Apex Resources Group Inc. (OTCBB APXR): is a development stage company. It was incorporated under the laws of the State of Utah on January 27, 1984. The Registrant was initially organized primarily to hold overriding royalties of both producing and non-producing oil and gas properties. However, the Company's articles of incorporation authorize it to engage in all aspects of the oil and gas business and for any other lawful purpose. Website: http://www.ambraresources.com/
Ottawa releases terms of possible participation in Mackenzie Gas pipeline Bob Weber - Canadian Press - Friday, November 18, 2005
(CP) - Days before Imperial Oil (TSX:IMO) is expected to announce its plans for proceeding with the Mackenzie Valley gas pipeline, the company says the federal government has answered one of its two main concerns about the project.
A letter from Deputy Prime Minister Anne McLellan to Imperial vice-president Randy Broiles, released Thursday, has eased the proponent's worries about the pipeline's fiscal framework, said company spokesman Pius Rolheiser.
"Our concerns on fiscal terms have been largely addressed," he said. "We've certainly been encouraged by this development."
In the letter, McLellan lays out several options for Ottawa to improve the project's economics and ensure it goes ahead.
"Given the broad benefits of the project for all Canadians, and residents of the Northwest Territories in particular, and taking into account Canada's financial interests in the potential royalty revenues from this resource, the Government of Canada is prepared to consider supporting the (pipeline) on terms that Canada considers commercially reasonable," she writes in the letter released Thursday.
"The Government of Canada has also committed to work with you with respect to your request for fiscal enhancements."
Options under consideration include lower royalty rates during the first years of the project and higher rates down the road; taking payment in gas instead of cash and investment in one or more components of the project.
The letter also reassures Imperial over access to the land over which the pipeline would run.
"The Government of Canada believes that it would be in the public interest that no party should impede the timely access to land required for the project to proceed," it says.
Although communities in one section of the pipeline's route have begun voting on access and benefits agreements, three other sections continue to negotiate. In addition, the Deh Cho region in the southwestern N.W.T. hasn't even signalled its approval of the pipeline.
McLellan also says Ottawa will consider guaranteeing a loan allowing aboriginal groups to take a one-third share in the project.
"I can assure you that the Government of Canada will continue to give this issue serious consideration," she writes.
Although the project proponents have asked for $1.2 billion worth of "enhancements," McLellan ruled out any kind of direct payments.
Outside the House of Commons, McLellan emphasized any federal moves had to make business sense.
"We are willing to consider the request for fiscal enhancement but anything that we do has to be commercially viable and anything we do cannot be a subsidy," she said.
McLellan also sunk the idea of aboriginal governments collecting property tax on the pipeline.
Thursday's developments were widely welcomed.
"This is a major step forward for the project," said N.W.T. Industry Minister Brendan Bell. "The willingness to say this project is important for Canada - not only northerners but all Canadians, that's the monumental aspect of what's gone on here today."
Clive Mather, president and chief executive of Shell Canada (TSX:SHC), which also has a stake in the project, expressed optimism.
"I am a supporter of this project, I'm very clear about that," said Mather, who's company has set aside $45 million to move the pipeline through the regulatory process.
"We have made provision in the budget on the assumption that this project will go ahead."
It's been a good week for the pipeline proponents.
When Imperial announced last spring it was cancelling preparatory work on the pipeline, it cited uncertainty over fiscal terms and the lack of progress negotiating access and benefits agreements as the reason.
On Wednesday, the first four communities along the route began voting on access and benefits agreements. With Thursday's letter, the fiscal concern has also been removed.
On Friday, Imperial was expected to tell regulators whether it's ready for public hearings on the project so the National Energy Board could go ahead with a scheduled planning conference.
However, in a letter to the board on Thursday, the company asked for an extension until Nov. 23.
Northwest Territories premier says Alaska gas line not competition Canadian Press - Friday, November 18, 2005
ANCHORAGE, Alaska (AP) - The premier of the Northwest Territories said public hearings on a Mackenzie Valley natural gas pipeline could begin as soon as January, inching the $8-billion construction project closer to a 2008 start date.
Premier Joseph Handley said Thursday he hoped negotiations with Imperial Gas, one of several companies interested in the line, could be concluded within the next few days. "Work is progressing well," Handley said.
"It is clear that the economy of the Northwest Territories will be powered over the long term by the production of natural gas."
Handley has said the pipeline could be operating by 2010.
The Mackenzie line is not racing with Alaska's proposed $20-billion North Slope natural gas line, he said.
But he said because Alaska's project is much larger, the Mackenzie line would "fall behind" if development were delayed.
"I know there's a connection in people's minds but I don't see us as competitors," Handley said.
Like neighbouring Alaska, the Northwest Territories has sought for decades to bring its natural gas to market. Active drilling in the Mackenzie River delta, along the Arctic Ocean coast, slowed after the federal government recommended no development more than 30 years ago, in part because aboriginal lands claims were not settled.
Now that most claims are resolved, Handley said, interest has renewed in a roughly 1,000-kilometre line slicing through virgin lands and connecting with an existing gas pipeline at Fort Saskatchewan. From there, natural gas would be delivered to a pipeline hub in Alberta for sale to the United States and eastern Canada.
Handley, who is part-Cree, also announced Thursday aboriginal groups had secured a minimum one-third equity interest in the proposed line along with $68 million financing from TransCanada Pipelines.
The agreement is "precedent-setting," the premier said.
"Its importance to the Northwest Territories will transcend the construction of the pipeline," he said.
