PRD Energy Inc PREGF

land sale results

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Friday, May 12, 2006 CALGARY — Energy explorers plan to spend $70.7-million looking for oil and natural gas in the Central Mackenzie Valley in the Northwest Territories, the most ever committed in a single year. The result of a sale of exploration rights by the federal government was announced this morning by Indian and Northern Affairs. The previous record for land in the Central Mackenzie Valley was $63-million in 2004. Exploration in the NWT is escalating as the proposed Mackenzie Valley natural gas pipeline inches towards reality. The project would be connect the Mackenzie Delta with Alberta and would be the first link to move gas from the north to the south. Year-long hearings to assess the proposal are continuing and the pipeline could be in service in 2011. Six parcels in the Central Mackenzie were awarded and four were taken by a 50-50 partnership between Talisman Energy Inc. and Devon Energy Corp, who committed to spend $53.9-million over the next five years. One parcel was won for $6.3-million by Paramount Resources Ltd., which is already active in the region. The last parcel was taken by a consortium of firms led by Husky Energy Inc. for $10.5-million. Husky is also active in the region and drilled wells this past winter. This week's sale follows a sale of exploration rights in the Mackenzie Delta last week, where four companies including EnCana Corp. committed to spend about $52-million on two parcels. The record for the Delta was set in 2000 when companies committed $466-million in exploration spending but much of that went unspent as firms relinquished their rights. The only tangible thing to emerge from that sale was an unsuccessful $60-million well drilled by Devon in the Beaufort Sea this winter, the first in the area since the late 1980s. © The Globe and Mail