Federal government $32 million for First Nation Limited Lands Partnership

VANCOUVER – Premier Christy Clark reaffirmed the government’s commitment with First Nations to share the benefits of liquefied natural gas development by amending the economic partnership agreement for the proposed Pacific Trails Pipeline project (PTP).
“BC has a once-in-a-lifetime opportunity by exporting natural gas to Asia, and we want to make sure First Nations are part of this industry’s future,” said Clark. “This announcement creates a valuable model for industry proponents who seek to work in partnership with First Nations while ensuring their communities benefit from the growth of our natural gas sector.”
The provincial government is providing $32 million to the First Nations Limited Partnership to facilitate a non-equity investment in the pipeline. The partnership is comprised of 15 northern First Nations along the route of the pipeline and will generate revenues for each of the First Nations’ communities.
“By working closely with First Nations and industry, we are creating jobs and economic development for remote communities,” said Minister of Energy, Mines and Natural Gas Rich Coleman. “This updated agreement is an example of industry’s collaboration with First Nations throughout our province to secure a prosperous future for B.C.”
The Pacific Trails Pipeline is a 463-kilometre pipeline that will carry natural gas from Summit Lake, 55 kilometres north of Prince George, to the proposed Kitimat LNG facility on B.C.’s north coast. The Pacific Trails Pipeline is an important component of the Kitimat LNG project, proposed by Chevron and Apache. The proposed pipeline will create hundreds of jobs during its three-year construction period.
The premier made the announcement at the first-ever international LNG conference – Fuelling the Future: Global Opportunities for LNG in BC.
Layoffs at Talisman
Layoffs at Talisman Energy (TLM -1.3%) could be a harbinger of pain ahead for other Canadian gas producers grappling with low commodity prices.
Talisman Energy confirmed that 220 people, about 15% of Talisman’s North American workforce, were told last week that they would be out of a job. Most of the cuts affect staff mainly in Calgary.
Talisman is changing its focus from conventional gas extraction to shale gas closer to the Marcellus shale gas play underneath Appelachian Mountains  in the US. Talisman is opening a satellite office in Pittsburgh, Pennsylvania in the first half of next year to be closer to this action.  Talisman will also be investing in more land in the Montney gas play in the BC Peace River.  Conventional gas is still important part of Talisman, but it’s shrinking.
Western Canadian gas production has fallen to 13B cu. ft./day from 17B a decade ago, Ziff Energy’s Edward Kallio says, “and it’s going to get worse.”
Encana (ECA -1.5%) will be next, he says: “They can’t make money at these prices in the basin.”
Nexen receives full approval for CNOOC sale
CALGARY – Nexen Inc. announced that Nexen has received approval from the Committee on Foreign Investment in the United States (CFIUS) with respect to the proposed acquisition of Nexen by CNOOC Limited, and now has all of the requisite approvals to proceed to close.
The transaction closed the week of February 25th, 2013 subject to customary closing conditions.
The letter of transmittal for the acquisition of common shares will be mailed to registered shareholders shortly and is also available on Nexen’s website. For more information common shareholders may visit
www.nexeninc.com\investorinfo.
Seeking Alpha
Rigs drilling in Frontier Lands
Nabors Drilling 211 has completed a re-entry at Husky Little Bear N – 09 and is commencing a re-entry at Husky Little Bear H – 64 – authorised on January 16th, 2013 in the Norman Wells area.  On January 11th, 2013 Beaver Drilling was authorised to drill two exploratory wells at Mirror Lake for Conoco Phillips.  They are located near the Nahanni Ridge Road. Akita Drilling is drilling near Norman Wells for MGM.
Encana re-enters Haynesville play
Encana’s (ECA) Q4 earnings call on February 14th stirred an animated reaction among E&P-focussed investors and analysts. Surprisingly, the most notable news came not from the company’s emerging oil and liquids-rich plays (the update on that front was uneventful and cautious, likely contributing to the stock’s 6.6% decline on the day of the release), but from its Haynesville dry gas operation. At the time when many competitors and investors seem to have written the Haynesville off as economically uncompetitive in today’s low natural gas price environment, Encana announced a plan to re-enter the play and gave a very bold forecast regarding its economics:
Encana is resuming activity in the Haynesville play because of the low supply costs there. Encana expects that the Haynesville will be able to produce solid returns at current natural gas prices. The company currently has two rigs running in the play with plans to increase to five rigs through 2013. (Encana’s February 14th press release)
The company now estimates that its cost of supply in the Haynesville (minimum Nymex price needed to earn the company’s 9% hurdle rate of return on incremental drilling) will be “in the $2.50/MMBtu range.”

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