Handley spoke in Anchorage at a conference organized by the Resource Development Council.
Covering more than one million square kilometres, the Northwest Territories is home to roughly 45,000 people, one-half of whom are aboriginal. Mining, government and tourism are key employers. Besides Ontario-based Imperial, a subsidiary of Exxon Mobil, producers eyeing the Mackenzie Valley project include Conoco, Shell, Exxon and several smaller companies.
A logger's son from northern Saskatchewan, Handley is the Territories' former finance minister and today lives outside of Yellowknife in a home where he must generate his own power.
"I'm fascinated by the opportunities and change in the Northwest Territories," he said.
"I'm not interested in maintaining things. The biggest project in Canada is the Mackenzie Valley pipeline."
In a prepared statement Thursday, Deputy Prime Minister Anne McLellan said the federal government would not subsidize the gas line but would consider assuming a greater share of the project's risks if it were able to increase its share in potential financial rewards.
Eyes on aboriginals on eve of Imperial's Mackenzie pipeline hearing decision Bob Weber - Canadian Press - Tuesday, November 22, 2005
(CP) - Imperial Oil says land deals with aboriginals are front and centre on the eve of its decision whether to move forward with a $7-billion Mackenzie Valley pipeline proposal.
"The key remaining issue that still needs to be resolved is negotiations on access and benefits agreements," Imperial (TSX:IMO) spokesman Pius Rolheiser said Tuesday.
But at least one aboriginal leader said all the deals won't be signed until Ottawa stops worrying about a federal election long enough to make progress on self-government and land claims.
"We're willing to come on board, but there's still some issues here that need to move forward," said Grand Chief Herb Norwegian of the Deh Cho First Nation, which claims land that accounts for about 40 per cent of the pipeline's planned route.
"They're just too worried about the damned political curtains dropping in Ottawa and everybody scrambling for an election."
Imperial has told the National Energy Board that it will announce Wednesday if it's ready for public hearings on the project.
Analyst Wilf Gobert at Peters & Co. in Calgary expects a "yes."
"It would be a shock for them to say, 'We're not ready to proceed,' " he said.
Further delay might give the rival Alaska Highway project higher priority for gas producers, Gobert added. That project would connect gas fields along Alaska's North Slope to southern markets via a route that would follow the highway.
If Imperial decides to proceed, it would be the first major step forward since the company stopped preparatory work on the project last spring.
That work was stalled over Imperial's concerns about royalties and taxation, the regulatory process and deals with aboriginals on land access.
Since then, moves by the federal government have removed the first two obstacles, said Rolheiser. Those include a letter last week from Deputy Prime Minister Anne McLellan suggesting fiscal terms under which Ottawa proposes to work with the proponents.
That has left all eyes on Imperial's high-stakes talks with the four main aboriginal groups along the pipeline's projected route.
"It's fair to say that we have seen significant progress on both the regulatory and fiscal fronts," said Rolheiser. "You can draw your own conclusions from that."
Most aboriginal negotiators have been close-mouthed about the talks, except to say deals are close.
The four main communities in the Sahtu region west of Great Bear Lake have already discussed a proposed agreement.
Nellie Cournoyea, head of the Inuvialuit Regional Corp. in the northwest corner of the Northwest Territories, has said talks are almost complete.
Norwegian said his negotiators are talking with Imperial. But an access and benefits deal has become tangled up with talks over the Deh Cho's comprehensive land claim.
"Imperial Oil is telling our guys at the ground level that the only time they'll be able to enter into access and benefits agreements is if Canada actually gives Imperial Oil a letter saying that, yes, Canada recognizes the Deh Cho having treaty and aboriginal rights."
"That's ludicrous. It's not up to Canada to give us those rights. We presently enjoy them."
Rolheiser has said Imperial doesn't need signed agreements to proceed to hearings. Significant progress would do.
But Norwegian said political uncertainty in Ottawa is blocking even that.
"You don't know who the hell you're dealing with. They're flip-flopping. They're scrambling over each other. It's one messy ordeal."
Rolheiser tried to play down the significance of Wednesday's announcement.
"It's not going to be a green light to the project or a halt to the project," he said.
"If we indicate that we're not ready (for the hearings), that is not a shelving of the project. It may just be an indication we're not ready yet and we need more time."
Gobert agreed.
"This just gets the train rolling out of the yard, it doesn't get them to the destination. But you've got to start somewhere and it starts with getting it moving through the regulatory process."
The pipeline's significance to the N.W.T. - and Canadian - economy is significant.
Estimates of its contribution to the national GDP range up to $59 billion. The federal government stands to take in anywhere from $6 billion to $13 billion.
N.W.T. Industry Minister Brendan Bell said the project would open up the whole Mackenzie Valley to energy exploration, bringing jobs and revenue for decades to come.
"Once you have this conduit to get gas to market, we're going to open up this basin," he said.
Apex Reports Revised Value Estimates for Beaufort Sea Well 11/23/2005 6:00:32 AM
SALT LAKE CITY, Nov 23, 2005 /PRNewswire-FirstCall via COMTEX/ -- Apex Resources Group Inc. (APXR), today reports revised value estimates for Beaufort Sea Well.
