February 13, 2006

Wellhead explosion found to be cause of Celtic Exploration blowout

An investigation by the Alberta Energy and Utilities Board (EUB) into the Celtic Exploration sour oil well explosion and blowout has found the cause to be an explosion at the wellhead during a routine well completion operation. The results of the probe have led the EUB to issue a new directive relating to explosion prevention measures.

The August 9, 2005 explosion near Brooks, Alberta was caused by the ignition of a mixture of hydrocarbons and air. Well control experts secured the well on August 10, 2005.

In addition to investigating the cause of the blowout, the EUB examined the company's response to the incident. It found specific elements of Celtic Exploration's corporate emergency response plan (ERP) to be deficient in the area of communicating with public and municipal agencies in a timely and accurate manner.

Accordingly, the EUB has instructed the company to review its corporate ERP in all of its operating fields and to conduct annual exercises of the revised plans and procedures. The EUB will attend and observe the initial revised response plan exercise. Drilling and servicing consultants are also required to attend the annual exercises.

The new EUB Directive 033: Well Servicing and Completions Operations - Interim Requirements Regarding the Potential for Explosive Mixtures and Ignition in Wells implements new regulatory requirements related to explosion prevention measures.

Although the explosion resulted in the death of a worker, the incident posed no risk at any time to public safety. Sour gas content of the oil well was less than half of one per cent, and continuing air monitoring during the incident showed emissions did not exceed Alberta Ambient Air Quality guidelines. Area residents were temporarily evacuated by the company and RCMP as a precautionary measure.

More information is available on the EUB Web site, www.eub.gov.ab.ca.

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