The Northern Corporate Operating Unit (“Northern”) includes properties in Northwest Alberta, Northeast British Columbia, and extends into the Cameron Hills and Fort Liard areas of the Northwest Territories. Northern’s primary focus remains at Cameron Hills in the Northwest Territories, where properties generate a significant portion of Northern’s total natural gas, crude oil and NGLs production. Other significant natural gas producing properties within Northern are located at Bistcho and Haro in Northwest Alberta and Clarke Lake in Northeast British Columbia.
In Northwest Alberta, the zones targeted are characterized by Pleistocene-aged sands and gravels at depths of 30 meters through Cretaceous-aged Bluesky/Gething sands, Mississippian carbonates, and end with middle Devonian carbonates at depths of 1,600 meters in Alberta and the Cameron Hills area.
Total sales for Northern averaged 5,151 Boe/d in 2007, comprised of 25.7 MMcf/d of natural gas and 865 Bbl/d of crude oil and NGLs. Sales volumes decreased in 2007 by 23 percent from 2006 primarily due to natural declines across most properties in Northern, the shut-in of the Maxhamish, British Columbia facility on October 31, 2007, and premature subsurface pump failures in the Cameron Hills area. Paramount is awaiting certain regulatory / community approvals to resume its drilling program in Cameron Hills.
The Maxhamish facility was shut-in as a result of declining gas volumes, low prices and high operating costs, and was sold subsequent to year-end. Northern is also in the process of suspending the West Liard facility, which is expected to be complete by the end of March 2008, and is the result of declining production, low prices, and high operating costs.
Northern’s capital expenditures for 2007 totaled $40 million (excluding land). During 2007, Northern drilled 13 (9.8 net) wells, of which one (1.0 net) well was dry and abandoned and six (5.3 net) wells were in the Cameron Hills area. The majority of Northern’s field activities occurred in the first quarter of 2007 because of restricted seasonal access.
In 2008, Paramount anticipates drilling five (2.5 net) operated gas wells in Bistcho, stimulating one (0.9 net) oil well in Cameron Hills, stimulating one (0.5 net) producing gas well in Haro, Alberta, and tying in one (1.0 net) gas well in Haro.
