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Chevron plans two wells

David Ryan
Northern News Services

Yellowknife (Nov 06/06) - Several oil and gas exploration companies are shuffling their Arctic land rights, but only Chevron Canada currently plans to drill in the Beaufort-Delta this winter.

Chevron, along with BP Canada, will drill two wells this winter if all goes according to plan.

NNSL Photo/graphic

This aerial view shows the Langley well Number 2 being drilled by Chevron in 2004. The company has been quite active in the Beaufort-Delta recently swapping land with Anadarko Canada. It also sold some of its other Northern holdings to Paramount Resources. - photo courtesy of Lorelei Piotto

One will be at the Northern end of Langley Island, while the other will be drilled near Camp Farrell, 100 km southwest of Tuktoyaktuk.

AkitaEqutak will be the on-site contractor.

"We'll be hiring directly from the AkitaEqutak office in Inuvik," said marketing North director John Pahl.

The company expects to hire 15 employees, all preferably from the North, for the 2006/07 winter program, he said.

Logistic planning for ice roads to the locations has already begun, with actual construction expected in late November or early December. Northwind Industries will build the winter ice road.

Chevron is also leading a massive land shuffle, trading holdings in the Gulf of Mexico for Anadarko Canada's exploration properties in the Mackenzie Delta, Beaufort Sea and Yukon.

After the two wells are completed this winter, Chevron would additionally turn around and unload a share in some of its own Arctic holdings to Paramount Resources, said Chevron's David Pommer.

Both deals are win-win situations for the companies involved, he said.

"The North American energy market still needs (Arctic) gas," he said.

"We want to become a significant player in the Canada frontier and this positions us very well to do that."

Paramount Resources will become the primary operator of a number of Chevron's operations in the Delta.

The properties encompass 412,500 hectares of land, said Paramount Resources chairman and chief executive officer Clay Riddell. In order for Paramount Resources to retain operator status and acquire a 50 per cent ownership of the properties, it must drill 11 wells and complete three-dimensional seismic work over a four-year period, said Riddell.

The deal allows Paramount to become a 50 per cent owner of a number of previously-made Chevron discoveries in the Mackenzie Delta, he said, adding it was a huge opportunity and the company, "jumped on it," said Riddell.

Financial terms of the transactions were not disclosed. Discussions are underway at Paramount to create a spin-off exploration venture focused on developing some of these new holdings as well as Paramount's existing Colville Lake discoveries in the Sahtu region, said Riddell. by David Ryan

Northern News Services