So believes the junior oil explorer that's snapped up virtually all of the land in the Green Point shale.
But Shoal Point Energy Ltd. (CNSX:SHP) hasn't quite figured out how to economically draw the crude — some 23 billion barrels of it in place, according to one estimate — from the uneven, broken-up rock.
"It's a bit of a wild frontier still," said George Langdon, the company's Newfoundland-raised CEO, who has long been fascinated by rocks on the Rock.
"There's a lot of oil in place. We haven't proven the viability of it yet. But just the sheer number of what could be in place there makes it, to me, one of the significant resources in North America, right up there with the big ones"
As in other shale formations throughout North America, tapping the Green Point will require hydraulic fracturing, or fracking, to unlock the resource. The controversial practice involves injecting a mixture of water, sand and chemicals underground in order to crack the rock.
Fracking has unleashed huge supplies of natural gas and oil from shales across the continent, but it also brings with it concerns over the safety of groundwater supplies near drilling sites.
Each shale region is different, so what works in the Pennsylvania Marcellus or the North Dakota Bakken might have to be tweaked to adapt to the Green Point's geologic quirks.
Indeed, it's hard to draw a direct comparison between the Green Point and other North American shales. For starters, it appears to be several times thicker and the rock has been jostled around by moving tectonic plates.
"The shale is really broken up quite a bit and when a shale is broken like that, it can be very difficult to drill," said Larry Boyd, director of geoscience at AJM Deloitte, the Calgary consulting firm that Shoal Point hired to evaluate its Green Point potential.
It's difficult, he said, "just to get a hole that will stay together and won't catch your tools and things like that."
"We're really kind of pioneering something really brand new here."
The Green Point also extends into the offshore. So far, the wells have been drilled from land. In the future, it may be possible to tap the shale from platforms or barges in the shallow waters of Port au Port Bay.
Shoal Point's activity so far has been at the south edge of the formation, which stretches north along the coast well past Gros Morne National Park.
The Toronto-based company, a small outfit with less than a dozen employees, is far and away the biggest landowner in the Green Point, having amassed more than 280,000 hectares across three blocks of land.
Shoal Point been going it alone and has drilled two wells so far. The first one was actually directed at a deeper oil target and happened upon the oil-soaked shale in the process.
The second was drilled last year into the Green Point shale itself, but successfully testing it has been slow-going. Shoal Point hopes that will happen next year, after which it aims to apply to the Canada Newfoundland and Labrador Offshore Petroleum Board for what's known as a significant discovery licence.
Shoal Point acknowledges it will take a player with much deeper pockets and technical expertise to fully develop its land and has been actively looking for a joint-venture partner to help.
Langdon — who travels frequently between Newfoundland, the financial centre of Toronto and the energy centre of Calgary — was recently out West to meet with possible partners and set up a data room for them to pore over company information.
"We think this play is big enough, has potential resources enough to attract the largest oil companies in the world," said Langdon, a geologist by trade.
"If this play was sitting in Texas or sitting in the western basin, there'd probably be people all over it, but that will happen in time. I think it's potentially a fantastic resource. It could be even of strategic importance —I think it's potentially that big."
In some regards, Green Point has an edge over other shale zones. For one, it's believed to contain high-quality light, sweet crude that sells at a premium price.
There is also a deepwater port at Stephenville, not far from Shoal Point's operations, from which the oil could be loaded onto tankers and shipped to any number of lucrative Atlantic markets.
By contrast, Alberta oilsands crude and other landlocked North American sources have been fetching discounted prices due to a dearth of pipelines to coastal waters.
Newfoundland is also no stranger to energy development, with oil currently flowing from the Hibernia, White Rose and Terra Nova developments off the island's eastern shore.
The area where Shoal Point would be drilling is sparsely populated and without much farmland. So as Langdon sees it, fracking is likely to stir less opposition than in areas like Pennsylvania, New York State or the Quebec lowlands.
The region has long suffered from high unemployment. In fact, scores of Newfoundlanders currently travel to western oilfields for work.
"We would like to see that maybe reversed a little bit," said Langdon.
"If something like this becomes viable, we've got decades and decades of potential employment and production."
Though Boyd describes Green Point as a "world class resource," he said "we're a long way off to really see that it will work."
"But it is kind of exciting. A lot of successful plays start out this way with really a lot of unknowns and you've got to go out and drill and keep on drilling until you figure out how it works."
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