Dehcho chiefs OK exploration program - Decision opens up two parcels in territory's southwest corner - Last Updated: Tuesday, August 15, 2006 | 12:01 PM CT CBC News
For the first time in 10 years, new land in the Dehcho region of the N.W.T. is being opened to oil and gas exploration.
At the Dehcho Assembly in Fort Simpson last week, leaders passed a resolution supporting new exploration in the Fort Liard region.
While the region boomed in the 1990s, exploration has tapered off in recent years in the southwest corner of the N.W.T. The Dehcho people of the region objected to development without a land claim in place.
Five years ago Dehcho leaders signed an agreement ensuring the involvement of all chiefs in decisions about development in the region.
Agreement hasn't been easy to reach between pro-development and more traditional communities. So the chief of Fort Liard, Harry Deneron, was thrilled to win the support for a round of exploration on two parcels of land near his community.
Deneron was elected in July 2005 on promises of providing more work for his job-starved community.
"Fort Liard, we got a large number of unemployed people and this is the direction they gave me to open up and create some work," he said. "It's pretty hard to create work when you don't have any resources. Oil companies have all sorts of interest in our land, so therefore we are going to work with them."
Deneron says the community has learned a lot about the industry since the last boom, and expects it will have an even better relationship with the companies this time around.
Dehcho Grand Chief Herb Norwegian says it's a positive step for Fort Liard and the Dehcho as a whole.
"We were able to pull a resolution together that accommodated the neighbouring communities of Nahanni Butte and Trout Lake and they felt comfortable with the resolution and so we gave unanimous support," he said.
The process to issue exploration rights for land near Fort Liard will begin this month with a call for nominations.
Depending on the interest from industry, successful bids are expected to be announced in January.
Deneron says that means there could be new seismic work in the region as soon as this winter.
Northern Sun is an Alberta-based NatGas exploration company, currently producing 315 boe/d (June 13/06) looking for over 1,000 boed by the end of 2006. NSE have an aggressive drilling program underway in Alberta and Saskatchewan.
Company update June 13, 2006 “Current production is down due to natural production declines and higher than expected pipeline pressures in the 3rd party mid-stream transporters at the Company’s Lavoy and Grouard properties.”
The exciting story however is a JV agreement in place with the “Ka´a´gee Tu” Indian Band on several millions of acres of proven gas properties in the Northwest Territories. I have accumulated NSE shares as once a resource agreement is settled between the Ka´a´gee Tu community in the NWT and the Feds - I expect this stock to explode in price. The proposed Mackenzie Valley Pipeline will run through the south western edge of this property. Property descriptions and links to excellent maps of land holdings and the proposed Mackenzie Valley Pipeline route
Many retail investors likely do not properly understand the true value and reasons for investing in NSE.
SEVERAL MILLIONS OF ACRES IN THE NORTHWEST TERRITORIES!
It’s really that simple.
The current drilling program with increasing reserves and production in Alberta and Saskatchewan is in place to build up value for investors now, while at the same time moving the process forward in the NWT. This takes time. NSE management spear-headed by Chris Cooper have spent many years working on this project, and will settle for nothing less than a home-run. Since the process has its expenses the current program of building NatGas reserves and production is to pay those expenses and also build shareholder value along the way. These are shallow (400-1200 metres) wells that offer a 5-7 year reserve life costing an average of approximately $350,000.00 each. Pretty straight forward development by successful professionals who know how to remove risk. Not a lot of blue-sky with current drilling but we investors get paid to wait as they have been quite successful.
What is the potential of the NWT land package?
Easy, Paramount Resources http://www.paramountres.com/ reports production of 5,000 boe/d from their Cameron Hills gas wells. These wells are located within NSE’s massive NWT property (often referred to as the Cameron Hills) and were “grandfathered” when the results of the Berger Inquiry stopped all development on native claimed land in the 1970’s that has remained in effect to this day.
This was to allow time for the various native organizations to settle their land claims and allow them the opportunity to take a meaningful role in development of resources on their traditional lands. This is quickly coming to closure as currently only one group is unwilling to settle, but it appears it is just disagreement on details, not a disagreement of the project itself. It would seem that Imperial Oil agrees as they have re-started spending money on all the detailed planning for the route. They have even set 2011 as the year they expect gas to begin flowing south from the Mackenzie Delta.
Does NSE Need the Mackenzie Valley Pipeline?
Yes, and No. The proposed pipeline route cuts through the SW corner of NSE’s property, so obviously these millions of acres will be tremendously valuable once the pipeline is in place. But, there are several million acres on the Alberta border that will likely be developed prior to 2011 once the Feds and Ka�a�gee Tu complete their negotiations. There are a couple pipelines nearby with spare capacity that can be accessed at a reasonable cost. Agreements on something as valuable as this are tough slogging as there is a lot at stake and each side is being very careful. The final agreement will set many precedents and will have wide ranging ramafacations.
