News Release February 15, 2000

FOR RELEASE AT 1:00 PM

EUB APPROVES PANCANADIAN CHRISTINA LAKE THERMAL PROJECT

Calgary, Alberta (February 15, 2000) The Alberta Energy and Utilities Board (EUB) today said that it is prepared, with the approval of the Lieutenant Governor in Council, to approve an application by PanCanadian Resources, Heavy Oil Business Unit (PanCanadian) for a Steam Assisted Gravity Drainage (SAGD) oil sands recovery scheme. The proposed thermal project is located approximately 170 kilometres south of Fort McMurray, Alberta. When fully operational, the project's production rate is expected to be 8000 to 11 000 cubic metres per day (50 000 to 70 000 barrels per day). This would be achieved by the year 2009 through three phases of development.

PanCanadian's application was the subject of an EUB public hearing held in November 1999 in Fort McMurray, Alberta. Having carefully considered all the evidence, the Board has determined that the proposed project represents an orderly and efficient use of Alberta's energy resources. The Board further determined that the proposed SAGD method of bitumen extraction optimizes recovery of the Athabasca Oil Sands while minimizing environmental impacts.

The Board concluded that the minimal operational and environmental risks associated with this project can be managed effectively and that approval of this project is in the public interest, subject to the conditions noted in its decision. These conditions include:

• PanCanadian must reassess the impacts of its groundwater withdrawals and report its findings to the Board by January 2, 2003.
• PanCanadian must implement produced water reuse for this project for any expansion plans beyond Phase 1 and submit a report no later than January 2, 2003, outlining its plans for water recycling.
• PanCanadian must implement an advisory working group of community leaders from Conklin, Janvier, and Chard to address community issues.

The Board encourages PanCanadian and other oil sands developers to work cooperatively with regional planning groups. The Board expects PanCanadian to address environmental issues arising from the project through active participation in regional environmental management initiatives.

The Christina Lake thermal project will employ a series of dual horizontal wells for steam injection and bitumen recovery. Up to 700 horizontal wells could be drilled by the time all three phases are operational. Each phase will have its own central plant facility consisting of water treating, steam generation, production separation, and other related facilities.

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This news release and Decision Report 2000-7 are available on the EUB Web site at http://www.ercb.ca

For more information, please contact:

Bob Curran
EUB Communications
Tel. 403-297-3392
Fax 403-297-3757
E-mail: bob.curran@eub.gov.ab.ca

NR2000-7