On October 25, 2005 Citadel Engineering of Calgary released the report to reflect the current gas and oil prices. In June 1997, Apex Resources Group purchased a 3.745% working interest in the Beaufort Sea Area known as the Itiyok 1-27 Well, which was drilled in 1983. A review of the well data and geological prognosis indicates that a 640 acre area would contain proven recoverable gas reserves of 108 Bscf and proven recoverable oil reserves of 8,976 MSTB working interest net reserves of 4.04 Bscf and 336 MSTB. Seismic data indicates a structure closure of approximately 40 square KM with a gross potential reserve of 1.16 TCF and 160 MMSTB (working interest net -- 34 Bscf and 4.7 MMSTB). The lands in which the Apex Resources Group Inc. owns an interest comprise of 21.54 square KM containing gross potential reserves of 625 Bscf of gas and 86 MMSTB of oil (working interest 23.4 Bscf of gas and 3.2 MMSTB of oil).
With oil at approximately US$58.68 per barrel and gas close to US$11.50 per cubic feet, Apex interest in proven reserves would be $66.176 Million US Dollars and with an additional potential to be drilled out would represent $1.189 Billion US Dollars.
This will be a tremendous asset to Apex if and when the Mackenzie Valley Pipeline is completed.
The following proven, probable and possible gas and oil reserves are taken from the Engineering report.
Without a decision on the pipeline Apex 3.745% of the Itiyok I-27 Well is reduced at US $2,895,000 for proven reserves. After a decision to move forward with the pipeline this value will increase significantly.
Itiyok I-27
Part 1 -- Proven Gas & Oil Reserves: (640 acre area)
Total: -- A) 108 Bscf - Gas B) 8.976 MM STB - Oil
Apex Working Interest - (3.745%)
A) 4.04 Bscf - Gas @ US$11.50/ft3 = US $46.46 Million (Gas) B) 336,000 STB - Oil @ US$58.68/B = US$19.716 Million (Oil) US$66.176 Million (Gas & Oil)
Part 2 -- Probable Gas & Oil Reserves: (40KM2)
Total: -- A) 1.16 TCF - Gas B) 160 MM STB - Oil
Apex Working Interest - (3.745%)
A) 34 Bscf - Gas @ US$11.50/ft3 = US$391.000 Million (Gas) B) 4.7 MM STB - Oil @ US58.68/B = US$275.796 Million (Oil) US$666.796 Million (Gas & Oil)
Part 3 -- Possible Gas & Oil Reserves: (21.54 KM2)
Total: -- A) 625 Bscf - Gas B) 86 MM STB - Oil
Apex Working Interest - (3.745%)
A) 23.4 Bscf - Gas @ US$11.50/ft3 = US$269.100 Million (Gas) B) 3.2 MM STB - Oil @ US58.68/B = US$187.776 Million (Oil) US$456.876 Million(Gas & Oil)
Total of All 3 US $1.189 Billion Gas & Oil
About The Mackenzie Valley Pipeline
Reports out of Calgary indicate that the consortium behind the CDN$7-Billion Mackenzie gas pipeline are on the verge of making deals with Ottawa and aboriginal communities, paving the way for key public hearings to begin on the massive venture.
After months of negotiations, a consortium of oil companies headed by Imperial Oil Ltd. was close yesterday to finalizing a so-called "letter of comfort" with the federal government that would lay out fiscal terms for the project in broad terms, sources said.
Three aboriginal communities along the pipeline route were scheduled to hold meetings last week to ratify access and benefits agreements.
"I am very optimistic that things seem to be coming together," said Brendan Bell, Energy Minister for the Northwest Territories, after meeting with Cabinet ministers in Ottawa. "We are very hopeful that Imperial will come out with a very strong positive announcement in the coming days and weeks."
The consortium of Imperial Oil Ltd., and partners Shell Canada Ltd., ConocoPhillips and the Aboriginal Pipeline Group, wanted to secure the deals before moving forward with lengthy public hearings that would bring the project back on track.
Negotiators have been working frantically so the agreements could be in place tomorrow, allowing Imperial to meet a deadline imposed by the National Energy Board. The federal regulator asked project backers to let it know by Nov. 18 whether they were ready to move forward, so it could hold pre-hearing conferences before the end of the year. Eight to ten months of hearings would then start in the New Year in of locations across the Northwest Territories and in Alberta. Regulators would then rule on whether the project can proceed.
The 1,220-kilometer pipeline would move to market by the turn of the decade badly needed natural in the Mackenzie Delta and fuel oil and gas in Canada's Arctic.
Three Sahtu communities -- Tulita, Fort Good Hope and Deline -- have reached agreements with Imperial on allowing the oil companies access to their lands in exchange for benefits. Negotiations are continuing with other groups affected by the project -- the Inuvialuit, Gwich'in and Deh Cho.
Pius Rolheiser, spokesman for Imperial, said it was premature to say whether backers would move forward with public hearings without having all aboriginal agreements in place.
"Our intent would be to have benefits and access agreements in place or a clear path forward to achieving them," he said. "We are in discussions with all communities and we are working as hard as we can."
The potential is significant. Devon Energy Corp. next month will start drilling in the Beaufort Sea and hopes to hit a target as large as the biggest field in the nearby Mackenzie Delta, a discovery controlled by Imperial.
By the Board of Directors,
APEX RESOURCES GROUP INC. Investor Relations: Roger Reynolds 136 East South Temple, Suite 1600 Salt Lake City, Utah 84111 USA TEL: 801.363.2599
Meanwhile, back at the APXR O&G Ranch...........................
Imperial Oil moves forward with public hearings on Mackenzie pipeline project
Canadian Press - Wednesday, November 23, 2005
CALGARY (CP) - After months of delay and uncertainty, Imperial Oil says its $7-billion Mackenzie Valley pipeline project is ready to move to public hearings.
