INUVIK - Among the companies that have lambasted the Joint Review Panel for the amount of time it took to conduct its assessment of the Mackenzie Gas Project, Calgary-based junior exploration company MGM Resources is the undisputed ringleader.

Henry Sykes, president, MGM Energy, says the uncertainty surrounding the pipeline is continuing to scare away investors. - photo courtesy of MGM Energy

And as industry, government and aboriginal organizations continue to await the National Energy Board's decision on the $16.2 billion pipeline, the company - an active player in the NWT's oil and gas industry, until this year - is hardly toning down its criticisms of the quasi-judicial panel, whose delays caused MGM to halt all field work last winter.

According to president Henry Sykes, the uncertainty surrounding the pipeline is continuing to scare away investors, who are so crucial to a small company like MGM being able to raise money to mount future drilling projects in the NWT.

"Investors are prepared to take certain risks because they understand them, and they understand, for example, commodity price risks. They understand drilling success risks. These are risks that you take everyday when you invest in oil and gas," he said.

"But what they don't understand are (regulatory hurdles), and especially a regulatory process that's been as long and, frankly, as embarrassing as this one has been. It just has been so bad that the message that's been sent is, 'You cannot rely on this process to come up with a result within any reasonable time frame or at all.'"

Sykes' sentiments were most recently echoed by the Fraser Institute, a Canadian public research organization. Last week it released a list of methods government should undertake to better facilitate oil and gas development in North America.

Among the recommendations for governments in general: "Streamline regulatory processes for obtaining energy pipeline construction permits."

At this point, all MGM wants is some indication the pipeline will move forward.

"Frankly, whether it's 2016 or 2018 I'm not sure is as important as there being some assurance that it will happen. I think, once that happens, you're going to start seeing people becoming much more interested. You'll start seeing work happen. People will become more interested in acquiring land."

Earlier this year, MGM purchased the rights to explore four parcels of land in the Mackenzie Delta - Beaufort Sea region and another in the Central Mackenzie Valley. The company has five years to conduct work on them before the licenses expire.

But it's too late to mount any drilling projects for the upcoming winter season, at least in the Delta. In 2009, MGM drilled three wells north of Inuvik, creating work for around 200 people.

When News/North interviewed Sykes, he, like others, was hoping for a ruling on the pipeline to emerge in September.

"At this point, even if we got some very favourable news from the NEB and the government in the September time frame, it's too late to get any regulatory applications in to do any work in the Delta this year. We would have had to file stuff back in April or May.

"You lose a whole winter. That's unfortunate, but that's the way it is right now."

As of last week, the company was still mulling a small-scale drill program south of Norman Wells.

"We've got a prospect there that we think may be oil, not gas, and if we discovered oil we could produce it into the Enbridge pipeline. There's a possibility, but I think it's probably 50-50 at best. If it's not this winter, then it's probably next winter."

Even if it goes ahead, the Norman Wells program will be a modest investment compared to previous years.

"One well in the Central (Mackenzie Valley) probably has gross costs somewhere between $8 million and $10 million versus the $20 million to $30 million you would spend on a well in the Delta."

Tough as the financial climate for oil and companies is right now, the going won't get any easier even if the NEB gives the pipeline the go-ahead in the weeks ahead, said Sykes, ever cautious.

"Let's not forget: the positive news from the regulatory process does not equal the decision on the part of Imperial and Conoco and Shell to build the pipeline."

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