encourages the use of advanced data to make more informed decisions, potentially leading to more successful exploration outcomes.
For detailed information, refer to NOTICE TO POTENTIAL BIDDERS No. NL20-CFB01 (Eastern Newfoundland), Section 2, which addresses revisions regarding the refunding of security deposits. The document is available here: https://www.cnlopb.ca/wp-content/uploads/news/notetobid.pdf
The Benefits of Multiclient Seismic Data
A significant measure of the increased activity can be seen in the Exploration Licenses issued from 2012 to the present. Since TGS began acquiring multiclient seismic data offshore Newfoundland and Labrador, the average yearly work commitment has more than tripled. This increase highlights the growing value and reliance on seismic data for exploration activities. By leveraging this data, companies can make more precise decisions, leading to potentially higher returns on their investments. Moreover, the ability to offset seismic costs against security deposits makes this approach even more financially viable, effectively reducing the overall expenditure for bidders.
The data in Figure 2, sourced from the C-NLOPB database, illustrates the annual and cumulative work commitments, underscoring the trend of increasing exploration investment. For more detailed information, the database can be accessed here: https://www.cnlopb.ca/exploration/tables/
Figure 2. Sourced from C-NLOPB, illustrates work commitments annually & cumulatively
In summary, the 2024 Call for Bids in Eastern Newfoundland not only offers valuable exploration opportunities but also provides financial mechanisms to make these ventures more cost-effective, particularly through the strategic use of multiclient seismic data.
For more information on TGS’ offshore Newfoundland and Labrador and upcoming lease round information, please visit https://www.tgs.com/seismic/multi-client/north-america/canada or contact us at WDPSales@tgs.com.
