PanCanadian Begins Development of Deep Panuke

PanCanadian Petroleum Limited's Board of Directors today approved the start of commercial development activities for the Deep Panuke offshore natural gas field. Deep Panuke is located approximately 250 kilometers southeast of Halifax, Nova Scotia. The Company's Board also approved funding to undertake engineering design work and to prepare the Development Plan Application.

Plateau sales gas production from the Deep Panuke field is anticipated to be 400 million cubic feet per day following start-up in early 2005, based on recoverable natural gas in the order of one trillion cubic feet. Total capital expenditures for the development, including facilities, flowlines to shore and contingency, will be approximately $1 billion Cdn. PanCanadian has a 100 percent interest in Deep Panuke.

Since 1999, PanCanadian has drilled four wells into Deep Panuke. During tests, each of the wells flowed at more than 50 million cubic feet of natural gas per day. No additional delineation or development wells are planned in the Deep Panuke reservoir in 2001 as the Company's drilling program offshore Nova Scotia focuses on new exploration opportunities.

"We are excited to announce the beginning of commercial development of the Deep Panuke field," said David Tuer, PanCanadian's President and Chief Executive Officer. "The scope of this field will provide us with significant market volumes. And while there is a lot of engineering and optimization design work to be done, we are very confident that the development of Deep Panuke will create long-term value for our shareholders and for the province of Nova Scotia."

PanCanadian expects to file a Development Plan Application with the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) in the third quarter of 2001. As part of this process, the Company will conduct stakeholder consultation. The Development Plan Application will include details on all aspects of the project including geological, engineering and construction data, environmental and safety plans, socio-economic impact studies and a Canada-Nova Scotia industrial benefits plan.

PanCanadian's land position offshore Nova Scotia extends over approximately 4.4 million gross acres through interests in 15 exploration licences. The Company has an average working interest of 55 percent and operates 14 of the licences. PanCanadian plans to drill four exploration wells on other blocks offshore Nova Scotia during 2001.


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