SOURCE: NetAct America, Inc.

May 03, 2006 10:00 ET

Source Press: Supplying America's Oil

TORONTO -- (MARKET WIRE) -- May 3, 2006 -- Last week Washington officials admitted that the United States was in an energy crunch with President George Bush outlining a four-point plan that is aimed at reducing America's dependence on foreign oil, while to the North; Canada has been developing its Alberta oil sands which have more reserves than Saudi Arabia. But bringing the two trading partners together is the challenge.

Bush said that Congress needed to streamline the application process for oil companies to build new refineries to meet demand. While Canada's Suncor Energy Inc. chief executive Richard George says California refineries are running out of oil and looking to import crude from Latin America while they already have the capability to refine Alberta's oil sands product slates.

The US Gulf coast has the largest refining capacity in the world and oil production from Alaska's North Slope and California are on the decline. Yesterday, Bolivia's left-wing President Evo Morales signed a decree nationalizing Bolivia's oil and gas sector and Venezuela is looking to reducing the amount of oil being made available for the US -- even threatening to blow up its oil fields. Yet the Bush administration has yet to tap its Northern neighbour for more of its supply.

Pipeline capacity in Canada is also on the rise with new lines to the West coast already under development with plans for more processing plants in Alberta underway to separate the oil for transport. And more capital is pouring in as well. Royal Dutch Shell Plc said its Shell EP Americas unit paid C$465 million ($400 million) to buy 10 properties in northern Alberta, the highest price paid for Canadian oil sand leases this year. But while majors pour cash into the Alberta oil sands the junior oil companies are matching those advances. Patch International, Inc. (OTC BB: PTCH) purchased four Alberta oil sand properties in the same auction as Shell EP with one of those bordering that major producer.

Patch has been busy organizing at the operating level as well, announcing yesterday the addition of Michael Vandale as Director of Patch Energy, Inc., a wholly owned subsidiary of Patch International, Inc. Vandale hales from Arsenal Energy, Inc., a Calgary, Alberta-based oil company where as its President Vandale grew the company from 50 barrels of production a day in 2004 to 2,300 barrels per day when he exited the Toronto Exchange-listed company to join Patch.

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