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EnCana CEO Calls Deep Panuke 'A Keeper'

EnCana Corp. has pulled back on its exploration activities in eastern Canada because of limited success, but CEO Randy Eresman said Thursday the company remains committed to developing the natural gas reserves in the Deep Panuke field offshore Nova Scotia. The field, he said, "is a keeper for us."

The Calgary-based producer submitted a Development Plan Application with Canadian regulatory officials last November to restart the project (see Daily GPI, Nov. 13, 2006), and preliminary hearings on the revised plan are expected to begin in early March.

Eresman, who spoke with reporters about the project during a conference call, said EnCana had no plans to sell or abandon the offshore gas project.

"It is a project we are continuing to proceed with, and we hope to have that development on stream in the next number of years," Eresman said.

EnCana first applied to develop Panuke in March 2002, but limited success forced it to request a regulatory timeout and then to withdraw the application (see Daily GPI, Feb. 18, 2003). Following an internal reassessment, EnCana last summer completed an Offshore Strategic Energy Agreement with Nova Scotia that established the framework for a do-over (see Daily GPI, July 5, 2006).

In the revised application, EnCana estimated Panuke production eventually would reach 300 MMcf/d, a 25% reduction from its original forecast of 400 MMcf/d.

The initial well program offshore Halifax would consist of completing four previously drilled production wells to prepare them for production, drilling one new injection well in Margaree and one new production well in Panuke. Up to three new production wells could be drilled after first gas in Cohasset, Deep Cohasset, Panuke or Margaree. The main project components include a Mobile Offshore Production Unit, subsea flowlines and umbilicals, subsea wells and an export pipeline.

If the exploration program is successful, EnCana anticipates first gas production could be in late 2010. The project's expected life range is eight to 17.5 years, EnCana noted.

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