Maybe EnCana Corp.’s next move should be to shift its head office from Calgary to Dawson Creek.

After all, North America’s largest independent natural gas producer just snapped up $369 million of prime British Columbia real estate in a provincial land auction.

EnCana obtained natural gas rights to 350,000 net acres in the Rocky Mountain foothills just southwest of Dawson Creek. The company expects the previously explored resource play, called Cutbank Ridge, to yield more than four trillion cubic feet of gas over the next 20 years or so, thanks to advances in horizontal drilling techniques.

All told, EnCana has spent $500 million in the past 18 months on exploration drilling and land to secure 500,000 net acres and the controlling interest in Cutbank Ridge.

The company has also boosted its overall investment in B.C. this year from $700 million to more than $1 billion.

It shows the B.C. government’s strategy to entice major energy firms a little farther west is working. In May, Premier Gordon Campbell and his Liberals brought in sweeping reforms, including royalty breaks for summer drilling and marginal wells, upgrading of resource roads and streamlined regulatory processes.

I’ll bet EnCana CEO Gwyn Morgan could easily wangle a discount on office rental space for relocating headquarters to Dawson Creek.

ECUADOR HEATS UP
The welcome mat is out for EnCana in northeast B.C., but the reception is decidedly mixed in Ecuador, where the company is the largest private-sector oil producer.

EnCana last week sold its first tankerload of Ecuador oil shipped in the country’s new $1.4-billion US OCP heavy crude oil pipeline.

Through its AEC Ecuador subsidiary, EnCana has the largest interest (36 per cent) in OCP, a consortium of multinational oil firms, and a shipping commitment of 108,000 barrels per day on the pipeline.

The pipeline is expected to be fully operational later this fall. But controversy has dogged it since construction began three years ago.

The 500-kilometre project stretches from the Oriente Basin of Ecuador across South America’s Andes Mountains to the Pacific coast. Along the way, it cuts through seven national parks and protected areas, including a globally significant biodiversity reserve.

Environmental and social justice groups say the pipeline, along with hundreds of new wells and related facilities, threatens pristine Amazon forest, indigenous communities and Ecuador’s fledgling eco-tourism industry.

EnCana points out that it has invested $2.4 million US in donations and sponsorships in Sucumbios Province where it operates, plus $8.7 million US in roads, bridges, schools, health and community centres and other much-needed infrastructure.

The company also invests in local development through Fundación ÑanPaz (Road to Peace), an Ecuadorian non-profit group focused on sustainable community development.

There are two very different sides to this story.

You can check out each at www.encana.com/operations_ and_projects/ecuador.shtml and at www.globalaware.org/ whoseinterest.htm

DEVON STAYS NIMBLE
Devon Canada Corp. looks like it’s covering all bets on a future Arctic natural gas pipeline route.

The company plans a major oil and gas exploration program for the winter drilling season of 2005-06 in the Beaufort Sea in Canada’s Arctic, the first offshore drilling there in 15 years.

Intriguingly, John Richels, Devon’s president and chief executive, said last week that his company will not drill any more wells onshore in the Mackenzie Delta until the proposed pipeline is closer to startup.

So, what if the Mackenzie Valley pipeline hits a roadblock, on aboriginal claims, for example? Suppose the $20-billion US Alaska Highway pipeline – spurred by subsidies now being considered by U.S. lawmakers – goes first?

Instead of the $5-billion, 1,300-km Mackenzie project coming next, we might see a revival of the much shorter “over-the-top” route. This 485-km pipeline under the shallow waters of the Beaufort Sea would link gas in Alaska’s North Slope and the new Alaska Highway pipeline with reserves underneath the Beaufort Sea (estimated at more than 50 trillion cubic feet) and the Mackenzie Delta (where there’s 17 tcf).

Devon and its partners – with new wells offshore – would have the shortest tie-ins to a fast-tracked Beaufort Sea connector to Alaska. As the largest exploratory landholder in the region, with existing wells onshore, Devon would also be well positioned if the Mackenzie pipeline is indeed built first.

HABITAT HELP
Alliance Pipeline is for the birds, and that’s just ducky for the Nature Conservancy of Canada (NCC).

Alliance Pipeline is kicking in $250,000 over five years to the NCC to help conserve internationally important wetlands in the Cooking Lake Moraine, about 30 km southeast of Edmonton. The area is used for nesting and stopovers by 240 migratory bird species, but about 25 per cent of the habitat has been lost since 1950 due to residential and recreational development.

The land-conservation group says the donation will trigger matching contributions from the U.S. totalling an additional $750,000 over the next five years. The NCC will use the $1 million in combined contributions to implement a long-term strategy, in partnership with landowners and other conservation groups including Ducks Unlimited Canada, to protect more than 12,000 hectares of the Cooking Lake Moraine’s wildlife habitat.

EYE ON IRAQ
Is the Organization of Petroleum Exporting Countries (OPEC) just blowing fumes with its surprise announcement to cut oil output? OPEC insists its members will cut output by 3.5 per cent, or 900,000 barrels per day, to 24.5 million b/d starting November 1. The cartel is trying to prop up prices, and counter the impact of Iraq’s looming return to full production along with rising production by cartel outsiders.

OPEC – especially its seven Arab member-states – has a big incentive to keep prices as high as it can for as long as it can. That incentive is the United States, with its firm grip on Iraq’s oil spigot.

OOPS!

The furious flying fingers were performing a little too fast on the keyboard for last week’s column. Antrim Energy Inc. – not that other name the fumbling fingers wrought – is the Calgary-based junior oil and gas producer that this summer became only the second company from outside the United Kingdom to take the speedy route to a listing on the London Stock Exchange.

Mea culpa to Antrim Energy which, by the way, plans to drill wells in Australia, Tanzania and the U.K. North Sea next year.