That doesn't necessarily mean pipeline construction will go ahead.
But the decision marks the project's first real step forward since Imperial cancelled preparatory work last spring.
The announcement in Calgary follows months of talks between the company, federal and aboriginal officials.
Ottawa has given proponents assurances on a fiscal and royalty structure.
And talks with aboriginals in the region have resulted in enough progress for the company to proceed.
Imperial (TSX:IMO) officials have played down the significance of the decision, calling it just one more part of the regulatory process.
But the company has said a letter from Deputy Prime Minister Anne McLellan last week gave them what they need to make the project economically viable.
The letter spelled out the terms under which Ottawa will work with the proponents to reduce their risk and was the latest in a series of federal efforts to get the stalled project rolling again.
The terms include a 10-year, $500-million funding pledge for communities along the proposed 1,220-kilometre route to deal with social impacts, as well as a $31.5-million out-of-court settlement for a lawsuit brought by the Deh Cho First Nation.
The Deh Cho, however, are still not on board with the project.
But three other aboriginal groups in the Northwest Territories are members of the Aboriginal Pipeline Group, which intends to take a one-third ownership share.
Those three groups - the Inuvialuit in the territory's northwest corner, the Gwich'In to the south and the Sahtu east of Great Bear Lake - are said to be close to signing agreements on how pipeline crews will gain access to the land and how local communities will benefit.
The Deh Cho, who claim land amounting to 40 per cent of the pipeline's route, are also negotiating a comprehensive land claim with the federal government. Those talks have complicated their dealings with Imperial.
The National Energy Board has planned a conference in early December to prepare for hearings, which could begin by mid-January.
Meanwhile, back at the APXR O&G Ranch...........................
Imperial Oil moves forward with public hearings on Mackenzie pipeline project
Canadian Press - Wednesday, November 23, 2005
CALGARY (CP) - After months of delay and uncertainty, Imperial Oil says its $7-billion Mackenzie Valley pipeline project is ready to move to public hearings.
That doesn't necessarily mean pipeline construction will go ahead.
But the decision marks the project's first real step forward since Imperial cancelled preparatory work last spring.
The announcement in Calgary follows months of talks between the company, federal and aboriginal officials.
Ottawa has given proponents assurances on a fiscal and royalty structure.
And talks with aboriginals in the region have resulted in enough progress for the company to proceed.
Imperial (TSX:IMO) officials have played down the significance of the decision, calling it just one more part of the regulatory process.
But the company has said a letter from Deputy Prime Minister Anne McLellan last week gave them what they need to make the project economically viable.
The letter spelled out the terms under which Ottawa will work with the proponents to reduce their risk and was the latest in a series of federal efforts to get the stalled project rolling again.
The terms include a 10-year, $500-million funding pledge for communities along the proposed 1,220-kilometre route to deal with social impacts, as well as a $31.5-million out-of-court settlement for a lawsuit brought by the Deh Cho First Nation.
The Deh Cho, however, are still not on board with the project.
But three other aboriginal groups in the Northwest Territories are members of the Aboriginal Pipeline Group, which intends to take a one-third ownership share.
Those three groups - the Inuvialuit in the territory's northwest corner, the Gwich'In to the south and the Sahtu east of Great Bear Lake - are said to be close to signing agreements on how pipeline crews will gain access to the land and how local communities will benefit.
The Deh Cho, who claim land amounting to 40 per cent of the pipeline's route, are also negotiating a comprehensive land claim with the federal government. Those talks have complicated their dealings with Imperial.
The National Energy Board has planned a conference in early December to prepare for hearings, which could begin by mid-January.
VANCOUVER, British Columbia (Reuters) - Political leaders in Canada's far north have revived calls to build a permanent road to the country's Arctic coast to develop the region's huge energy and mineral resources.
The building the Mackenzie Valley Highway would cost about C$700 million, but could be partly paid for with tolls or fees on oil and natural gas development, according to a report released this week by the Northwest Territories government.
The report said the time was right for Canada to revive a long-stalled plan for the all-weather road that would eventually link the Arctic port of Tuktoyaktuk, N.W.T., with the territory's existing road system more than 800 km (500 miles) to the south.
"The political and economic difficulties that impeded the completion of the Mackenzie Valley Highway over three decades ago have improved," Premier Joseph Handley and Transportation Minister Michael McLeod said in the proposal's introduction.
It would replace the existing "winter roads" that have trucks drive on ice-covered rivers and frozen ground during that season to deliver freight -- a system the report's authors warned was threatened by global warming.
"The existing limited transportation window makes development and exploration activities expensive and inefficient," the report said.
The plan links the road's construction to the proposed development of natural gas in the Mackenzie Valley on the Beaufort Sea and a C$7 billion, 1,350 km (850 mile) pipeline that would move the gas south to markets in Canada and the United States.
The territory is asking the federal government to issue loan guarantees, and proposes the C$700 million debt be paid off over 35 years. Ottawa would be responsible for 75 percent of the debt, with the territorial government paying 25 percent.
Ottawa proposed a road to the Arctic coast in the late 1950s. Some construction began in 1972 but was stopped in 1977 when a 10 year moratorium was imposed on oil and gas development in the far north.
Territorial officials said the road would also strengthen Canada's claim of control over the Northwest Passage across the top of North America, through Canada's Arctic archipelago.
"A highway to the Arctic would help assert Canadian sovereignty over Canadian Arctic waterways as shipping routes become increasingly accessible," the report said.
