According to the Alberta Energy Resources Conservation Board (ERCB), bitumen accounted for 78% of Alberta’s total oil output in 2011. Production of light oil from tight rock is now up by 175,000 bpd relative to what would have been expected without the new completion technologies. Bitumen production in 2011 grew by 15% in the Athabasca region, 12% in the Cold Lake region and 2% in the Peace River region. The ERCB predicts bitumen output will more than double to reach 3.7 million bpd by 2021. The ERCB expects upgraded and non‐upgraded bitumen will make up about 90% of Alberta’s total oil production by 2021.
Birchwood, a Calgary based private company founded in 2010, has filed a project summary with provincial regulators for a 5,000 bpd Steam Assisted Gravity Drainage (SAGD) oil sands project. If approved according to schedule, the project, located west of Cold Lake, will start up in the first quarter of 2015 at an estimated cost of $230 million. Simulations indicate that initial oil production rates will be around 400 or 500 bpd. The company intends to develop 12 hectares of land to drill for primarily heavy oil.
Nexen, a Calgary based oil and gas company, has agreed to be bought out by the state owned China National Offshore Oil Company (CNOOC), China’s top offshore oil producer. The ambitious acquisition will cost $15.1 billion. The day after the deal was announced Nexen stock jumped 54% in value. The Nexen board has unanimously approved of the deal, however, the project must still undergo shareholder and regulatory approval. Nexen’s second quarter production averaged 213,000 bpd of oil. If the takeover deal succeeds, CNOOC will base the headquarters for its North American and Caribbean operations in Calgary, Alberta.
PETRONAS, a Malaysian company, has agreed to buy all of Progress Energy’s outstanding common shares at a cash price of $20.45 per share. Progress Energy is a Canadian exploration and production company focused on natural gas development in BC and Alberta. The transaction is valued at $5.5 billion, and received unanimous approval from the Progress’ board of directors. The Canadian operations for the company will remain in Calgary and the company will have a commercial office in Vancouver for LNG development. The acquisition is part of PETRONAS’ strategy to become a global leader in LNG. The development is expected to generate substantial economic benefits for the provinces and local communities due to the increased access to capital PETRONAS has.S
Smart Sand, a leading supplier of industrial sand for the oil and gas industry, has partnered with Canadian Pacific Railway (CPR) to build a new frac sand transload facility to serve Bakken shale producers in the Williston Basin located in Southern Saskatchewan. The two companies will supply and ship precious frac sand to the unconventional oil and gas regions. CPR is the only North American railroad to serve the Bakken formation, the Alberta industrial heartland near Edmonton, and the Marcellus Shale located in the north‐eastern United States.