Richard & All / Devlan & Mackenzie Valley Pipeline
You were right about the 2003 CAPEX amount of $13.6 million about a month ago. The company (DXI) just announced they increased it by 22%, another $2.2 million. I suspect their cash flow estimate may increase to a like total amount.
Speaking of Devlan, I was checking into their properties with interest focused on the NWT. They are sitting on some great acreage up there. But, I want to express the "sitting" part of the comment.
They need a pipeline and that's a dragged out process between a few groups. I don't see any transport of natural gas for quite a few years - somewhere between 2007 to 2010.
Here's a recent article by the Globe & Mail that sheds a little light on what's been happening.
Firms Near Filing Plan For Pipeline
Indian Affairs Minister sees native stake in Mackenzie project soon to be resolved
By LILY NGUYEN
Friday, February 14, 2003
CALGARY -- Indian Affairs Minister Robert Nault said petroleum producers are on the verge of filing plans for a multibillion-dollar Arctic gas pipeline, but said aboriginal groups involved in the project shouldn't look to Ottawa to fund their stake.
"We're getting as close [to an application] as we've ever been," he said in Calgary, where he announced plans to open a new pipeline regulatory office in Yellowknife with an initial $10-million budget over three years.
Mr. Nault, who spent time in Calgary meeting key players in pipeline negotiations, predicted a major hurdle in the $4-billion Mackenzie Valley pipeline proposal is about to be cleared. That's the Aboriginal Pipeline Group's (APG) attempts to raise $70-million to secure its one-third stake in the project, considered a precursor to the Mackenzie Valley partners filing an application.
The APG, an umbrella group representing many First Nations in the Northwest Territories, initially sought loan guarantees from Ottawa to finance its stake.
But yesterday, Mr. Nault all but ruled out that avenue.
"We have made it clear to both the APG and industry that we expect there will be an agreement between themselves that will be market driven. That is not the role of the government of Canada to intervene as a third party," he said.
Mr. Nault said Roland Priddle, the federal-appointed negotiator in pipeline talks, is still expected to come out with a report, but his focus is assessing developments rather than whether Ottawa should kick in loan guarantees or funding.
On the other hand, he said the APG is making progress seeking financing in the private sector.
"They're presently in discussions as we speak," he said.
Fred Carmichael, head of the APG, was not available for comment.
Speculation has Calgary-based TransCanada PipeLines Ltd. as a potential source of financing for the APG. Company officials have confirmed talks between the two parties but otherwise refused comment on the matter. Enbridge Inc., another Calgary pipeline company, has also said it would consider becoming involved with the APG.
Both companies have made it clear they are interested in building or operating the project, and both have voiced interest in taking a stake in it.
But Pius Rolheiser, a spokesman for Imperial Oil Ltd., which leads the Mackenzie Valley producers group, said the group would not support the APG selling part of its equity stake to another party.
"It's certainly correct the APG can secure funding from whomever it chooses," he said.
On the other hand, he said, "we would not support any action or new agreements that would dilute or reduce the APG's rights and influences."
While the producers are not part of the talks to secure financing, they would have to be brought in if the APG decided to sell part of its stake, he said.
Mr. Nault said that while Ottawa is loath to get involved with financing a pipeline, it is ready to play a role in pipeline-related economic development.
That includes participating in such areas as training, joint ventures and infrastructure, he said.
"The government of Canada expects to play a role in the development of the North."
The new office in Yellowknife, NWT, dubbed the Pipeline Readiness Office, was created to deal with increased demands for permits, research and public and community consultations, among others.
Mr. Nault said its location in Yellowknife is not a comment on which pipeline route Ottawa prefers. A larger, rival pipeline is also being proposed to transport gas from Alaska to the United States. That pipeline is supported by Yukon, while the NWT backs the Mackenzie Valley pipeline.
Mr. Nault, who is set to go to Washington at the end of the month to pitch neutrality on a pipeline route, also hinted that Ottawa's reluctance to get involved with pipeline financing could stem from its desire to see the United States stay out of that area itself.
Last year, U.S. representatives mulled an energy bill that would prop up an Alaska pipeline with more than $10-billion (U.S.) in potential subsidies.
