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Band, energy firm sign deal

Paul Bickford
Northern News Services

Hay River Reserve (May 02/05) - A search for a new source of oil and gas is about to begin on the Hay River Reserve and the traditional lands of the K'atlodeeche First Nation (KFN).

The band signed a memorandum of understanding in February with International Frontier Resources Corporation of Calgary.

"Basically, what we've agreed to is a 50/50 joint venture," says Chief Roy Fabian. "They would do all the exploration."

Preliminary exploration work is expected to begin this year, but actual drilling of any wells is three or four years away.

The company has agreed to explore and drill on the reserve up to the point of production, Fabian said.

"From there, the band would take over," he added.

It would remain a 50/50 arrangement until the band pays back the company's exploration expenses and then the band could consider buying the whole thing.

"In return, we would work with government to get licences to explore on our traditional lands," Fabian said, adding the band would use its "political clout" to help the company get those licences.

Any finds on the traditional lands would also be a 50/50 venture.

The traditional lands total about 3,300 sq. km, located south of the Hay River Reserve to the Alberta border and east of the Hay River to Wood Buffalo National Park. Fabian says the arrangement would also include about 30km of land west of the river, once an overlap agreement is reached with Kakisa.

All the exploration money would be supplied by the company.

Fabian is hopeful the arrangement will mean good things for the reserve.

"I just hope something really positive comes out of it," he said.

Fabian noted that exploration will mean an undetermined number of jobs for reserve residents and production would create some permanent jobs.

"If we were lucky and found something, there would be a pipeline and a couple of jobs available," he added.

The company has also agreed to establish three, $5,000 annual scholarships for reserve residents.

In addition, the KFN will receive 75,000 shares in the company.

Fabian said a company drilled a well in 1970 on what is now reserve land and hit gas. However, the company was looking for oil and abandoned the well, which also contained water.

International Frontier Resources Corporation currently has an exploration program in the central Mackenzie Valley.