June 5, 2006

Deer Creek Energy probes cause of steam release at Joslyn SAGD project

CALGARY, ALTA-An investigation is in progress to determine the cause of a release of steam at Deer Creek Energy's Joslyn SAGD (steam assisted gravity drainage) oil sands project, 60 kilometres north of Fort McMurray. The incident occurred early in the morning of May 18, unsettling the ground and trees over a distance of approximately 100 metres. Steam was released into the atmosphere for approximately five minutes. No injuries occurred as a result of this incident and there is no indication that any harmful emissions were released either into the atmosphere or nearby waterways. The affected pair of wells, both the injection and producing well, was immediately shut down, as were two adjoining well pairs as a further precautionary measure. Steam circulation in the remaining well pairs of the SAGD Phase II project have continued, although pressures have been reduced. Deer Creek Energy immediately reported the incident to all required regulatory agencies.

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