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AEC expands North American natural gas storage with purchase of Oklahoma facility

CALGARY, Feb. 27, 2001 (CNW) – Alberta Energy Company Ltd. has expanded its North American gas storage network with the acquisition of the Manchester Gas Storage Facility in Grant County, Oklahoma.

Salt Plains Storage Inc., an indirect wholly owned subsidiary of Alberta Energy Company Ltd., has reached an agreement with Manchester Gas Storage Inc., and its affiliate MGL Inc., to purchase the Manchester facility for US$42 million.

“This acquisition strengthens our North American network of gas storage facilities. Salt Plains is ideally located in a region where demand for natural gas as a primary fuel for heating and power generation is growing,” said Rick Daniel, Vice-President, AEC Storage and Hub Services, and President of Salt Plains Storage, Inc. “Salt Plains is ready to contract storage capacity starting April 1.”

The Manchester facility will be renamed Salt Plains Gas Storage Facility. Located about 180 kilometres (110 miles) north of Oklahoma City, Salt Plains is tied to the Williams Central and Oneok Gas Transportation pipelines, which serve both regional and continental gas markets. Salt Plains can store 15 billion cubic feet of natural gas, inject 100 million cubic feet per day and withdraw and 200 million cubic feet per day. Salt Plains will be offering both long- and short-term firm storage services effective April 1, 2001. The purchase and sale was approved earlier this month by the Federal Bankruptcy Court for Northern Oklahoma. The transaction closed February 26, 2001.

As Canada’s largest gas producer and North America’s largest independent gas storage operator, AEC is able to capture significant value from upstream gas production and volumes purchased on the open market. AEC is the only large North American independent oil and gas producer that makes gas storage a key part of its business plan. Anchored by the AECO C Hub in southeast Alberta, other facilities include storage at Hythe, Alberta, Wild Goose Storage near Gridley, California, plus leased storage capacity in the Gulf Coast and Midwest regions. AEC’s North American gas storage network has a total capacity of 133 billion cubic feet. Withdrawal capability is more than 2.5 billion cubic feet per day. Salt Plains takes its name from the nearby Salt Plains National Wildlife Refuge, a natural Oklahoma habitat featuring salt flats that provide refuge to a variety of waterfowl.

For information about leasing opportunities at Salt Plains, contact Ben Ledene, Vice-President, Market Development at (403) 266-8192 or by e-mail at benledene(at)aec.ca.

As one of North America’s largest independent oil and gas producers, AEC’s daily production is expected to exceed 365,000 barrels of oil equivalent in 2001. AEC is focused on Growth, Value and Performance as it builds a Global Super-Independent oil and gas company. This strategy capitalizes on the world-class assets and high-quality, long-life reserves that AEC has established in its three strong growth platforms – Western Canada, the U.S. Rockies and Ecuador. In 2000, the Company set a target to double production from these existing platforms within five years.

The Company is also looking to establish additional growth platforms through new ventures exploration in Alaska, the Mackenzie Delta, Australia, Congo, and Azerbaijan. Midstream natural gas storage and oil pipelines assets comprise approximately 22 percent of the Company’s asset base and provide a growing source of cash flow. Currently, AEC’s enterprise value is approximately C$14 billion.

AEC’s Common Shares trade on The Toronto Stock Exchange (AEC) and on the New York Stock Exchange (AOG). AEC’s web site: www.aec.ca