Vancouver-based Epic Oil and Gas Ltd. said Thursday that AEC Storage and Hub Services Inc., a subsidiary of Alberta Energy Co. Ltd., has given notice to Epic’s U.S. subsidiaries Rival Resources Inc. and American Safari Resources Inc. that it is terminating its letter of agreement on the Birch Bay Gas Storage Project in northwest Washington State.

In October 2000, Epic said AEC completed a four-mile seismic survey over part of the project area. The results of this work did not meet AEC’s expectations and consequently AEC suspended work on the project.

In accordance with the terms of the agreement, AEC will pay to Rival and American Safari a substantial portion of a $50,000 “Success Fee.” In conjunction, Rival and American Safari have assigned to AEC thirty-eight oil and gas mineral leases covering 621 acres in the project area.

Epic said the AEC decision will not negatively affect progress on Rival and American Safari’s ongoing natural gas exploration program in the same general area of Washington State; in fact the receipt of the Success Fee will assist work. The companies said results of recently completed programs in the area are “very encouraging.” The companies are scheduled to drill some of the best shallow natural gas targets this winter, Epic said.

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