Cambrex Corp. (CBM)

[johnlw]

EnCana gives up coal bed appeal

Shaun Polczer
Calgary Herald

Thursday, October 09, 2008

EnCana Corp. on Wednesday abandoned an appeal of an Alberta Energy and Utilities Board ruling that insists natural gas in coal is separate from coal.

Instead, EnCana will pursue legal remedies in court to address what it sees as trespass on so-called split-title lands, company officials told the Herald.

"We're going to focus our efforts in Queen's Bench," said Stacy Knull, a vice-president for the Canadian foothills.

The issue came to a head last year after the EUB began granting coal bed methane licences on land claimed by EnCana that it inherited from the Canadian Pacific Railroad, based on titles that pre-date the creation of Alberta in 1905.

EnCana claims it owns the gas in coal seams that were reserved for the railroad and granted to the CPR starting in the 1800s.

However, the EUB ruled the natural gas in the coal is separate and distinct from the surrounding rock and began issuing production licences.

Shortly after the EUB ruling, EnCana filed 11 suits against a series of companies that were granted permits to drill on the disputed land, including Quicksilver Resources, Devon Canada and ARC Energy Trust.

The EUB has continued to grant coal bed licences on split-title lands while the lawsuits are pending.

According to company counsel Graham Baugh, the EUB appeal was impeding efforts to move those cases forward.

"The appeal process was slowing down the trial process," he said.

EnCana had originally expected an EUB hearing in November, but probably wouldn't have received a decision until next year. By abandoning the EUB decision, EnCana is hoping for a trial date starting next spring. Hanging in the balance are hundreds of million cubic feet of coal gas reserves worth potentially billions of dollars.

Knull said Wednesday's decision will speed the process although he didn't know when to expect a final resolution.

[e-mail]
© The Calgary Herald 2008