Devon Moves Forward with Jackfish Heavy Oil Project

Devon Energy is proceeding with development of a new thermal heavy oil project in Canada. The Jackfish project, in which Devon has a 100 percent working interest, is located south of Fort McMurray, Alberta. When fully operational, the Jackfish project is designed to produce approximately 35,000 barrels per day of crude oil from the Alberta Oil Sands.

The project will utilize Steam-Assisted Gravity Drainage (SAGD) technology. Devon expects to file the necessary regulatory applications next month. First production from the project is expected in late 2006 or early 2007 with full production scheduled for 2008. Devon estimates total recoverable reserves from the Jackfish lease to be 300 million barrels. Capital requirements are approximately US$400 million. The company estimates approximately 70 percent of the total capital will be expended in the two years following regulatory approval. The remainder will be expended over the 25-year life of the project.

In making the announcement, John Richels, President of Devon's Canadian subsidiary, said, "Devon has a great deal of experience with the SAGD process as operator of the Dover facility, the longest-running SAGD project in the world. We are excited about the opportunity to participate in the development of Alberta's world-class oil sands resources through this new large-scale project."