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NEWS BULLETIN

June 21, 2001 --- Vol. 7, No. 71June 2001

Anderson Exploration plans to drill Beaufort and Yukon

Anderson Exploration, the largest holder of exploration leases on the Mackenzie Delta, will drill two wells this coming winter on the joint license it holds with Petro-Canada, said chairman and chief executive officer J.C. Anderson.

In addition, the Calgary-based company plans a C$72 million three-dimensional seismic program covering 1,600 square kilometers of its 100 percent owned offshore shallow water property in the Beaufort Sea.

Another 480 square kilometers of 3-D seismic will be shot in the region next year.

Anderson said he is confident a major discovery will be announced next year "because we know there is a gas field there."

An Imperial Oil well drilled in the area in 1986 tested at an average 20 million cubic feet per day from each of 10 zones.

Anderson said the company also plans to drill up to two wells in the Yukon's Eagle Plain basin, where it holds three exploration licenses.

He said 275 kilometers of two-dimensional seismic was shot last winter and another 275 kilometers will be added this winter.

At least 1 trillion cubic feet of reserves would be needed to make a stand-alone project commercially viable, Anderson said.

Point Thomson owners want flexibility for either oil or gas production

The major working interest owners at Point Thomson (ExxonMobil, BP and Chevron) have told the state they are not willing to commit to sustained commercial production by 2008, because they want "the flexibility to either independently develop Point Thomson for gas cycling, while maintaining the ability to sell gas at a later date, or provide for early gas sales should that be the most advantageous development option for both the state and the owners."

The state proposed "sustained commercial production by 2008" in a May 1 response to an expansion-contraction proposal by the owners. In a June 19 response, the owners told the state they want to "unambiguously demonstrate our commitment to the development" of Point Thomson, and will pursue an expedited permitting process and accelerate the start of preliminary engineering.

These work commitments, the owners said, "will require an estimated expenditure of $35 million over the period September 2001 to September 2003." In addition, the owners would drill a Thomson sand appraisal well or deepen the Red Dog well in the winter of 2002-2003, for an estimated total of $50 million to be sent over the two years beginning this September.

The owners would also commit "to begin continuous development drilling by mid-2006, estimated to cost in excess of $300 million," if preliminary engineering confirms that the project that is commercial and "should we be successful in receiving permits that do not contain stipulations that are prohibitive."

The owners said they have agreed with the state to have an understanding of terms in place by June 30, with a final decision by the state no later that July 31, "so as to ensure that no proposed expansion leases expire prior to a final decision on expansion." An 18th plan of development will be submitted by July 16.

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