Kirby SAGD suspended

This is right beside Petrobanks Glover parcel South of Whitesands.

Apr 17, 2009 2:42:00 PM MST
Enerplus Resources Fund calls off Kirby oilsands development (Enerplus-Kirby)


CALGARY _ Enerplus Resources Fund (TSX:ERF.UN) is halting work on the Kirby oilsands development south of Fort McMurray, Alta.

"While we believe there is long-term value in the Kirby project, the current cost structures, commodity price environment and our cost of capital do not offer a sufficient economic return for additional investment toward project sanctioning at this time," Enerplus stated Friday.

It said it will wrap up current activities "and position the project to be re-evaluated and potentially reinitiated at a later date."

Enerplus, the sole owner of the site, had applied in September for the first phase of the development, a 10,000-barrel-a-day steam-assisted gravity drainage project with a contingent resource estimated at over 400 million barrels.

"We plan to complete an updated resource assessment this summer based on new seismic data and to complete the regulatory application process by this fall as originally planned," Enerplus said.

"We will not, however, continue the advance engineering work which would have led to a sanctioning decision later in 2009."

The fund, which had already reduced its budget for Kirby this year to $25 million, added that it expects to employ most of the oilsands staff on wrapup activities over the next several months "and begin redeploying them into other areas of our business