NOTICE OF EXPEDITED INTERIM HEARING
APPLICATIONS NO. 1095525, 1095526, 1095602 AND 1275288
APPROVAL TO PRODUCE GAS
HARDY FIELD
STYLUS EXPLORATION INC.
NATURE OF THE APPLICATIONS
Stylus Exploration Inc. (Stylus) has applied to produce gas from certain perforated intervals within the Wabiskaw Member of the Clearwater Formation and the McMurray Formation in the following wells in the Hardy Field:
Application No. Well Perforated Interval (mKB)
1095525 00/06-28-076-04W4 347.0-347.5; 349.25-350.0
0/06-33-076-04W4 339.0-340.0; 341.0-343.5; 347.0-349.0
1095526 00/11-30-075-04W4 382.0-382.5; 386.25-386.75; 387.5-389.5
1095602 00/11-30-075-04W4 392.75-393.25
1275288 00/02-35-075-05W4 389.75-391.5
On August 7, 2003 the Alberta Energy and Utilities Board (EUB/Board) wrote to interested parties with respect to the above applications. In that correspondence, the EUB proposed that the applications be considered at an expedited interim hearing and requested input from interested parties on that proposal. The Board received responses and input from the EUB Staff Submission Group (SSG), Talisman Energy Inc. (Talisman), Nexen Canada Ltd, Devon Canada Corporation (Devon), and Stylus.
The Board has reviewed the responses and has decided to conduct an expedited interim hearing to consider the Stylus applications. Further, and as noted in the Notice of Pre-Hearing Meeting issued by the Board on March 5, 2003 and in its letter to interested parties of August 7, 2003, the Board will also consider an existing gas well belonging to Devon in the Hardy McMurray Z Pool (00/01-01-076-05W4 well), and existing gas wells belonging to Talisman in the Hardy McMurray V Pool (00/08-13-076-04W4, 00/13‑14‑076‑04W4 and 00/06-22-076-04W4 wells). This direction is consistent with EUB Interim Directive 99-1, which states:
In cases where an application is made for approval to produce gas from a well drilled into a pool with existing gas production, the Board will evaluate the application on a pool basis. Depending on the assessment of the impact of gas production on potential bitumen recovery, this could result in outcomes ranging from shut in of the entire pool to approval of the application and future applications being approved routinely once it is confirmed that the applied-for wells are in the same pool.
Based on the above the Board considers Stylus, Devon, and Talisman to be the applicants for the purpose of this interim hearing.
GB 2003-28
In General Bulletin (GB) 2003-28, BITUMEN CONSERVATION REQUIREMENTS ATHABASCA WABISKAW-MCMURRAY (GB 2003-28), the Board established a 3-phase process for the identification and curtailment of gas production that is associated with potentially recoverable bitumen. Phase 1 consists of an interim shut-in order with provision for temporary exemptions. Phase 2 provides for challenges to Phase 1 exemptions by way of expedited review proceedings (Phase 2 Proceedings) limited to assessing whether the gas is associated with potentially recoverable bitumen. Phase 3 contemplates a final review following the completion of all or a portion of the EUB's regional geological study.
The EUB recognizes that this interim hearing shall occur concurrently with the Phase 2 Proceedings described in GB 2003-28. The Board is of the view that because the sole focus of this proceeding will be the determination of whether there is gas associated with recoverable bitumen, an interim determination in that regard will preclude the need for any Phase 2 Proceedings with respect to the gas pools considered at the proceeding. The Board notes that one possible outcome of this interim hearing is the shut-in of the subject pools and emphasizes that parties will have no opportunity to review this decision until Phase 3. As such, the Board expects all parties with wells in the subject pools to be prepared to speak to the issue of association of gas with potentially recoverable bitumen in each of the wells in the subject pools, regardless of whether they are currently producing.
EXPEDITED INTERIM HEARING
Take Notice that the EUB will hold an interim hearing, commencing on October 1, 2003 at 8:30 a.m. The location of the interim hearing will be provided at a later time. The following is the filing schedule for the interim proceeding:
Submission(s) of those objecting to the Stylus applications and/or production of gas from the Devon and Talisman wells must be filed by Sept. 18, 2003
Submissions of the applicants and those supporting the Stylus applications and/or production of gas from the Devon and Talisman wells must be filed by Sept. 25, 2003
Board Interim Hearing Oct. 1, 2003
Parties filing submissions must serve a copy of their submission on all interested parties and provide the Board with 10 copies. All submissions to the EUB should be sent to the attention of:
Michael J. Bruni, Q.C.
EUB, Law Branch
640 5th Avenue SW
Calgary, Alberta T2P 3G4
In accordance with section 38 of the Alberta Energy and Utilities Board Rules of Practice, witnesses must give evidence under oath or affirmation.
PROCEDURAL DIRECTION
The Board will restrict its consideration at the interim hearing to the issue of whether the gas in the subject pools is in association with potentially recoverable bitumen. For the purposes of the interim hearing, the Board intends to rely on the relevant EUB Pool Order, as published by the EUB, unless a data error has been made in the Order or there is significant information that has become available after the Order was issued that would clearly alter the Order.
All submissions filed for this interim hearing must include a written summary of the party's position and the evidence relied upon in support of that position.
Parties will not be allowed to present any oral evidence in chief, as the parties to the interim hearing will have exchanged written evidence, however brief opening statements are permitted. The interim hearing will include cross-examination of the applicants by those objecting to continued gas production in the subject pools and examination by the Board staff and the Board. Cross-examination on the submissions of those objecting to continued gas production in the subject pools by the applicants and their examination by the Board Staff and the Board will follow. All parties will then have an opportunity to present oral argument.
No new evidence shall be filed at the interim hearing. A party must have in attendance the person or persons responsible for preparing its submission, including its evidence.
The Board emphasizes that this will be an interim hearing and therefore expects that parties will limit their written submissions accordingly.
In accordance with the Boards' practice, this interim hearing will not be subject to review pursuant to section 39 of the Energy Resources Conservation Act. In that regard, the Board notes that Phase 3 provides for final determination of whether gas is in association with potentially recoverable bitumen.
Additional Information
To obtain additional information or a copy of the applications contact:
Stylus Exploration Inc.
1200, 311 6th Avenue SW
Calgary, Alberta T2P 3H2
Attention: Ulrich Seggewiss
Telephone: (403) 517-8792
Copies of the applications are available for public viewing at:
EUB Information Services
Main Floor, 640 5th Avenue SW
Calgary, Alberta.
To obtain information about EUB procedures contact:
Law Branch
Attention: Danielle Brezina
Telephone: (403) 297-4112
Issued at Calgary, Alberta on August 28, 2003
ALBERTA ENERGY AND UTILITIES BOARD
Michael J. Bruni, Q.C., General Counsel
