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NEWS BULLETIN

March 09, 2001 --- Vol. 7, No. 29March 2001

Arctic leaders seek peace in pipeline rivalry, but make no major concessions

Leaders of Alaska, the Yukon and Northwest Territories have reached a tentative truce in the Arctic gasline battle without shifting much from their long-held positions. Alaska Gov. Tony Knowles, Yukon Premier Pat Duncan and Northwest Territories Premier Stephen Kakfwi told a reporters at an Arctic gas symposium here March 8 they want to work together to achieve maximum and mutual economic benefits from a pipeline.

"Politically, we'd like to agree to support each other ... there is no difficulty with that," said Kakfwi, whose campaigning for a Mackenzie Valley route has put him at odds with lobbying by Knowles and Duncan for an Alaska Highway pipeline.

Kakfwi, who met Knowles for the first time, said it has become apparent "those of us who live in the North would be wise to start talking to each other more often."

Duncan reiterated her public stance that "this is not a competition, this is not Yukon versus the Northwest Territories," while Knowles said development of North Slope and Mackenzie Delta gas should be "viewed as mutually beneficial."

While agreeing to further meetings and sharing information, Duncan was equally adamant that her government "remains resolute in its support for the Alaska Highway project," which she wants to proceed first "because it can meet the needs of the market sooner."

Knowles called for the three leaders to work together "so the producers can't pit us against each other." He said his vision encompasses "two pipelines, with one goal: a stronger, more prosperous North, supplying North America's energy needs."

But he insisted that the projected demand for gas "shows that two pipelines are both feasible and should be built."

Kakfwi said he fears that unless two pipelines are built simultaneously, Delta gas reserves will be uneconomic to develop and get shut in indefinitely. He said 50 U.S. state governors have endorsed the Alaska Highway pipeline, while the Canadian government has remained silent. "We need the government to take a position so Alaska gas isn't the priority here," Kakfwi said. "They could at least say they support Canadian gas getting to market."

A spokesman for Canada's Natural Resources Minister Ralph Goodale said the government will "not express any sort of opinion" to avoid being accused of trying to influence decision-making by the National Energy Board, Canada's energy regulator.

The three leaders ducked commenting at length on the other Arctic energy hotspot the Arctic National Wildlife Refuge.

Knowles said exploration and the environment don't have to be mutually exclusive, but Duncan and Kakfwi endorsed the Canadian government's strong opposition to drilling on a portion of ANWR.

Cross Timbers stock reaches record high

Shares of Cross Timbers Oil Co. closed at a new high of $29.85 March 8 as independent analysts confirmed proved Dec. 31 oil and gas reserves at a record 2.25 trillion cubic feet of gas equivalent, up 11 percent from December 1999. Its shares have gained 289.2 percent over the past 12 months.

The year-end reserve numbers do not include the effect of add-on acquisitions completed in 2001, primarily in East Texas.

"The strength of our technical team and legacy asset base is once again highlighted by our outstanding performance in both reserve replacement and all-in finding cost," said Steffen Palko, vice chairman and president.

"At 2.5 TCF, and growing towards 3 TCF by year-end 2002, the company is rapidly increasing its powerhouse position in the domestic natural gas business," said Bob Simpson, chairman and CEO.

Takeover speculation might account for some of the increase. Shell Oil Co.'s surprise offer of $55 a share for Barrett Resources March 7 sent perceived natural gas takeover prospects higher. Anadarko Petroleum rose to $70.65 per share, approaching its 52-week high of $75.95. Cross Timbers stock was up $3.10 over the March 6 opening price.

Cross Timbers is 100 percent working interest owner and operator of two state oil and gas leases and the "A" and "C" platforms at Middle Ground Shoal field in Cook Inlet.

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