June 27, 2005

EUB approves plans for Compton gas wells, denies reduced emergency planning zone proposal

The Alberta Energy and Utilities Board (EUB) has concluded that up to six sour gas wells, proposed by Compton Petroleum under its North Okotoks horizontal well program, a scant 4.5 kilometres (km) southeast of the nearest community in Calgary, can be drilled, completed, and operated safely. In its decision (2005-060), following what the company said was the longest well licence hearing in Alberta's history, the EUB determined that the well licences will be issued only if Compton receives the Board's approval of its Emergency Response Plan (ERP), which is currently incomplete. If the company's ERP is approved at a future date, the EUB will issue four of the six well licences at that time.

The EUB hearing, which ran from January 11 to March 4, 2005, considered nine applications by Compton Petroleum to drill six horizontal sour gas wells, construct and operate associated surface facilities, reduce the emergency planning zone (EPZ) to four kilometres (km) with a corresponding emergency awareness zone (EAZ) of eight km, and to implement the associated emergency response plan (ERP). Compton also applied for a special well spacing unit.

In addition to the drilling/completion plans, the EUB approved the surface facilities and the special (reduced) spacing. The Board denied the application for the reduced EPZ, however, and instead determined that an EPZ of 9.7 km--comprising a five-kilometre evacuation zone, and 4.7-km sheltering zone--would be appropriate.

The EUB considered that the sour gas wells, given their hydrogen sulfide (H2S) content of 35.6%, present a potential hazard during drilling, completion, or production operations, but a low level of risk. Moreover, the proximity of the proposed location of the applied-for wells to densely populated areas led the EUB to adopt a particularly cautious approach with respect to questions about public safety.

The Board notes that Compton has acknowledged that its ERP is incomplete, due to the fact that the EPZ has not been finalized. The decision found that the ERP for the reduced four-kilometre EPZ proposed by the company lacked sufficient detail, and the EUB has directed Compton to resubmit its ERP with the improvements recommended by the Board included.

The decision also states that Compton's ERP must incorporate a unified command approach with the municipalities and the Calgary Health Region for public protection measures within and beyond the EPZ. One of the EUB's conditions requires Compton to complete a major ERP deployment exercise prior to entering the first sour zone.

Compton must also meet 14 further EUB conditions, including one requiring that if the EUB approves Compton's well and facility licence applications, the wells and surface facility must be abandoned and removed 15 years from the date of the first well license approval or July 1, 2021, whichever is earlier.

The EUB has established a timetable for Compton to comply with conditions set forth in the decision. By the first deadline, August 15, 2005, the company must indicate to the Board whether it intends to pursue approval of its applications in accordance with the terms of the decision. If Compton decides not to do so, or if the EUB has received no response, it will consider the applications withdrawn and will close its files. If the company proceeds, it must file a complete, revised ERP by November 1, 2005, following appropriate consultation with stakeholders.

The EUB decision on Compton's North Okotoks drilling program may be viewed on the EUB Web site, www.eub.ca. More information is also available from Bob Curran at the EUB, 403/297-3392, FAX 403/297-3757, E-mail bob.curran@gov.ab.ca, or from DC Longfield, vice-president, special projects at Compton, 403/237-9400, FAX 403/237-9410, Web site www.comptonpetroleum.com.

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