Northern News Services
Published Thursday, June 12, 2008
KA'A'GEE TU/KAKISA - Paramount Resources Ltd. has announced they are offering a number of their properties for sale including its Cameron Hills project.
The energy company made their intentions public in mid-May.
In addition to Cameron Hills, located on the border south of Kakisa, Paramount is also exploring the sale of three of their other projects in Northern Alberta.
"We always evaluate our properties and look at ways to enhance shareholder values," said Shirley Maaskant, the regulatory and community affairs manager for Paramount.
The timing is right for Paramount to sell its Northern properties and focus its attention elsewhere, Maaskant said.
A decision on whether the properties will be sold and to whom won't be available until at least the third quarter of this year, said Maaskant.
"It's possible it won't be sold," she said.
Although the Cameron Hills project is up for sale Paramount is still moving forward with plans to drill new oil wells in the area.
"It's an important asset to Paramount and it requires ongoing drilling and enhanced production. It's business as usual," Maaskant said.
The company plans to drill five to eight wells in the project area during the 2008-09 winter season.
During an environmental assessment conducted in 2003 Paramount was asked to give their predictions for future developments.
The company predicted adding an additional 50 wells at a rate of five to eight per year over 10 years, said Maaskant.
If this year's plans move forward, the wells will be the first in that series. Paramount currently has a total of 18 oil wells tied into their pipeline system in Cameron Hills.
"Clearly the hope is they're economically viable," she said.
The new wells would only be tied into the existing infrastructure if their production will pay for the cost of their development in a reasonable amount of time, said Maaskant.
Paramount's plans for the next winter season hinge on being able to obtain the necessary permits.
The company was unable to do any drilling during the 2007-08 winter season because of an ongoing consultation process between the federal government and the Ka'a'gee Tu First Nation (KTFN) in Kakisa, Maaskant said.
In July 2007, the Federal Court ruled in KTFN's favour in two related cases against the government of Canada. It was ruled that the government violated Ka'a'gee Tu's right to meaningful consultation before a final decision was made on a modified land use permit granted to Paramount in 2005.
The court ordered the federal government had to engage in a process of meaningful consultation with KTFN and accommodate their concerns if necessary.
Until the consultation process is finished the Mackenzie Valley Land and Water Board has suspended the application process for sites in the area, Maaskant said.
"We know Canada has been consulting and we're certainly optimistic in the near future Canada will finish the court-ordered consultation and we'll be able to recommence the application process," she said.
During the winter the company did refurbish one existing well, a process that involves doing work on the reservoir to enhance production, and also did equipment maintenance on seven other wells.
"We only have winter access so we have to be proactive and get work done that needs heavy equipment," she said.
The federal government has been consulting with Ka'a'gee Tu but the process is moving slowly, said Chief Lloyd Chicot.
"We've been talking on and off since the court case last year," Chicot said.
Currently, the consultation talks are about reaching a common understanding and deciding how to deal with issues in the future, he said.
The talks have required Kakisa to do a lot of explaining to the government about their concerns with the project.
The band feels they're doing a lot of the work without getting much information back, said Chicot.
"It's not where we'd wanted to go," he said.
Chicot said the band was made aware of Paramount's plans to sell their Cameron Hills project soon after they made the announcement.
"It wasn't surprising, the way they've been dealing with a lot of the issues," he said.
Chicot said Paramount hasn't been forthcoming in addressing the band's concerns with issues such as plans for oil spills, water monitoring and air quality.
"Paramount's really a hard company to work with. Maybe if another one comes in they'll be willing to work with the community and do some of the things they want done," Chicot said.
"It could work out for the better in the long run.