Petrobank receives expansion approval for Whitesands

2008-11-28 05:49 ET - News Release

Mr. John Wright reports

PETROBANK'S WHITESANDS EXPANSION APPROVAL ADVANCES

Petrobank Energy & Resources Ltd. has received copies of two letters from the Energy and Resources Conservation Board (ERCB) to objecting parties that indicate that the ERCB has decided that the three-well expansion at Petrobank's Whitesands site has met all regulatory requirements and the ERCB will issue its approval document in due course.

The objective of the expansion is to further demonstrate Petrobank's Thai technology, an evolutionary in situ combustion technology for the recovery of bitumen and heavy oil. The expansion will allow Petrobank to draw upon the knowledge and know-how gained through the development of the existing Whitesands project. The company is also excited about this opportunity to further use its proprietary Capri technology, its revised downhole completion design and longer well lengths.

It is one of Petrobank's core values to communicate openly and with respect for individuals, communities and cultures. The company began its consultation with applicable regulatory agencies and other stakeholders on the expansion application in mid-2007 and ultimately filed the application in December, 2007. During 2008, Petrobank responded to routine supplementary information requests from the ERCB and Alberta environment. During this same period a comprehensive consultation program was continuing with all potential stakeholders. Two groups intervened into the application process with broad letters of objection which delayed the regulatory decision. In the correspondence, the board determined that the rights of the two groups were not "directly and adversely affected," that they did not have standing and dismissed their objections.

The delay in receiving the decision was not related to the technical merits of the application. Petrobank views this decision as validation of the values and strategy to consult, rather than compromise the process by making extraordinary financial payments to intervening parties to facilitate the withdrawal of objections and thereby shortening the regulatory process. Petrobank communicates widely on the development plans and works with stakeholders that may potentially be affected by the activities in a clear and transparent manner, in accordance with the government of Alberta's First Nation Consultation Policy on Land, Management and Resource Development, issued in May, 2005. Petrobank will continue to maintain frequent contact and work with the relevant regulatory authorities to secure all necessary permits and to meet any requirements forthcoming in the formal approval document. Following receipt of the ERCB approval document, Petrobank plans to proceed immediately with the drilling of the expansion wells. The correspondence can be viewed on Petrobank's website. To provide further clarity for shareholders, within the next week, Petrobank will also post all relevant correspondence and documents relating to the application process.

While the company is excited to use the expansion at the Whitesands site to further demonstrate the Thai technology, it is concerned with the length of time this regulatory process has taken. However, the company is satisfied with the decision reached by the ERCB as it paves the way for the expansion project and future projects to prudently develop Alberta's oil sands using environmentally sustainable and cost-effective technologies.

We seek Safe Harbor.