Members of the legislature and environmentalists in the N.W.T. say the territory's premier has made promises to the Mackenzie Valley pipeline proponents that will cost the government millions of dollars in lost royalties.
Just before Imperial announced last week it was ready to go to public hearings on the $7 billion pipeline, Handley and Roland sent a "letter of comfort" to the five gas producers promoting the Mackenzie Gas Project.
In it, the N.W.T. government promises that if it takes control of land and resources in the Territories through the devolution process, the government would not increase resource royalties the companies would pay, and had no plans to raise property taxes, relative to other parts of Canada.
Some critics say Joe Handley and his finance minister Floyd Roland bowed to intense pressure from the proponents to make sure the project moved forward.
"We're basically giving away our whole hand here," says Great Slave MLA Bill Braden, who says the premier and finance minister "missed the boat".
"We should've held out for a decent royalty sharing deal, before signing this letter of comfort, giving the pipeline and the gas producerss our assurance that we're not going to do anything at all to make it a better deal for us."
Yellowknife MLA Sandy Lee is also upset MLAs only heard about the letter as it was on its way out to the proponents.
"We are not the first to know, and we don't have a say, or any real input into these negotations, and how a letter like this is written up," she says.
A public policy group in the territory, Alternatives North, says this letter could cost northerners hundreds of millions of dollars in lost royalties, without a word of debate.
Spokesperson Kevin O'Reilly points to Indian and Northern Affairs website, the department currently in charge of northern resources.
"'We have a globally competitive royalty regime'. Just replace the word competitive with low, low or lowest, and we know that those resources are just being given away. And the territorial government has now locked ourselves into that regime nine, 15 years into the future," he says.
"That's just astonishing that they would agree with this at the same time they're complaining about not having any sort of authority or jurisdiction over it – it's quite amazing."
Premier Handley was returning to the capital from Inuvik on Thursday, and couldn't be reached for comment.
Here is a good driver for the MacKenzie Gas Pipeline from the NWT to the USA..:
ExxonMobil, BP, Shell Step Up Natural Gas Exploration in US
AFX News Limited Tuesday, November 29, 2005
The world's three largest energy companies are intensifying their hunt for natural gas in the U.S., reversing a years-long trend, according to a media report Tuesday.
Exxon Mobil Corp. , BP Plc and Royal Dutch Shell Plc have been drawn back to the U.S. by high natural-gas prices, advances in extraction technology and increasing competition for resources abroad, The Wall Street Journal
In the past few months, BP and Exxon have committed to long-term development of U.S. fields they have held for years but haven't given much attention, the Journal reported, while Shell is acquiring new fields to establish larger U.S. natural-gas holdings, according to The Journal.
Big Oil's new interest highlights significant changes in the U.S. onshore energy industry, The Journal reported. In their latest U.S. push, the big oil companies are facing more competition than in the past in regions already crowded with competitors, The Journal said.
And instead of huge crude oil deposits, the majors are homing in on unconventional gas fields, where gas is locked in giant swaths of coal, sandstone or shale, The Journal reported.
Now companies can use new technologies - independents already are using the processes - to crack the rock formations and extract large quantities of gas. Making the economics more compelling is the fact that, unlike oil, the large quantities of gas needed by the fuel-hungry North American market can't be transported from overseas, The Journal noted.
In 2004, Exxon, BP and Shell, spent $6.9 billion on U.S. production, according to John S. Herold, although Gulf of Mexico projects accounted for much of the total. The companies are expected to spend considerably more in 2005 as they move ahead with new projects and exploration costs rise, The Journal said.
The high price of natural gas in the U.S. makes investment in new gas reserves attractive, The Journal said.
In New York, natural gas has been trading well above $10 per million British thermal units since late August, more than quadruple its price at the beginning of the decade. Prices are expected to stay high.
Handley blasts "letter of comfort" critics Last updated Dec 2 2005 03:34 PM CST - CBC News
N.W.T. Premier Joe Handley launched a broadside at his critics Friday, labelling people who say he sold out to the pipeline proponents as "scaremongers".
Handley says the "letter of comfort" he sent to pipeline producers last week didn't tie the territorial government's hands in resource negotiations, nor sold rights to the producers at bargain-basement prices.
"The letter is a letter of assurance that we're not going to do anything goofy here," says Handley.
"That we're going to be responsible and that we're going to continue with a very competitive environment here."
Critics said earlier this week that the letter of comfort Handley and Finance Minister Floyd Roland wrote on Nov. 22 would limit the revenues the government could collect off the pipeline and gas fields for up to 15 years. They wondered why the government would make such assurances when talks for the transfer of resources from Ottawa to the N.W.T. are still underway.
Several MLAs were also angry they were only briefed about the letter's contents as it was being sent to Imperial Oil, the chief pipeline proponent.
* FROM DEC. 1, 2005: Critics "astonished" my N.W.T. letter of comfort
Handley questioned the motives of people who criticized the letter.
"There are always people who are going to be consistently against the pipeline, they're going to raise these things, they're going to try to scaremonger," he says. "[Saying] that this is a letter with a bunch of concessions, it isn't. It's a letter of assurance.There are no concessions in it."
Handley says the letter only promises not to raise taxes and royalties on the three anchor gas fields that justify the pipeline.
He said the letter was a necessary guarantee to give to the pipeline proponents to satisfy them their investment of billions of dollars was safe. The day after receiving the letter, Imperial announced it was prepared to hold public hearings on the pipeline early in the new year.
