News Release June 28, 2000

FOR IMMEDIATE RELEASE

IMPORTANT NEW PETROLEUM INDUSTRY CLEAN UP LEGISLATION - CAPP, SEPAC AND EUB ANNOUNCE EXPANDED ORPHAN PROGRAM

Calgary, Alberta (June 28, 2000) In 1994, with strong support from Alberta oil and gas producers, the Alberta Legislature passed Bill 5, establishing the Orphan Well Program to abandon oil and gas wells which have no remaining viable owner. Abandonment and clean up of these wells is 100 per cent funded by the petroleum industry. The Alberta Energy and Utilities Board (EUB) currently administers this fund and a regulatory framework aimed at limiting the occurrence of orphan wells. To date, the oil and gas industry has contributed over $20 million to the Orphan Well Program which has abandoned over 300 orphan wells.

As Alberta's petroleum industry matures, many of the thousands of oil and gas production facilities (not only wells, but also pipelines, gas plants, batteries, satellites, compressor stations, etc.) across the province are reaching the end of their operational lives. This spring the government of Alberta passed Bill 13, the Energy Statutes Amendment Act, 2000 to expand the existing Orphan Well Program to include pipelines, upstream oil and gas facilities and surface reclamation. The petroleum industry takes very seriously its responsibility to Albertans to properly abandon and reclaim those sites that are no longer needed. Industry associations actively participated with the EUB and a number of government departments in the development of this legislation to ensure that end. Clean up operations conducted under the expanded Orphan Program will continue to be funded 100 per cent by the oil and gas industry.

Fundamental to the expanded Orphan Program, the EUB and Alberta Environment will identify and hold licensees and owners responsible for properly abandoning, decontaminating and reclaiming upstream petroleum facilities. This will provide a level playing field for industry, so responsible companies do not bear the liability costs of non-compliant companies. If no financially viable, responsible party is found, then the fund will pay these costs. The new regulatory requirements resulting from Bill 13, the Energy Statutes Amendment Act will result in improved management of energy industry abandonment liability, including the timely cleaning of sites at the end of their lives.

Ensuring reclamation of oil and gas sites remains the jurisdiction and responsibility of Alberta Environment. However, the EUB's administration of the expanded Orphan Program will provide "one-window service" to the energy industry for collecting both abandonment and reclamation security deposits, and the annual levy to fund abandonment and reclamation of orphan sites.

This unique partnership between the petroleum industry, the regulator and the government of Alberta, protects the public from significant potential environmental issues and costs associated with abandoning, decontaminating and reclaiming those lands that have been involved in petroleum resource recovery. It is a model for the future as Alberta's petroleum industry matures.

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This news release is also available on the EUB web site at http://www.ercb.ca

For further information please contact:

John Nichol, Executive Manager
Surveillance Branch, EUB
Tel: (403) 297-2573
Fax: (403) 297-8114

Hal Knox, Manager, Corporate Compliance Group
Surveillance Branch, EUB
Tel: (403) 297-3563
Fax: (403) 297-7168