NEWS BULLETIN

May 14, 2001 --- Vol. 7, No. 56May 2001

Evergreen buys Pioneer Unit from Unocal, Ocean Energy

Independent Evergreen Resources Inc. said it has purchased the 48,000-acre Pioneer Unit from Ocean Energy and Union Oil of California for a cash price of approximately $960,000. The Denver-based firm acquired a 100 percent working interest in the prospective coal bed methane property, which lies about 30 miles northwest of Anchorage between Houston and Wasilla.

Evergreen said the acreage “also contains deeper pay potential in traditional natural gas reservoirs. The company believes the Pioneer Unit’s coal seams “may contain potential unrisked recoverable reserves of up to 500 billion cubic feet of gas.”

Evergreen also signed a joint venture agreement with a work commitment with J.M. Huber Corp. covering 29,000 acres of coal bed methane properties in Huerfano County, Colo., in the northern end of the Raton Basin. The properties are located approximately 20 miles north of Evergreen’s existing 258,000 acres of coal bed methane properties in Las Animas County, Colo.

Evergreen President and CEO Mark S. Sexton said of the purchases: “Evergreen continues to position itself for value creation through organic growth, well into the future. While our current development focus continues to be the Raton Basin, we have expanded our portfolio of unconventional natural gas projects in North America.”

Evergreen also has a coal bed methane project in the United Kingdom and has interests in other domestic and international areas.

Gas pipeline route from Alberta to Lower 48 shaping up

While the northern route Alaska gas will take to Alberta continues to be vigorously debated, the final connection to the Lower 48 is now starting to get some attention.

And the consortium of North Slope producers -- ExxonMobil, BP and Phillips -- is leaning towards a multi-billion system parallel to the recently-opened C$4.7 billion Alliance line from northeastern British Columbia, through Alberta and Saskatchewan to the Chicago hub.

North American Natural Gas Pipeline Group project manager John Carruthers put the topic on the table at a recent Calgary conference.

“Chicago would be the logical market for the Lower 48 states and it’s logical to follow the (1,800-mile) Alliance right-of-way,” he said. “Alliance is pretty much a straight line from Alberta to Chicago.”

Carruthers said his consortium is opening discussions with Alliance regarding pipeline use and right-of-way.

“We need to consider excess pipeline capacity today. Over time that capacity may be fully utilized. We need to look at expansion opportunities and compare them to a greenfield pipeline,” he said.

He said that a new line would be twice the size of Alliance, which is rated at 1.325 billion cubic feet per day, but reached a record 1.65 billion cubic feet per day in March, 25 percent above contracted volumes.

A spokesman for Alliance said there are no immediate expansion plans, although 600 million to 800 million cubic feet per day could be added relatively cheaply.

However, Carruthers noted that preliminary evaluations -- which have yet to determine costs -- point to a 48-inch diameter pipeline from the North Slope to Alberta, carrying 3 billion to 5 billion cubic feet per day under 2,500 pounds per square inch of pressure.


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