Handley said he had no complaints about the letter from people who actually live along the pipeline route, and in Inuvik "had more people shaking my hands over us coming to the table at this, making a deal."
"It's easy for people in Yellowknife to sit and criticize the pipeline, but they won't do it with things in their own backyard" with the diamond mines, Handley said.
Billions and billions lost?
But many critics remain unbowed.
Petr Cizek, a Yellowknife environmental consultant who's done work for the Dehcho First Nations and Canadian Arctic Resources Committee, says the N.W.T. government has never publicly discussed its options.
He compared Alberta's royalty rates to the N.W.T.'s current rates, and applied them to the gas fields referred to in the letter.
"So we're looking at a loss of about $850 million per year," he says. "Multiply that by 22 years, this letter has just given away billions upon billions of dollars."
The territorial government is currently negotiating with the federal government for control of resource management, and one of the parties to the talks is the Aboriginal Summit.
Its negotiator, Jean-Yves Assiniwi, says that with the letter, the government is breaking its promise to keep the options open once a deal with the federal government is done.
"The GNWT is flying solo, they're ignoring what we're negotiating on a bilateral basis," he says.
"It contradicts what we've agreed to so far."
Assiniwi says what makes it worse is that the N.W.T. government has other sources of revenue, while aboriginal governments have no secure funding systems in place.
The Dehcho MLA, Kevin Menicoche, describes Handley's "compromise" as more of a giveaway.
"It certainly impacts the amount of money that's eligible to the GNWT, and all northern governments, who we maintain are equal in the north," he says.
Another of the premier's legislature critics, Yellowknife MLA Bill Braden, said he now understood why Handley sent the letter he did. But still maintains the territorial government "painted itself into a corner" with the territory's oil and gas revenues for years to come.
Apex Reports Update on Beaufort Sea Well and Mackenzie Valley Pipeline 12/5/2005 6:00:35 AM
SALT LAKE CITY, Dec 05, 2005 /PRNewswire-FirstCall via COMTEX/ -- Apex Resources Group Inc. (APXR), today reports revised value estimates for Beaufort Sea Well.
Apex Resources Group in June 1997, purchased a 3.745% working interest in the Beaufort Sea Area known as the Itiyok 1-27 Well, which was drilled in 1983. A review of the well data and geological prognosis indicates that a 640 acre area would contain proven recoverable gas reserves of 108 Bscf and proven recoverable oil reserves of 8,976 MSTB working interest net reserves of 4.04 Bscf and 336 MSTB. Seismic data indicates a structure closure of approximately 40 square KM with a gross potential reserve of 1.16 TCF and 160 MMSTB (working interest net -- 34 Bscf and 4.7 MMSTB). The lands in which the Apex Resources Group Inc. owns an interest comprise of 21.54 square KM containing gross potential reserves of 625 Bscf of gas and 86 MMSTB of oil (working interest 23.4 Bscf of gas and 3.2 MMSTB of oil).
With oil at approximately US$58.70 per barrel and gas close to US$13.00 per thousand cubic feet, Apex interest in proven reserves would be $72.243 Million US Dollars and with an additional potential to be drilled out would represent $1.282 Billion US Dollars.
This will be a tremendous asset to Apex when the Mackenzie Valley Pipeline is completed.
The following proven, probable and possible gas and oil reserves are taken from an Engineering report update on October 25, 2005 by Citadel Engineering.
Itiyok I-27
Part 1 - Proven Gas & Oil Reserves: (640 acre area)
Total: - A) 108 Bscf- Gas B) 8.976 MM STB - Oil Apex Working Interest - (3.745%) A) 4.04 Bscf - Gas @US$13.00/ft3 = US$52.52 Million (Gas) B) 336,000 STB - Oil @US$58.68/B = US$19.723 Million (Oil) --- US$72.243 Million (Gas & Oil) Part 2 - Probable Gas & Oil Reserves: (40KM2) Total: - A)1.16 TCF - Gas B) 160 MM STB - Oil Apex Working Interest - (3.745%) A) 34 Bscf - Gas @ US$13.00/ ft3 = US$442.000 Million (Gas) B) 4.7 MM STB - Oil @ US58.70/B = US$275.890 Million (Oil) --- US$717.890 Million (Gas & Oil) Part 3 - Possible Gas & Oil Reserves: (21.54 KM2) Total: - A) 625 Bscf - Gas B) 86 MM STB - Oil Apex Working Interest - (3.745%) A) 23.4 Bscf - Gas @US$13.00/ft3 = US$304.200 Million (Gas) B) 3.2 MM STB - Oil @US58.70/B =US$187.840 Million (Oil) --- US$492.040 Million(Gas & Oil) Total of All 3 US $1.282 Billion Gas & Oil
Mackenzie Valley Pipeline Public Hearings to Proceed
In a letter to the National Energy Board, on November 23, Imperial Oil said sufficient progress has been made in a number of key areas to proceed to the formal hearings, which could start in mid-January.
Imperial Senior Vice President Randy Broiles said the progress has been achieved in clarifying the regulatory process, negotiating benefits and land access agreements with aboriginal regions.
A Nov. 18 letter from Deputy Prime Minister Anne McLellan to Imperial provides sufficient confidence that outstanding matters will be addressed.
That letter presented options for fiscal concessions and a possible commercial role for the Canadian government.
It is hoped that recently negotiated benefits and access agreement terms with aboriginal groups will be fully ratified and executed in December.
