Buzzard Boosts PanCandian's North Sea Reserves

PanCanadian Energy Corporation has significantly increased its estimate of recoverable reserves on its Buzzard oil discovery in the United Kingdom Central North Sea, after drilling two additional appraisal wells on the structure.

Results from these two appraisal wells indicate potential oil in place in excess of 800 million barrels within the southern and central parts of the Buzzard accumulation, of which the company expects to be able to recover in excess of 400 million barrels. This is up from the company's previous estimate of between 200 and 300 million barrels of recoverable oil. PanCanadian has close to a 45-percent working interest in these volumes.

"This is exciting new progress in one of PanCanadian's key areas of growth," said Gerry Macey, executive vice president for exploration. "Our ongoing drilling program is designed to investigate the remainder of the Buzzard play and we still have a significant area left to evaluate."

The Buzzard 20/6-4 appraisal well, located 2.1 kilometers north of the original discovery well location, was drilled using the Borgny Dolphin semisubmersible rig. The well encountered a similar pay section as the discovery well. Following a test program that is currently underway, the well will be sidetracked to obtain further information on the quality and extent of the reservoir.

The Buzzard 19/10-1 appraisal well and associated 19/10-1z sidetrack well were drilled using the Stena Dee semisubmersible rig. The 19/10-1 well and sidetrack, located 2.9 kilometres west of the original discovery well, delineated the western limit of the southern portion of the Buzzard accumulation.

Alan Booth, managing director of PanCanadian Energy (UK) Ltd. in London, said, "These results confirm our long-held belief that the United Kingdom Central North Sea still holds significant rewards for companies committed to exploring in this prolific basin."

PanCanadian will continue an aggressive appraisal program on Buzzard. The company plans to drill at least three additional wells and, where appropriate, associated sidetracks, utilizing both rigs, so that the appraisal program will be complete early in the second quarter of 2002. The focus will then intensify on development of the asset. PanCanadian has been evaluating various production concepts, including an early production system approach. Once a production-concept decision is made, partners will proceed with detailed front-end design work.

The Buzzard discovery well, 20/6-3, drilled in the summer of 2001 and located 100 kilometers northeast of Aberdeen, initially encountered more than 250 feet of hydrocarbon-bearing sandstone. During testing, the well flowed 6,547 barrels per day of light oil and 0.97 million cubic feet per day of natural gas on a 36/64th-inch choke. Rates were constrained by the limits of the testing equipment. A sidetrack to the discovery well encountered the reservoir 4,400 feet to the east of the discovery well.

The Buzzard discovery lies in PanCanadian operated License P986, which was awarded to PanCanadian and its partners in the U.K. 18th Licensing Round in late 1998. PanCanadian holds a 45.01-percent interest in the license.

Partners in the license are Intrepid Energy North Sea Ltd. (30.00 percent); BG Group (19.99 percent); and Edinburgh Oil & Gas PLC (5.00 percent).

The U.K. Central North Sea is one of the company's core longer-term growth areas. PanCanadian is the largest net and gross acreage holder in the Buzzard-Ettrick area, with interests in seven blocks, six of which it operates, covering in excess of 250,000 acres, with working interests ranging between 20 percent and 77 percent.