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Startups revving oil sands engines
Gary Park For Petroleum News
Two early-stage companies are rolling ahead with plans for oil sands projects in Alberta, undeterred by the sector’s trouble with new environmental and royalty regulations.
Privately held Athabasca Oil Sands Corp. or AOSC has raised C$401 million and is currently running eight rigs and expects to drill up to 265 core holes on its 100 percent working interest in 650,000 acres.
Meanwhile, Rochester Energy, after completing a series of financings over the past year and obtaining favorable resource estimates, is close to starting evaluation drilling at one of its two projects.
AOSC has its sights set on a 2,000-barrel-per-day pilot in 2010, followed by a series of 25,000-30,000 bpd commercial phases, starting in 2014 and building to 400,000 bpd by 2030.
In a presentation to an oil sands conference in London, AOSC President Sveinung Svarte — who was recently Total E&P Canada’s vice president of oil sands — said his company has been building a land portfolio over the past two years, undertaking geological work along the way.
AOSC among leading drillers After drilling 37 core holes last winter, AOSC has joined the ranks of leading oil sands drillers.
In December alone the Alberta Energy and Utilities Board issued 2,685 oil sands well permits, with the top four spots all going to startup companies — UTS Energy 361, AOSC 311, Synenco Energy 292 and Connacher Oil and Gas 201.
This winter’s program by AOSC will cover three main areas — Dover 145 wells and 60 miles of two-dimensional seismic; Thickwood 65 wells; and Hangingstone 55 wells and 60 miles of seismic. To this point, the company has completed about 250 wells on its acreage.
Svarte said upgrading is not part of AOSC’s business model. Because of the unattractive economics of upgrading in Alberta, the company is open to downstream deals with partners, either in the United States or elsewhere, he said.
Currently, management and directors own 25 percent of AOSC, with the balance held by large investment funds. A decision will be made this spring on the timing of an initial public offering, which could take place this year.
Rochester has 2 prospect areas Rochester has a 100 percent interest in two core areas — 20,480 acres at Christina close to several in-situ projects, including the Nexen-OPTI Long Lake project and the ConocoPhillips-Total Surmont project, and 11,520 acres at Mackenzie, near the Total-Enerplus Joslyn Creek project and Canadian Natural Resources’ Horizon project.
Independent reviews by petroleum consultants Ryder Scott Company-Canada estimates bitumen-in-place of 1.6 billion barrels at Christina and 733 million barrels at Mackenzie, but cautions there is no certainty that any portion of undiscovered resources will be discovered and eventually be feasible for commercial production.
Rochester has received regulatory approvals for 14-16 wells at Christina which are expected to be completed by April. Drilling at Mackenzie will “proceed at a later date.”
The company’s chairman and chief executive officer is Troy Mochoruk, who was president of a private equity fund in the U.S. from 1994 to 2001, when he moved to Calgary to pursue proprietary energy investments. He has been chief executive officer of Rochester for two years.
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