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PanCanadian and Ocean Rig form partnership to provide deep-water drilling services offshore East Coast of Canada

PanCanadian Petroleum Limited's Board of Directors has approved the formation of a partnership between PanCanadian and Ocean Rig ASA of Oslo, Norway. The partnership will offer deep-water drilling services to both PanCanadian and other companies exploring off the East Coast of Canada. The partnership will use Eirik Raude, one of the world's largest rigs, currently being constructed by Ocean Rig. The agreement is subject to receipt of necessary consent by Ocean Rig's secured creditors, expected in the next quarter. Eirik Raude is one of two fifth-generation deep-water semi-submersible drilling rigs, known as Bingo 9000's, currently under construction in Pascagoula, Mississippi. It is expected to be in-service during the first quarter of 2002. The other rig, Leif Eiriksson, is currently being prepared for sea trials. Initially, the partnership will contract with PanCanadian for drilling services offshore Nova Scotia. The first contract will extend for a period of up to 15 months. The actual contract period will depend upon PanCanadian exercising certain options, and upon the time required to drill the wells covered by the contract. "Following our recent announcement to proceed with commercial development activities for our Deep Panuke field, containing an estimated one trillion cubic feet of recoverable natural gas, the formation of the partnership with Ocean Rig further demonstrates our commitment to the East Coast as a core area for further exploration and development," said David Tuer, PanCanadian's President and Chief Executive Officer. "There are a limited number of rigs in the world capable of drilling in this harsh environment and at depths of over 5000 feet. Through this arrangement we have secured access to reliable, cost- effective drilling, and have positioned PanCanadian for enhanced business relationships with other operators in the region requiring these services." PanCanadian has extensive land holdings off the East Coast of Canada, covering approximately 5.6 million gross acres, of which 4.4 million gross acres are offshore Nova Scotia. The Company has an average working interest of 66 percent in 18 exploration licenses, and operates all but one of these licenses. Eight of PanCanadian's licenses are in deep water, and with a further 21 exploration licenses owned by other exploration companies, industry deepwater work commitments total $875 million over the next three to five years. This represents over half of the total industry work commitments of $1,627 million. Through the formation of this partnership, PanCanadian has secured equipment that will significantly enhance the industry's ability to efficiently develop this acreage in the required time frame. PanCanadian is a leading North American energy company active in the exploration, development, production and marketing of natural gas, crude oil and natural gas liquids. Our core areas include the Western Basin, the East Coast of Canada, the Gulf of Mexico, and the U.K. These areas are complemented with focused exploration programs in Brazil, Australia and Libya. Ocean Rig ASA is a Norwegian listed public company that builds, owns and operates deep-water drilling rigs.