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News Release

FOR IMMEDIATE RELEASE

EUB RELEASES FINDINGS AND RECOMMENDATIONS FROM SHININGBANK BLOWOUT INVESTIGATION

Calgary, Alberta (November 27, 2006) The Alberta Energy and Utilities Board (EUB) has issued its report on the blowout that happened on February 24, 2006, at a sweet gas well licensed to Shiningbank Energy Ltd. about 40 km northeast of Rainbow Lake.

The investigation team has determined that the blowout happened during drilling of the well at 40 metres when the rig pump encountered problems, drilling was suspended for repairs, and natural gas began to flow up the wellbore. The gas was diverted into a flare tank, but a washout occurred and caused a failure of the line to the tank, releasing some gas at the surface.

On February 27 the blowout was brought under control. The well was subsequently cemented and abandoned. There was no sour gas in the well, there were no injuries, the well did not catch on fire, and there were no public or environmental impacts off the site. Once the blowout was over, the EUB immediately began its investigation into the incident.

The investigation team found that Shiningbank’s diverter lines from the well utilized improper connections, and the drilling fluid weight used was less than required to control underground pressure in the formation. Shiningbank was assessed to be in noncompliance for both situations and enforcement action is underway. Shiningbank must conduct more thorough preparations and safety meetings before drilling other wells in the area and review their current emergency response plan.

The Alberta Energy and Utilities Board ensures that the discovery, development and delivery of Alberta's resources and utilities services takes place in a manner that is fair, responsible, and in the public interest.

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For more information, please contact:
Davis Sheremata, EUB Communications
Phone: 403-297-2252       
Email: davis.sheremata@gov.ab.ca

NR2006-50