While that proposal was eventually dropped as legislative sessions ended, Mr. Nault said: "My understanding is it is alive and well and will be reactivated if it's not already reactivated."
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Here's an excellent location to keep abreast of oil and gas activity in the NWT. I don't think you can find any better of a source. You will need Adobe Acrobat (a free program) to view the first listed URL address.
gov.nt.ca
Main Home Pages
Oil & Gas = gov.nt.ca
Pipelines = gov.nt.ca
Investors keep abreast of happenings via the news release services which we all browse. However, if you want to read news articles from a local perspective, here's the best location for that.
nnsl.com
When you get to this page, perform a search for " MacKenzie Valley Pipeline " and you will get a wealth of recent articles on the subject.
Here's a recent article on Oil & Gas in the NWT.
The New Energy Option
North American oil and gas industry looks North of 60
Thorunn Howatt
Northern News Services
There's talk of war, rising gas prices, demand for clean energy and a new attitude in the North.
These factors and a free market president in Washington's White House are making the Northwest Territories and Nunavut the next best option for North American energy independence.
Petroleum riches wait under the vast Arctic permafrost and their value is rising as the south's more traditional resources deplete.
Nunavut's High Arctic Islands, the Beaufort Sea-Mackenzie Delta, the Central Mackenzie and the Deh Cho regions hold trillions of cubic feet of natural gas and millions of cubic metres of oil.
As energy prices rise, the energy boom moves North with hundreds of millions in exploration dollars.
But industry and government have been served notice - Business is going to have to reap profits the Northern way. That means a rigorous environmental permitting process, fair compensation for aboriginal land groups and jobs for Northerners.
Land claims good for business
In Southern Canada, the concept of aboriginal land claims pits liberals against conservatives and business people against social activists. In the North, settled land claims bring prosperity for the people and certainty for industry.
Nunavut craves attention from exploration companies now that the territory has a settled land claim. Exploration rules are clearly laid out and compensation packages are up front. The eastern Arctic's oil and gas future may be distant but there will be no surprises when the economics are right to get Nunavut's resources out.
The people of the Mackenzie Delta are also anxious to work in and with the North American energy industry.
Big oil companies moved back to the region about three years ago. The area's aboriginal land claim groups - the Gwich'in and the Inuvialuit - both have financial and political agreements in place. Business has to knock on their doors first if it wants to work in the region but the welcome will be warm.
Since the exploration resurgence, the Delta business culture has been based on joint venture schemes. Southern specialists team up with aboriginal corporations mixing Northern traditional knowledge with southern expertise.
The greatest uncertainty in the Delta lies in a Mackenzie Valley pipeline. Explorers want to know they will be able to get their gas out if they are going to drop big bucks.
Drilling down the valley
Down the valley, the Central Mackenzie is getting busy. Drilling is scheduled for Colville Lake just as Imperial Oil's Norman Wells project is starting to cool down. Right now there is no way to get Colville gas out.
That may change depending upon the outcome of two major pipeline proposals offering ways to ship natural gas southward. So Sahtu aboriginal leadership is in decision-making mode.
Norman Wells is the starting point of an oil pipeline built in the mid-eighties. Many Dene feel the project went through before they could maximize any benefits. There are bad memories and mistrust in the Sahtu. Dene leaders want more influence on a future project through their land.
The Deh Cho region, located in the southern NWT and along the Mackenzie Valley, will be buzzing with exploration drilling this winter at Fort Liard and the Cameron Hills.
But the area hangs in political limbo. The region has no settled land claim. Without a claim, aboriginal traditional landholders won't get royalties from energy taken.
During the late nineties, Fort Liard prompted the federal government to issue exploration rights despite the lack of a land claim settlement. It wanted the jobs that came with development. Now the exploration licenses are expiring and the Acho Dene Koe band is thinking about having lands opened once again.
Through the process, they hope to post more land but they want a different deal - This time they want sub-surface rights.
The terms in the North are different all right - but different doesn't mean worse. The unique attitude can mean wealth for Northern people shared among its many guests. There is enough to go around for everyone.
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