Alberta Orders Shut-In Of 33 Million Cubic Ft/Day Nat Gas Production

A provincial agency that regulates Alberta's energy resources has ordered EnCana Corp. (ECA), Canadian Natural Resources Ltd. (CNQ) and a unit of Paramount Energy Trust (PMT.UN.T) to temporarily shut-in 33 million cubic feet per day of natural gas production, saying it may threaten nearby oil sands resources.

Alberta's Energy Resources Conservation Board announced its decision late Thursday, saying that 158 gas wells located northwest of Fort McMurray "may present a significant risk to future insitu bitumen recovery and must be shut in, pending the outcome of a full ERCB hearing."

The 158 wells owned by EnCana, Canadian Natural and Paramount must cease production by the end of the month, the ERCB said. A final public hearing over the wells is scheduled for early 2010.

The ERCB issued the shut-in order at the request of Total E&P Canada Ltd., a unit of Total SA (TOT) and Sunshine Oilsands Ltd., a privately owned oil sands development company based in Calgary. Total and Sunshine argue that the natural gas wells are too close to oil sands reservoirs, and drop the underground pressure needed to efficiently extract the oil sands.

-By Edward Welsch, Dow Jones Newswires; 613-237-0669; [e-mail]