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IndustryOilGas7TuesdayOctober12013HuskycancelswinterdrillingprograminSahtuFailedsummerroadconstructionblamedforprojectdelaysByMEAGANWOHLBERGHuskyEnergysplanstodrilltwomoreverticalwellsintheCanolplayoftheSahtuthiswinterhavebeenputonholdfollowingasummersworthoftryinginvaintobuildanaccessroadthroughaswamp.HuskymediarepMelDu-valltoldTheJournalearlierthissummerthatthetwoex-ploratoryshaleoilwellsarenowexpectedtobedrilledinthesummerfallof2014withtimingsubjecttocorporateandregulatoryapprovals.LastweekKimGuttorm-sonmediarelationscoordina-torforHuskysaidthecompanyisstillevaluatingthetimelinewhichshesaidisexible.Wecontinuetoanalyzere-sultsfromtwoverticalwellsandseismictesting.Ournextstepsincludedrillingandevaluatingtwomoreverticalwellsonaexiblescheduletooptimizeourprogramshesaidinanemail.GuttormsonsaidupdatesabouttheSlaterRiverdrillingprogramwouldbeprovidedfollowingthethirdquarterconferencecallsetforOct.24.CompanystrugglestobuildroadThoughthecompanywastight-lippedonreasonsforthecancellationNormanWellsbusinessmanRickMuyrestoldTheJournalhespentthesummerwatchingHuskyfromgroundandairstrugglingtobuilditsaccessroadacrosstheriver.Hesaidproblemswithconstructingthe19-kmall-weatheraccessroadtothedrillingsitearewith-outadoubtresponsibleforthedelay.Theydecidedtobuildin-frastructureoutofthewrongmaterial-theyputtheirfaithinclayanditwasprovennottobeagoodbuildingmaterialuphereMuyressaid.Thepartthatgavethemgriefwastherstsay6kmofftheriverinthelowlandofthevalley.Itsswampthiswholeareaisandtheychosetoputaroadstraightthroughit.Theapproachtakenwouldhavegiventhecompanythestraightestlinetothewellsite.Theydidnthaveagreatdealtochoosefrombuttheystilldiditinaverystraight-forwardwaywhichjustdidntworkout.ThewholeprocesswasdictatedbyMotherNa-tureMuyressaid.Theychosetoputaroadthroughaswamp-andtheswampwins.Muyresspeculatedthatthefailedroadconstructionlikelycostthecompanyanywherebetween20-50millionlastsummer-theywereverywellservicedwithhelicoptersgoingoverconstantlydaily-andisthereasonthedrillingprogramhasbeencancelled.Theywereintendingatthebeginningoftheseasonofbarginginhavingbargetrafcstarttomovethecom-ponentsofrigsandwhatnotthecamp6millionlitresoffuelandsuchandtheyhadan-ticipatedthisroadbeingquiteabitmoresubstantial.Whentheynishedtheirwinterworkwhattheythoughtwasrockturnedouttobeclay-agoodportionofit.Muyressaidhehasnodoubtthecompanywillsuc-ceedinbuildingtheroadbutitwilltakemoretimeandmoremoneytodoitright.Theyworkedatit.Theyhadtherightmachinerytherocktrucks...Itsjustthematerialtheychosetousehesaid.Theyregoingtoovercomethis.Alackofexistinginfrastruc-turehasmadeitdifcultforthecompanytomoveeverythingitneedsintothearea.Nowitwillhavetowaituntilthemainrivercrossingfreezes.Theresnohurryingtheprocesspresently.ThingsaredowntoJanuary.Overmymorethan40yearshereitsproventhatitsNewYearsbeforeyoucrossattheBearRiveritdoesntmatterwhoyouare.ThatsthebottleneckforthebigrigsMuyressaid.ThoughthedelaysmeanlocalbusinessessuchashisownmarinetaxiventurewillhavetowaitforworkfromHuskyMuyressaidthedelayisntgoingtodetracttoomucheconomicallyfromtheregionthiswinter.Regardlessofthedif-cultiestheresmoneybeingspentherehesaid.Completionoftheroadisstillplannedtotakeplacewithinthe2013scalyearal-thoughGuttormsonsaidnoth-ingwillbenalizeduntilof-ciallyannouncedonOct.24.WithlesfromJackDanylchukNormanWellswillbeseeingatouchlessactionthiswinterwithoutHuskyswinterdrilling.PhotocourtesyofTownofNormanWellsAngermountsasgaspricessoarinNormanWellsByMEAGANWOHLBERGBusinessownersinNor-manWellsarefumingfol-lowingthetownsdecisiontosignanagreementwithIm-perialOilraisingthepriceofnaturalgasforbusinessesby138percentstartingNov1.Wordgotoutlastweekthatheatingcostswouldberisingforbusinessesinthecommu-nityinanefforttopushthemoffthedwindlingsupplyandontoanewheatingsource.Towncouncilheldtwoconsecutivespecialmeet-ingsonSept.20and23forthereadingsoftheresolutionsimplytitledGasServicesthatwouldsealthedeal.ApublicmeetingfollowedonSept.25wherelocalbusi-nessownerssharedtheirfrustrationthattheywerentgivennoticeorasoliddead-lineforconversionmonthsearlierdespitethemayorandcouncilsadmissiontheyknewabouttheimpendingchangesonAug.8.Thedealwaskeptcon-dentialuntillastweekatthebehestofImperialOilaccordingtocouncil.Attemptstoreachthemayorforcommentwereunsuccessful.Formermayorandbusi-nessownerDudleyJohnsoncalledthedecisionfrustrat-ingandunnecessary.IfthecostofheatinggoesupthatmeansmyrentisgoingtogoupsaidJohn-sonwhoownsagiftshopintowncalledCreations.Itmultiplies.Ifbusinessesgetchargedmorethatspassedonineverything.WiththeincreaseJohn-sonestimatedbusinesseswithlargebuildingscouldbespendingupwardsof12000amonthinheating.Itswickedandtheresnoneedofit.Imperialsotheysayischargingthissotheycanforcethecom-mercialoffthegas.ThecommercialwasgoingoffthegasanyhowsowhyareyougougingthemHesaidthesamethingap-pliestotheincreasedcostoflandeddieselforresidentswhowillnowbechargedthefullpriceasofNov.1.Theyarecurrentlypaying65percentofthecost.WhyThisgasisair.WhyaretheygougingJohnsonasked.Accordingtoreportsfromthecouncilmeetingthecom-panyhaspromisedtogiveeveryaccountarebateof5000-10000formakingtheconversionbuttheexactamountisunclear.TheyregoingtotakefromthecommercialandgiveitbacktoeveryoneJohnsonsaid.Itjustdoesntringtrue.Itsfrustratingtobehonest.Thoughthetownsignedamemorandumofunder-standingwithDalkiaCanadaearlierthisyeartoprovidesyntheticnaturalgastothecommunityvoting4-1infa-vourofthemotioncouncilchangeditsmindbecauseitwastooexpensive.Detailsofexactlywhythedealfellthroughhavenotyetbeenmadepublic.ImperialOilhassignedabesteffortcontractwiththetownmeaningthetownwillgetarebatefromthecompanyonceeveryonehasconvertedbytheendofOctober2014.ThecommercialwasgoingoffthegasanyhowsowhyareyougougingthemFormermayorDudleyJohnsonIndustryOilGas