Reports out of the Northwest Territories suggest the Inuvialuit, Sahtu and Gwich'in are close to signing deals, but the Deh Cho remain a steadfast holdout.
Deh Cho Grand Chief Herb Norwegian has told reporters his region insists on being treated like a government -- and want the right to collect property taxes from the pipeline.
Moving into the hearing phase is not a final decision to proceed with construction.
Imperial Oil and the consortium partners are working on obtaining the necessary approvals and permits, negotiating final benefits and access agreement and fiscal terms.
By the Board of Directors,
APEX RESOURCES GROUP INC. Investor Relations: Roger Reynolds 136 East South Temple, Suite 1600 Salt Lake City, Utah 84111 USA TEL: 801.363.2599 Web Site: http://www.ApexResourcesGroup.com John M. Hickey Director SOURCE Apex Resources Group Inc. John M. Hickey, Director of Apex Resources Group Inc., +1-801-363-2599
APXR - (O&G) - You really need to pay attention to what's happening here..............
(..From the Washington Post..): More progress on the MacKenzie gas pipline..........
A 'Great Pipeline Race' in Canada - Two Plans to Send Natural Gas to U.S. Would Transform Pristine Land
By Doug Struck - Washington Post Foreign Service - Monday, December 5, 2005; Page A01
FORT SIMPSON, A wind prickly with ice bit at Jonas Antoine, the gray-haired native elder. The sting brought a broad grin to his face. "I feel like a wolf in this weather, ready to hunt," he said, leaning against the driving chill.
The cold thrill of sneaking toward a keen-eared moose or snaring a lynx calls him, but Antoine spends days in a stuffy gymnasium, debating with chiefs and elders the looming invader from the north: a huge pipeline from the Arctic that all agree would irrevocably change this land.
Soaring energy prices and profits have revived plans for two massive pipelines -- the biggest private construction projects in North America -- to bring natural gas hundreds of miles south from the frozen Arctic Ocean, through vast untouched forests and under wild rivers, to the United States.
The plans would flood isolated areas of Alaska and Canada with thousands of construction workers, pump billions of dollars into poor native economies, and bring the roar of heavy cranes and bulldozers to pristine areas where it is now quiet enough to hear the hoots of snowy owls and the rustle of pine boughs.
The projects are crucial to keep up with the growing thirst for energy in the United States, say oil company officials and energy analysts. Supporters and opponents agree that the projects would affect Canada's sparsely populated north on a scale larger than the Alaska oil pipeline in the 1970s, and unleash a rush of new exploration and drilling.
"Every square inch is going to be opened to diamonds, sapphires, gold, oil and gas," Michael Miltenberger, the Northwest Territories minister of natural resources, said in an interview in the territories' capital of Yellowknife. "There's an insatiable demand. And the critical first step is the pipeline."
There are daunting obstacles before any construction begins: The two pipeline projects are in competition for workers and capital -- only one can be built at a time. Native groups in Canada have not yet given access rights; environmentalists fret over caribou and the permafrost; and the pipeline companies face a mountain of regulatory red tape and promised lawsuits.
But the huge profits in the energy business, and the unquenchable demand for energy in the United States, have given the projects an impetus that may make one -- or both -- projects unstoppable.
"The time and events are right. It would be very hard to turn your back on this kind of supply," Miltenberger said.
Pipe Dreams No More
Of the two lines, the Alaska Gas Pipeline is the behemoth. Its most likely route would stretch 1,700 miles from Alaska's Prudhoe Bay to Canada's Alberta province. The line would cost $20 billion and take a decade to build, but the project has picked up momentum under the whip of Alaska Gov. Frank H. Murkowski (R) and $18 billion in loan guarantees approved last year by Congress.
The second line, the Mackenzie Valley Pipeline, would start 250 miles east of the Alaska line, on Canada's portion of the Beaufort Sea. It would snake 800 miles through forests of spruce and pine along the Mackenzie River -- one of the world's longest with no bridge or dam. This all-Canada route would cost $6 billion and is predicted to take three years to complete once construction begins.
Both projects have been pipe dreams for three decades. Drillers who flocked to the cold deserts of Alaska's North Slope after oil was discovered in 1968 also found vast deposits of natural gas. But there has been no way to move the gas to markets; it cannot flow in the oil pipeline. Oil producers proposed both the Alaska and Mackenzie gas pipelines in the 1970s, but the plans died under the weight of rising construction costs, dropping natural gas prices and -- in Canada -- opposition from native groups.
That has changed. Natural gas prices are now at all-time highs, greatly enhancing the lure of profits. Every energy forecast shows a yawning gap between supply and the rising demand. More natives of the north now see economic opportunity in the pipelines, and their necessity is reluctantly being conceded by even environmental groups.
"The economics are right. Everyone needs this supply to come on line," said John Duncan, a member of the Canadian Parliament and the Conservative Party's expert on natural resources. "The real question is which is going to be built first."
Industry analysts say the projects would require so much capital, steel and skilled labor that it would be impractical to build both at the same time. The projects have been jostling for position, sparking what former Alberta energy minister Murray Smith has called "the great pipeline race." Oil company officials would prefer the shorter Mackenzie line to go through first, but delays have jeopardized that possibility.
Four reserves of Indians -- known as First Nations here -- are involved in negotiations to permit the Mackenzie line to cross their land. The four oil companies behind the project have agreed to give First Nations a one-third share of the line, and the federal government in July offered $425 million for native social programs as an incentive. But the bands are split over the proposal.
