Yellowknife (Jun 26/06) - Officials at Devon Canada decided the firm won't be drilling offshore in the Beaufort Sea in the 2006-07 winter.

"We're pausing for the coming year," said Michel Scott, vice-president of government and public affairs. "It was largely due to equipment constraints."

Devon will take the 2006-07 drilling season off in the Beaufort-Delta due largely to the lack of equipment, including the SDC, the converted tanker used to drill the $60 million Paktoa C-60 well last year. - photo courtesy of Devon Canada

The SDC, the converted tanker the company used to drill the $60 million Paktoa C-60 well not far from Tuktoyaktuk last winter, will not be available.

While the company got encouraging results, he said it didn't strike the multi-trillion-cubic-foot resource it was aiming for with Paktoa.

Devon held four exploration claim blocks in the region and faced the prospect of losing all but one after deciding not to return next year.

"We worked out a deal with the federal government," he said, adding the company will only have to relinquish control of two of its blocks and $1 million.

The assets were acquired in 2001 when Devon bought Calgary-based Anderson Exploration for $7 billion.

Last year Paktoa C-60 became the first offshore well drilled in the Beaufort Sea in 15 years and the benefits for Northerners were huge.

Contractors on the project included Aurora Expediting, Canadian North, Aklak Air, Aklak Canadian Helicopters, Akita Equtak drilling, Inuvialuit Oilfield Services and caterer Arctic Oil and Gas Services.

Among the crew of about 85, a handful were said to be Northerners.

"We are still working with Devon on their demobilization," said Aurora Expediting's Stuart Russell.

The pull-out is planned for between Aug. 11 and Sept. 11, he said, adding there are other things going on in the region to keep many companies occupied.

"One guy leaves town and another arrives," he said explaining Shell USA has bought the Kulluk, another Canadian-made, Arctic-offshore drilling rig that was inactive for a number of years.

"Frontier Drilling is refurbishing the Kulluk and we're working on that with them and it's a lot of the same people involved who were working on the SDC."

Scott stressed Devon has not abandoned the Arctic and in fact the company recently increased its Northern exploration rights.

Together with 50-50 partner Talisman Energy, Devon picked up four exploration licences in the Sahtu earlier this year covering more than 340,000 hectares. The pair has pledged to spend almost $54 million on the properties in the coming years.

"We might see some seismic in the Sahtu, but it would be too soon to get any drilling going there this winter," he said, adding Talisman will be the operator on the four new properties.

Calls to Talisman Energy were not returned prior to press time.