Pancanadian Petroleum News

PanCanadian Petroleum Ltd., Canada's No. 2 oil company, could soon be on track to develop an East Coast offshore gas project to rival the huge Sable Island project, its chief executive said. PanCanadian, the oil and gas arm of conglomerate Canadian Pacific Ltd., plans to drill two appraisal wells this year near its recent Deep Panuke gas discoveries, made at the site of the exhausted Copan oil project off Nova Scotia. The wells will give the company the geological data it needs to decide whether to pursue more drilling or full development, PanCanadian CEO David Tuer said. Two recent wells drilled into the gas formation beneath the old oil reservoir tested at more than 50 million cubic feet a day each.

The U.S. Navy awarded the work package on its USS Whidbey Island to Norshipco, a member of the U.S. Marine Repair shipyard family. The contract, which calls for topside phased maintenance, fixed-price availability, states for work to commence on May 24 for a September 1 completion. The work package includes topside repairs, electrical and mechanical repairs, and ship alterations. Specific mechanical repairs entail main propulsion diesel engines, and ship alterations include the RAM Mk31 Mod and Ship's Self Defense System installations. Stratos has been awarded a contract to supply C-band satellite equipment and teleport services for PanCanadian Petroleum Limited's exploration drilling program offshore Nova Scotia.

Standard & Poor's placed its triple-'B'-corporate credit rating on CP Ships Holdings Inc. and its triple-'B'-minus corporate credit and senior unsecured debt ratings on Legacy Hotels Real Estate Investment Trust on CreditWatch with negative implications. The CreditWatch placements follows Canadian Pacific Ltd.'s announcement that it intends to split into five separate companies (see related press release). Under the proposal, PanCanadian Petroleum, Canadian Pacific Railway, CP Ships, and Fording would become publicly traded companies, each separately owned, operated, and capitalized. Canadian Pacific would then be left with its sole remaining holding of a 100% interest in CP Hotels, constituting the fifth separate company.

Canadian Pacific Ltd., one of Canada's biggest and oldest companies, said it would split into five publicly traded firms, a move aimed at shedding a conglomerate discount that had dogged its stock. Besides CP Rail, Canada's No. 2 railway, Canadian Pacific owns 86 percent of cash-rich PanCanadian Petroleum Ltd., the country's top oil and gas explorer and producer, as well as Fording Coal Ltd., CP Ships, a global shipping firm, and CP Hotels. Canadian Pacific, the C$18-billion ($12-billion) transport, energy and hotel concern best known for its national railway, which tied the vast country together in the 19th century, had long been viewed as ripe for breakup because the sum of its parts were seen to be worth more to investors than the whole.