Petrobank takes over oil sands pilot

The oil sands asset shuffle continues in Alberta, with Petrobank Energy and Resources taking sole ownership of its Whitesands project after buying out a private equity group for C$120 million.

The seller, Winnipeg-based Richardson Financial Group, profited handsomely from the transaction, having acquired the stake two years ago for C$23.75 million.

Whitesands is a pilot project in northeastern Alberta, deploying a patented bitumen recovery method that pumps oxygen to the deposit, creating combustion to melt the sands and force partially upgraded heavy oil to the surface.

It is being touted as an alternative to using expensive natural gas to generate steam and achieve the same results in deeply buried bitumen deposits.

Petrobank Chief Executive Officer John Wright said his firm’s wholly owned, privately held Whitesands Insitu is now free to develop the project at its own pace at a time when the venture is on the verge of rapid growth and major capital spending.

Current output from the pilot is nearing 1,800 barrels per day from 40,000 acres of leases estimated to hold 2.6 billion barrels of bitumen in place.

Petrobank raised the estimate for recoverable oil by 23 percent last November to 658 million barrels. It is aiming for an initial commercial phase of 10,000 bpd.

—Gary Park