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Paramount plans to drill five new wells in the Cameron Hills and cover about 15-square-kilometres with three-dimensional seismic surveying this winter. The company holds both oil and gas on its project but has to deal with the two petroleum types differently. Natural gas is piped to an Alberta-based processing plant called Bistcho. Tying in oil wells is a different story though.
"We need modifications at the Bistcho gas plant," said Paramount spokesperson Shirley Maaskant. It's expensive work that the company will have to do if it wants to get the oil to market.
Many Hay River and Northern-based contractors waited months to be paid for last year's work. The reasons were three-fold.
"Certainly affected by the Summit acquisition, the creation of the trust company and cash flow," said Paramount spokesperson Shirley Maaskant. Paramount's stack of invoices piled up, overdue after the Calgary-based company bought out another Canadian oil and gas producer, Summit Resources last summer. The takeover increased Paramount's size but left it cash-strapped.
Last year Rowe's Construction was Paramount's primary contractor at Cameron Hills but this year Carter Industries, also of Hay River received the contract.
Paramount bought Summit for $332 million, a cash consideration of $7.40 a share. Coinciding with the takeover, it also decided to split into two companies, changing its tax situation by restructuring. It is still in the process of forming a new royalty trust company that will pay dividends to investors.
Paramount Resources is busy in three regions of the NWT -- Cameron Hills and Fort Liard in the Deh Cho Region and Colville Lake in the Sahtu.
The new trust company, expected to be listed on the Toronto Stock Exchange by month's end, will not include the NWT properties.
Paramount's Cameron Hills' properties started producing early last spring. The project is located about 75 kilometres equidistant between Kakisa and Hay River near the NWT-Alberta border.
Its permitting obligations require it to give Northerners first crack at Cameron Hills work contracts and the company is bound by impact benefit agreements with potentially affected communities. Meeting the requirements adds one more challenge.
"We have been consulting with Kakisa, Enterprise, Hay River, Hay River Reserve (Katlodeeche First Nations), West Point as well as Fort Providence First Nations and Metis," said Maaskant.
But Kakisa's Chief Lloyd Chicot is frustrated with the benefits process and outstanding traditional land issues.
"We have been trying to get an agreement with the other communities to work alongside Paramount," he said. Kakisa's legal council recently sent threatening correspondence to Paramount regarding improved impact benefits but Chicot maintained there will be no lawsuit. "The community is not happy with what is happening over there."
