Erika Sherk
Northern News Services
Monday, May 21, 2007

YELLOWKNIFE - Oil and gas interest in the Sahtu is heating up -- five oil and gas companies have been granted four exploration licenses encompassing a total of over 310,000 hectares of land in the region.

Indian and Northern Affairs Canada (INAC) announced the successful bids on May 11.

The biggest spender was MGM Energy Corp, a spin-off of Paramount, whose successful bid of more than $8.6 million gave the company rights on approximately 63,300 hectares of Crown land south of Fort Good Hope.

The license acquisition fills in a block of land the company was working to complete. Company president Henry Sykes said MGM already had exploration rights on chunks of land directly to the south and west of the new pieces.

The work plan is to conduct seismic surveys over the next couple of years and then drill a well before the first term on the lease expires in 2011, said Sykes.

The close proximity to the Norman Wells pipeline was an attractive factor, said Sykes.

"It would be a fairly short trip if we're fortunate enough to discover something," he said.

The move is part of the company's plan to grow "slowly and thoughtfully," said Sykes.

Another major acquisition in the Mackenzie Delta is to be closed at the end of May, he said.

So far, the young company's 11 employees are all in Calgary, but Sykes expects that to change as exploration plans progress.

"I'm certainly hopeful that an increase in activity will have some positive benefits for people who live in the area," he said.

Second of the big bidders was Husky Oil Operations Ltd., working as a partner with International Frontier Resources Corporation (IFRC).

Husky is operating as three-quarters partner, and IFRC as one-quarter. Together their successful bid was nearly $4.9 million for approximately 91,000 hectares of land south of Tulita.

BG International bid on about 75,000 hectares of land near Colville Lake with its $1.1 million work expenditure bid.

The company, working with IFRC as one-quarter partner, was also successful in its $1.1 million bid for more than 81,000 hectares of land near Fort Good Hope.

Danny McNeely, owner and operator of Sahtu Contractors in Norman Wells, said that the bids are good news for the area.

"I would say it's positive," he said, "because it shows industry is still interested in the area for exploration."