Since everyone now agrees that they want the gas to flow and there is a sense of urgency for additional gas supply to the North American consumer - I do not think we will have to wait all that long. NSE is not a stock for day traders, only for those who understand the story and are willing to wait. I am one of those and I expect the pay-day to be very substantial.
from the website:
“NORTHWEST TERRITORIES
* Northern Sun�s partnership with the Ka�a�gee Tu will allow the company access to the Ka�a�gee Tu traditional lands - upon rights issuance - several million acres
* Currently awaiting framework approval from federal government to gain access to traditional lands for oil and gas exploration
* Recent political developments are aimed at lifting the existing moratorium for new resources developments and community benefit plans”
MANAGEMENT
Chris R. Cooper - President & Director
Chris Cooper has eight years of experience in management and finance in the oil and gas industry. Mr. Cooper co-founded Choice Resources Corp., an intermediate oil and gas producer with over 1400 boepd, and remains as a director of Choice. He is a co-founder and member of the board of directors of Watch Resources Ltd., a public gas producer in a joint venture with the Fishing Lake M�tis Settlement in northern Alberta, as well as a co-founder and current board member of Banks Energy Inc., a public oil and gas producer in a joint venture with the Poundmaker Cree First Nation of Saskatchewan. This was recently acquired by Arapahoe Energy Corp. A former member of the board of directors of Pan-Global Energy, a public oil and gas producer in a joint venture partnership with the Onion Lake First Nation of Saskatchewan. (C. Cooper has been purchasing stock of NSE on the open market for several months, in small quantities)
The other Directors are a “must read” with their history of proven success:
John A Land, P. Land Director & COO
R.W. (Bob) Pollock, P. Eng Director
Harvey Brooks Director, Chairman Audit Committee
Steven J. Bruk Director
www.northernsunex.com/management.html
For those who believe in a great exploration team have a look at the bios, a very solid team.
“Grouard, AB The Company has completed an additional 28 km - 2 D seismic program over its property near Grouard, wherein the Company has approximately twenty (20) sections of full rights consisting mainly of crown land and other leases with the Kapawe�no First Nation. The seismic data has
been evaluated and seven (7) prospective multi-zone drilling locations have been selected and regulatory approvals for such locations have or are in the process of being acquired. The Company is also in the process of negotiating for access to lands held by other operators where additional multi zone gas prospects have been identified by the Company.
Lavoy, AB At the Company�s Lavoy property, a service rig has arrived and production from the Company�s fourth well is expected to begin within the next two weeks. The well was tied in prior to spring break-up but the Company could not contract a service rig at the time in order to complete one of the wells productive zones prior to road bans in the area.
Peace River Arch, AB The Company was successful at crown land sales purchasing two (2) new sections of land in the Worsley / Clear Hills area in north western Alberta. The Company purchased 2D and 3D seismic data over the land and has identified at least two (2) 2250 meter multi zone oil and gas test well locations targeting the Leduc formation. Successful exploration oil wells on trend average reserves in the order of 100,000 to 150,000 barrels and gas wells in the order of 5 BCF of gas. The Company is currently in the process of acquiring the necessary regulatory approvals to drill both prospects.
Fort Pitt / Senlac, SK
At the Company�s Fort Pitt property its 100% working interest exploration test well was drilled to a depth of 800 meters encountering various prospective zones. Upon initial production tests the well encountered gas from a shallow horizon, as well as oil in the Mannville zone. The well has been shut in temporarily as the Company is evaluating plans to re-complete the well as an oil well.
At the Company�s Senlac property its 100% working interest exploration well is producing gas from the Colony formation, the McLaren was found to contain oil.
Battle Creek, SK The Company is currently reviewing candidate gas zones and planning a re-completion program for its six existing gas wells in the Battle Creek area. The wells were drilled last year and are tiedinto existing third party facilities. The Company has scheduled to begin the re-completion operations in mid-summer.
SW Saskatchewan The Company is planning on drilling two new exploration test wells. The first gas test will be on its Divide acreage targeting multi zone prospects to a depth of approximately 1100 meters, as well as a new exploration well on its 100% working interest lands in the Supreme area testing similar prospects. Both well locations have been identified through the interpretation of 2D seismic and are close to a third party energy trust pipeline and compressor facilities.
Northern Sun is an Alberta-based exploration company with approximate production of 315 boed. Current production is down due to natural production declines and higher than expected pipeline pressures in the 3rd party mid-stream transporters at the Company’s Lavoy and Grouard properties.”
NORTHWEST TERRITORIES
Northern Sun�s partnership with the Ka�a�gee Tu will allow the company access to the Ka�a�gee Tu traditional lands - upon rights issuance - several million acres.
Currently awaiting framework approval from federal government to gain access to traditional lands for oil and gas exploration. Recent political developments are aimed at lifting the existing moratorium for new resources developments and community benefit plans. (In plain english it sounds like forces are in play to resolve negotiations. Once resolved NSE will have access to one of the largest and richest NatGas fields in all North America).
Brief Points from a conversation with President Chris Cooper March 16, 2006:
- NSE does not necessarily stand out from their peers in western Canada, there are many other junior gas stocks that are comparable
- NSE is a play on the NWT with their multi-million acres of gas properties
- NSE recently paid $1million for a property where a high impact well will be drilled, probably in June. If successful look for 250-400boe/d from this, which could be a substantial increase over current production. Other properties they bid on in most cases they were outbid by 10x - 12x !!
- they are working on getting a pilot project going on a portion of the NWT property, a multi-million acre section on the Alberta border. There are existing pipelines with excess capacity that run up to the border from Alberta, plus Paramount Resources has a pipeline in the immediate vicinity with excess capacity. Getting any gas discovered to market would be quite simple and inexpensive.
- There are existing oil and gas wells right up to the border
- on the west side of their property (B.C.) Purcel Energy is producing 75-100 million cf/d
April 5/06 article I wrote on Northern Sun Exploration for ResourceInvestor.com