The western offshore region of Newfoundland has had its share of hope and disappointment over the years.

While that region has a lineage of exploration that includes names like Hunt Oil Company, PanCanadian Energy Corporation, Talisman Energy Inc. and Mobil Oil Corporation, it hasn't yet struck the riches of the Jeanne d'Arc Basin on the opposite side of the province in the deep waters of the Atlantic.

According to the Newfoundland government, eight offshore exploration parcels totaling 1.08 million hectares are currently under license in the Gulf of St. Lawrence region. The area is experiencing renewed interest of late, boosted by several juniors muscling in on the exploration action as commodity prices have boomed while large, new oil and gas discoveries become increasingly difficult to find worldwide.

One of the companies examining the area with confidence is NWest Energy Inc. The company recently signed a contract with Calgary-based Geophysical Service Inc. for the acquisition of three-dimensional seismic data over roughly 900 square kilometres off western Newfoundland. The data is to be collected over a six-to-eight week period in the third quarter of 2008.

NWest has identified 11 highgraded targets within the exploration licence area. Targets were identified through detailed analysis of existing two-dimensional seismic data and other geological data. Following a successful three-dimensional seismic program NWest plans to drill its first well in 2009.

François Gauthier, president and chief executive officer is optimistic about the potential in an area that has for the most part been "hopscotched and overlooked."

"Our focus is to really be active in the land of giants, if you like...initially here in western Newfoundland," he said. "We've got aspirations for other areas but we'll see how the whole thing evolves."

Gauthier, a geologist by trade, spent several decades working overseas, including a stint with Anadarko Petroleum Corporation where he served as a resident manager in Algeria.

"We're focused more on the high-impact, high-potential (but) higher risk - no question - plays," he said. "I think the risk here is very modest by international standards. The interesting thing is we're exploring in an area that has been overlooked. The play trend has been very successful throughout North America."

NWest's property is in the same play trend as the Knox and Beekmantown producing areas of the United States and on trend with proven Labrador gas discoveries.

George Langdon, president of privately-held Shoal Point Energy Ltd. also holds great optimism for the western offshore. Shoal Point as operator, with partners, is currently drilling an onshore to offshore target from Shoal Point into the offshore.

The companies are employing the large triple Nabors Industries Inc. 45 rig to drill the well.

"Our block technically speaking is an offshore block," he said. "We're able to drill it from shore because it's very close. We're using the point of land as a drilling platform, if you will. If you use a jackup rig it would cost $30 million and we're drilling for $15 million."

The company has reached the intermediate casing point at 2 865 metres and expects to drill out in the next few days.

The planned logging run is expected to gather additional information on the Green Point section between approximately 1 060 and 1 700 drilled metres which, according to Shoal Point, has "significant" shows of natural gas.

"We've shown that our mapping is correct, we've hit the top of the platform sequence and are setting our intermediate casing before drilling further into the prospective footwall play area. It shows that we're actually in the right place," Langdon said, noting and that much of the technical and mechanical risk is now in the rear view mirror.

Michael Enachescu, a frontier exploration advisor and adjunct professor at Memorial University was careful not to describe the western offshore play as "heating up" but instead is cautiously optimistic something will bear fruit at some point.

"In the mid-90s there was a big drive and they had a big discovery in 1995," he noted in an interview.

Several large seismic programs in the 1970s and early 1980s operated by companies including Mobil, Chevron Corporation, Shell Canada Ltd. and Petro-Canada culminated with the drilling of 10 offshore wells, one of which - the East Point E-49 drilled in 1970 - flow tested at five mmcf of natural gas per day and is estimated to contain in-place gas reserves of 77 bcf in Carboniferous sandstone. This early exploration cycle ended with the oil price collapse of 1982.

Since then, several large leads and prospects have been defined in the Maritime border area stretching between Nova Scotia, Prince Edward Island, Newfoundland and Quebec. During the 1990s a number of large companies including (Norcen Energy Resources Ltd., BHP, Mobil, Hunt, Talisman and PanCanadian), along with several local juniors explored for petroleum in the onshore and offshore Paleozoic basins of western Newfoundland.

This exploration cycle resulted in several near-shore and shallow water marine seismic programs extending from the southern portion of Bay St. George to Hawkes Bay in the north. In 1994/1995 Hunt and PanCanadian drilled the Port au Port #1.

The well encountered several reservoirs, one of which was hydrocarbon bearing. An extended test over one of the zones flowed a total of 5,012 bbls of oil and 9.2 mmcf of gas over a nine-day period but the flow diminished with time.

"There are a number of possible explanations why flow rates dropped off at the time of the initial tests," a report by Enachescu noted. "Follow-up work by (Canadian Imperial Venture Corp.) who farmed-into the project demonstrated that the reservoir around the well bore was probably an isolated porous zone within a larger trend."

For the companies in the offshore western region today, Enachescu said the focus should be on analyzing wells, collecting seismic data and interpreting maps.

"If one is successful then this area will heat up because everybody is looking for new areas to explore," he said, noting the region is mere kilometres from the large, energy-hungry markets of central Canada and the northeastern United States.

"Obviously they (companies) need some intermediate and major operators to come back," said Enachescu. "That may happen only if these people have a discovery. That will make everything very attractive."

Finding a partner is integral to future plans, added NWest's Gauthier, although he didn't specify which companies he's targeting. He's also speaking with drilling contractors and service providers on availability and costs.

Gauthier noted that the harsh environments and ultra-deep waters aren't impediments here with conventional water depths of 80 to 200 metres, virtually in protected waters and conventional drilling depths of around 3 000 to 3 500 metres.

Also, the political climate in Newfoundland is stable when compared to jurisdictions many of the large international companies are exploring in and it doesn't require the "latest and greatest" technology. Another obvious plus is high oil prices, although he said the project doesn't need $100 oil to be successful.

"It would do very well at $50 per bbl," Gauthier said. "Especially if the field size that we're anticipating pans out."