Oil Patch Insider

Excuse us TransCanada, see what we’ve got; Dittman poll shows support for Pebble; Justice done — eventually

Talk about bragging rights!

It doesn’t come much better than this for Canadian pipeline powerhouse Enbridge.

The company has just collected a “governance award” from the Canadian Coalition for Good Governance based on disclosure in its annual shareholder proxy circular.

The coalition, an umbrella group for 50 of Canada’s largest institutional investors with C$975 billion of combined assets under management, created the award last year to recognize excellent disclosure of director information, including reporting the amount and type of compensation paid to directors as well as their biographies, continuing education achievements, qualifications and share ownership stakes.

It said Enbridge topped the list for disclosure of director biographies, independence standards and its share reinvestment program.

Enbridge has refrained from trumpeting the accolade, but you can bet there is a nice warm feeling in its high-rise head office in downtown Calgary as it looks across the road to archrival TransCanada.

To be fair, Canada’s largest pipeline company landed an honorable mention from the coalition.

But also-rans aren’t much consolation at any level as the two giants lock horns on many fronts, notably who will get the rights if ever an Alaska gas line crosses Canadian territory and who will seize the big prizes in the delivery of oil sands production to the United States.

It was doubly satisfying for Enbridge, which rose from an honorable mention at last year’s ceremony, to topple Canadian independent Nexen from the top perch.

But there was comfort for both pipeline companies in the praise of coalition Chairman Doug Pearce who, in describing disclosure as the window shareholders have into the boardroom, said the “best practices of these companies should become the standards for other companies to aim for.”

He said the award goes to companies that “are the best in the communication of director information to shareholders.”

—Gary Park

Poll shows 45-80% levels of support for Pebble mine among Alaskans

Conducted by Dittman Research & Communications, the survey was sponsored by Northern Dynasty Mines, operator of the proposed Bristol Bay area mine, and involved 509 people over the age of 18 in 64 communities throughout Alaska.

The purpose of the survey, Dittman Research said, was to find out what Alaskans think about the proposed mine in the Bristol Bay area.

Seventy-one percent of the people polled had heard about the project. Thirty-one percent were opposed to it; 24 percent were unsure; 45 percent supported it.

According to Dittman Research the “survey went on to measure the effects of additional detailed information, presenting both potentially positive as well as some potentially negative characteristics of the project.”

As a result, most of people who were unsure about the proposed mine changed their vote to one of “likely support” for it, increasing the total percentage of supporting votes to 67 percent and dropping the opposition to 27 percent.

Six percent of those polled remained unsure about the project, Dittman said.

When surveyors told the unsure group that the Pebble Mine Project would “provide 2,000 jobs during operation,” the percentage of “more likely to support” jumped to 78 percent, Dittman said, with just 16 percent “less likely to support” Pebble.

When surveyors told the people in the unsure group that the mine would “use the most up-to-date scientific methods to minimize the disturbance to the environment,” the “more likely” support group increased to 80 percent, with just 15 percent “less likely” to support the project, and five percent remaining unsure.

—Petroleum News

Justice done — eventually

Not that the case lacked a winner.

Murphy Oil and its partner Apache Canada were awarded C$27 million and property in a case of alleged espionage that stretched back six years.

Justice Rosemary Nation, of Alberta Court of Queen’s Bench, supported the claims of the two U.S. independents, who filed a claim against Predator Corp., accusing the little-known Calgary company of employing confidential data and trade secrets to gain control of lands near the once-prolific Ladyfern natural gas discovery in northeastern British Columbia.

Under the 46-page judgment, Predator was also ordered to hand over its final 25 percent stake in the B.C. properties it acquired, plus revenues held in trust since 2001.

The lawsuit was set rolling with Murphy and Apache suing Predator for C$100 million and Predator countersuing for C$6 billion (an amount that the courts later reduced to C$300 million before Nation dismissed the action altogether).

The plaintiffs alleged that Predator trespassed on their lands and stole discovery well data, using that information to outbid them at a later British Columbia land sale, as well as obtaining “highly confidential” information from their contractors on details of the 2000 Ladyfern find.

Murphy attorney Jack Marshall of the Macleod Dixon firm in Calgary described the verdict as an important guide “to what is and what is not acceptable business practice” in the industry.

During the trial, Predator accused Murphy and Apache of launching “Project Pistol,” which it said involved the use of wiretaps and intimidation designed to ruin Predator.

While the legal wrangling dragged on, Ladyfern (the largest find in Canada in 15 years) has been caught up in its own internal disagreement.

Murphy, Apache, Canadian Natural Resources and EnCana could never agree on an appropriate pace of development, resulting in the discovery being depleted at a staggering rate.

It fell from 665 million cubic feet per day in 2002 to 200 million cubic feet per day in mid-2003.

In awarding the five sections of land, Nation estimated the remaining value of gas in the properties at a mere C$7.4 million.

Harvey Doerr, president of Murphy’s Canadian subsidiary, ruefully observed that Ladyfern’s value has largely been realized as the reserves disappeared faster than the lawsuit was settled.

—Gary Park