News Release 7 June 1999

FOR IMMEDIATE RELEASE

EUB ISSUES 1998 RESERVES REPORT

Calgary, Alberta (7 June 1999) The Alberta Energy and Utilities Board (EUB) today released its annual reserves report Alberta's Reserves 1998: crude oil, oil sands, gas, natural gas liquids and sulphur. All stakeholders benefit when updated information provides a clearer picture of our current reserve circumstances.

Crude Oil

At the end of 1998, Albertas remaining reserves of crude oil were estimated at 7.17 billion cubic metres (45.1 billion barrels), including

• surface-mineable crude bitumen reserves of 6.4 billion cubic metres (about 40 billion barrels),
• in situ crude bitumen under active development of 450 million cubic metres (2830 million barrels), and
• conventional crude oil reserves of 315 million cubic metres (1984 million barrels).

Compared to 1997, this was a 21-million-cubic-metre (132 million barrels) drop in surface-mineable crude bitumen and an increase in in situ bitumen of 176 million cubic metres (1107 million barrels). Remaining conventional crude oil reserves decreased 3.5 per cent or 11.6 million cubic metres (73 million barrels) from 1997. The decline in surface-mineable reserves equalled the production from the Suncor and Syncrude mining projects combined. The in situ reserve increase was the result of a reserves update on commercial projects and primary and experimental schemes.

Note: In 1998, the Board revised its reporting procedure for surface-mineable crude bitumen to report total remaining reserves rather than reserves under active development. For this year, in situ crude bitumen reserves represented areas under active development. This will be revised next year to report the total remaining reserves.

For conventional crude oil, new pool discoveries and development of existing pools added 26.4 million cubic metres (166 million barrels) to initial established reserves. New and expanded enhanced recovery schemes added 2.9 million cubic metres (18 million barrels) for a total reserves increase of 29.3 million cubic metres. These additions replaced 59 percent of the years 50.1-million-cubic-metre-production (315 million barrels). With net reserves reassessments of 9.2 million cubic metres (58 million barrels), a total of 38.5 million cubic metres (242 million barrels) was added to initial established reserves. When annual production is subtracted from reserves additions, there was a net decline in remaining reserves.

Natural Gas

EUB estimates show that Alberta's remaining natural gas reserves at the end of 1998 stood at 1240 billion cubic metres (44 trillion cubic feet), a 44-billion-cubic-metre (1.6 trillion cubic feet) reduction from 1997. The net result of exploration, development, and reassessment was the addition of 93 billion cubic metres (3.3 trillion cubic feet) to the province's established gas reserves. This represents replacement of 68 per cent of Alberta's gas production in 1998 of 137 billion cubic metres (4.9 trillion cubic feet). The initial established reserves attributable to new pools discovered in 1998 was 13.4 billion cubic metres, while development and re-evaluation of existing reserves resulted in a net addition of 79.6 billion cubic metres.

Note: The EUB determines changes to remaining reserves for natural gas by adding new gas discoveries, development of existing pools, reassessment of known pools, and subtracting the year's production.

Natural Gas Liquids and Sulphur

During 1998, remaining reserves of propane, butanes, and pentanes plus decreased 3.1, 1.3, and 4.1 per cent respectively. Remaining reserves of sulphur produced from natural gas and crude bitumen decreased by 5.3 and 5.8 per cent respectively.

Drilling for Oil and Gas

Drilling activity is one of the most important factors in the addition of new reserves. As a result of declining oil prices in 1998, oil development drilling was down 69 per cent from its record level in 1997 and its lowest level since 1991. Oil exploratory drilling was also down 60 per cent to its lowest level since 1992 and 29 per cent lower than the average over the last ten years.

Crude bitumen commercial drilling was also affected by lower oil prices, leading to an 87-per-cent drop from last years record pace to its lowest level since 1994. Crude bitumen exploratory drilling was down 24 per cent from last year but still 135 per cent above the average over the past ten years.

Gas development drilling was at a record level in 1998, exceeding the previous high set in 1994 by 10 per cent and reaching past the 3400 well level for the first time. Gas exploratory drilling was at its highest level since 1994. Although nearly doubling last years level and exceeding the average over the past ten years by 59 per cent, gas exploratory drilling was well short of the record level established in 1980.

Copies of ST 99-18 Alberta's Reserves 1998: crude oil, oil sands, gas, natural gas liquids and sulphur, are available for $250 each from:

EUB Information Services
Main floor, 640 - 5 Avenue SW,
Calgary, Alberta, T2P 3G4.
Telephone: (403) 297-8190
Fax: (403) 297-7040

You can view a copy of this report free of charge in EUB Information Services.

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For more information, contact:

Andy Burrowes
Section Leader Reserves Analysis
EUB Resource Appraisal Group
Tel. (403) 297-8566
Fax (403) 297-2592
640-5 Avenue S.W.
Calgary, Alberta
T2P 3G4

NR 99-09