Ivanhoe Energy (TSX: IE; NASDAQ: IVAN) announced today that it has learned that the Alberta Energy Regulator (AER) intends to develop a new long-term policy for reviewing shallow steam assisted gravity drainage (SAGD) applications in Alberta. Following discussions with each affected industry applicant, and by the end of January 2014, the AER plans to publish interim guidelines. Then, following extensive industry and stakeholder engagement, the AER will develop a long-term policy. This decision and process affects all shallow SAGD projects, not just Ivanhoe's Tamarack project.
Ivanhoe Energy began the regulatory process in November 2010, was informed that its application was complete by Alberta Environment and Sustainable Resource Development (AESRD) in January 2013, and enhanced its application with an addendum in August 2013. The addendum included results from the testing and coring of three additional wells and 3D seismic data from a portion of the project's area. Ivanhoe met with the AER on December 13, 2013 and was advised that the project would not continue to be processed until 3D seismic has been collected and interpreted over the entire initial development area and the maximum operating pressure meets the interim guidelines.
In light of these new standards, Ivanhoe will review the project and consider its next steps. The Company will communicate those steps as soon as they are finalized. Ivanhoe believes that the Tamarack project is economically attractive and poses no operational, environmental or safety concerns.
