A deepwater oilfield off the coast of eastern Canada could hold 25.5 billion barrels (Bbbl) of crude, according to a new seismic report by the Newfoundland and Labrador government, potentially making it the country's largest offshore resource.

But the West Orphan Basin, 300 kilometers (186 miles) northeast of Newfoundland, may still struggle to attract exploration bids in a November land sale due to persistently low crude prices.

Paul Barnes, Atlantic Canada and Arctic manager with the Canadian Association of Petroleum Producers, said while publicly available seismic data was useful, companies needed to drill to prove the potential of a basin and there were a limited number able to spend $200 million-$250 million per deepwater exploration well.

"In order to undertake that type of activity you have to be a very financially well-off company or multinational and have a degree of confidence there's potential there to find something," Barnes said. "With the downturn in oil prices and less cash to invest, whether this basin will see any activity in that land sale is hard to predict."

Provincial government-owned Nalcor Energy used seismic data, assessed by independent oil and gas consultancy Beicip-Franlab, to study a 20,000 square-kilometer (7,722 square-mile) area.

The report, released on Aug. 25, found the basin could potentially hold 20.6 trillion cubic feet of natural gas in addition to the unrisked oil reserves. Unrisked means it is unclear how much of the reserve will eventually be recovered, but Jim Keating, an executive with Nalcor Energy, said recovery factors typically range between 25% and 75%.

The nearby Flemish Pass Basin is estimated to hold 12 Bbbl of potential unrisked reserves. Norway's Statoil ASA (NYSE: STO) announced a 300 MMbbl to 600 MMbbl discovery there in 2013, and the basin attracted CA$1.2 billion in exploration commitments in a 2015 licensing round.

The bidding on licenses in the West Orphan Basin will close on Nov. 9. Nalcor's Keating said interest was high so far, and provincial premier Dwight Ball said in a news release he was "cautiously optimistic" about positive results.

Oil and gas companies already active in the Atlantic Canada region were lukewarm when asked about potentially exploring the West Orphan Basin, where no drilling has been done so far.

Statoil said it had no firm plans at this time to undertake additional exploration drilling activities, while Royal Dutch Shell Plc (NYSE: RDS.A) said its focus was on its exploration program offshore Nova Scotia.

Offshore