Native Claims
Antoine, 64, is a member of the Deh Cho, a band of about 4,000 members on land centered at Fort Simpson, a quiet town on an island accessible by ferry in the summer and by a road carved on the river ice in the winter.
He grew up hunting caribou and moose, snaring rabbits and cutting holes in the ice to fish in the winter. He remembers a hard life, remembers being hungry when the game disappeared. But he is wary of the coming pipeline, and the change it will bring.
A lone caribou walks across the Dalton Highway near the Trans-Alaska oil pipeline. A lone caribou walks across the Dalton Highway near the Trans-Alaska oil pipeline.(Al Grillo - AL GRILLO PHOTOGRAPHY) "You can still have freedom to roam here. You can travel for 100 miles without running into any other tracks, camping wherever you want, drinking out of any stream," he said of the Deh Cho lands.
Herb Norwegian, the blunt chief of the Deh Cho, said his people see no reason why they should not get what they want from oil companies making huge profits. He has asked for fees, royalties and jobs, but his fundamental demand is of the government, which has yet to settle Deh Cho land claims.
"If the pipeline is going to pass through our land, the government has to treat us like the landlords," Norwegian said.
Not all agree with him. Harry Deneron, 63, a member of the Deh Cho group of chiefs, said change already has come, and the First Nations people should benefit.
"Our people will be the first to complain if their hot-water heater goes up," he said with a laugh. "We should accept the pipeline, with conditions. We have to compromise. This has gone on too long."
Either project would march a small army of construction workers into the north for several years. They would carve roads, haul steel, dig a trench through the permafrost and bury the pipeline before departing. The Alaska Pipeline project alone would be more than double the size of the 800-mile-long trans-Alaska oil pipeline finished in 1977, which took 21,000 construction workers three years to build.
Towns along the pipeline routes grimly expect the construction to bring inflation, drugs and crime along with the economic boost for their rural economies. In Yellowknife, two new diamond mines have sent rents soaring and brought cocaine to the streets. Last month, the town experienced its first drive-by shooting.
"We know things are not going to work perfectly. They never do," said Bill Braden, a member of the territorial assembly in Yellowknife. "But the pipeline would give the communities and people of the Mackenzie Valley and Delta hope for the future. Right now, if I was a teenager, I wouldn't see a whole lot of reason to stay in the area."
Making a Choice
Dog sleds are typical in Fort Simpson, along the route of a proposed natural gas line. Town officials say pipelines would bring an economic boost, but also drugs and crime. Dog sleds are typical in Fort Simpson, along the route of a proposed natural gas line. Town officials say pipelines would bring an economic boost, but also drugs and crime. (Photos By Doug Struck -- The Washington Post) Related Coverage
* Environmentalists Make Last Stand On Alaskan Drilling * Alaska Oil Field's Falling Production Reflects U.S. Trend * Alaska Town Split Over Drilling in Wildlife Refuge * Where Oil Is Mined, Not Pumped * TIDEPOOL | News for Salmon Nation * Manufacturers Blog * The Truthseeker
The bigger footprint, after the construction crews have left, will be in opening the mineral-rich area to further exploration and development.
Mostly for that reason, some environmentalists favor the Alaska Pipeline, which follows the route of the existing oil pipeline and Alaska Highway.
"We think it's the lesser environmental evil," said Stephen Hazell, a director of the Sierra Club of Canada. Environmental groups have largely bowed to the inevitability of at least one of the projects.
"Natural gas is clearly better than coal or oil," said Peter Ewins, a director of the World Wildlife Fund of Canada. "In principle, we are not opposed, if the development is done in a properly planned and well-balanced way."
The natural gas from either line would be fed into a grid of pipelines in Alberta that connects the United States and Canada into a largely seamless single market. Oil company officials say the soaring demand is in the United States, and that is where the gas would go.
But some environmentalists suspect that the Mackenzie pipeline, in particular, would feed the huge oil-sands project in Alberta. There, natural gas is used to cook strip-mined tar sludge into recoverable oil, a process environmentalists say is energy-inefficient and increases global warming.
"If we were convinced the gas was going to be used in people's homes to replace coal-fired energy, we would be much more sanguine about it," said Hazell.
Despite its much larger size, the Alaska Gas Pipeline could move more quickly. The oil pipeline and highway along the proposed route already have cleared the way with access rights, aboriginal land claims and environmental reviews. Since the 1970s, the TransCanada pipeline company has held rights to one route in Canada, and has laid groundwork on the Alaskan side as well.
"The gas market in North America really quite desperately needs this gas," TransCanada Chief Executive Hal Kvisle, said by phone from Calgary. "We think it would be quite foolish not to use" the company's access rights to speed up the project.
This quiet town on an island of the Mackenzie River, already wrapped in the gloom of winter.
Speed is what Alaska's Gov. Murkowski wants. He has made it a personal goal to find a way to get Alaska natural gas to market, foreseeing a second wave of the riches that poured into the state with the oil pipeline. All Alaskans still receive a yearly dividend check from the oil pipeline royalties.
"We are approaching an historic moment -- moving from 30 years of trying, to the reality of a gas line," the governor told reporters recently. He has proposed a novel sharing of ownership in which Alaska would have a 20 percent stake in the line.
"We're going to do it right this time," the governor said by phone from Anchorage after emerging from negotiations with the Prudhoe Bay producers Exxon-Mobil and BP. He already agreed to terms in October with a third company, ConocoPhillips. "The country needs the gas," he said. "This is the time."
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