Offshore staff

(Canada)-Recent announcements demonstrate the significant exploration activity underway in the Canada's Beaufort Sea, and the corresponding impact on the Mackenzie Valley Pipeline project.

The Paktoa C-60 well off the Mackenzie Delta, reported to be the first wildcat well in the Beaufort Sea in 17 years, reached its targeted depth of approximately 7,900 ft.

The well, drilled by Devon Energy Canada at a cost of approximately CAD$55 to CAD$60 million, is now being perforated to test the targeted formations, and is anticipated to finalize by the end of March. However, due to the fact that this well remains a tight hole, specific details and drilling results might not be released for up to two years, according to Devon Energy Canada VP Michel Scott.

Devon Energy Canada is required to meet a CAD$225 million work commitment and drill four wells by 2008-09, in order to retain four Beaufort Sea exploration licenses. These licenses will cover 860,000 acres that Devon acquired in the 2001 takeover of Anderson Exploration.

Devon Energy Canada is focusing its efforts on the Paktoa C-60 well for the time being, before exploring the other three wells over the course of the next three years.

Scott also reports that Devon Energy Canada is waiting for further progress with the Mackenzie Valley Pipeline project. To that end, the company is in negotiations with Imperial Oil with respect to gas-gathering, processing and transportation issues. Imperial Oil is the project leader of the Mackenzie Valley Pipeline Project.

It is anticipated that federal regulators with Canada's National Energy Board will decide on the Mackenzie Valley Pipeline application by 2007.

03/30/2006