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Oil sands start-up forages for prospects CanWest Petroleum plans 12 wells this winter at Alberta oil sands prospect; also testing Saskatchewan oil sands extension Gary Park Petroleum News Canadian Contributing Writer
Surrounded by a hungry pack of oil sands giants chasing scarce prospects in northern Alberta, start-up CanWest Petroleum, and its stable of subsidiaries, is sinking its teeth into some promising morsels.
In its latest acquisition, CanWest, through wholly owned Township Petroleum, made a successful bid of C$864,000 for the 23,040-acre Eagle Nest prospect in the Athabasca region of northwestern Alberta.
The company is now gearing up to spend about C$2.3 million on 12 wells this winter to test an Alberta Energy and Utilities Board estimate that the property has an initial in-place resource of 3.4 billion barrels of crude bitumen.
Independent consultants have told CanWest that seven previous exploration wells on the prospect point to a net bitumen pay of 46 feet at a depth of 1,700 feet.
That indicates a commercial operation would lend itself to the fast-evolving steam assisted gravity drainage technology, which injects steam under pressure, melting the bitumen, which can then flow to the surface. Company also working Saskatchewan CanWest is also poised to blaze trails in Saskatchewan, to test the eastern extension of the oil sands and study the feasibility of oil shale as a source of petrochemical feedstocks.
It has a controlling interest in 1.4 million acres in the Firebag East project and is now developing an exploration program, including geophysical surveys to delineate and prioritize prospective targets before drilling to test the prospective pay zones.
Firebag East is adjacent to a host of major projects, including Suncor Energy’s Firebag operations which expect to yield 140,000 barrels per day; Synenco’s Northern Lights project which is targeting 150,000 bpd, with China’s Sinopec as a 40 percent partner; the Kearl leases where Imperial Oil and ExxonMobil Canada may invest C$6.5 billion to achieve peak output of 200,000 bpd; and Petro-Canada’s 60,000 bpd Lewis project.
In total these projects hold reserves of 14 billion barrels of recoverable bitumen. Closest bitumen production 30 miles away The closest bitumen production is Suncor’s Firebag operation, just 30 miles from the permit boundary of CanWest’s unit Oilsands Quest, which recently completed a C$4.4 million equity financing with CIBC World Markets to fund its 2005 exploration program on 13 permits covering 850,000 acres in northwest Saskatchewan.
As CanWest moves ahead with its plans it is being closely followed by major companies in the area, a spokesman for CanWest told Petroleum News.
Rounding out CanWest’s current plans, the company has an agreement with Nova Chemicals to jointly study the feasibility of Saskatchewan’s Pasquia Hills oil shale project as a potential source of petrochemical feedstock.
Nova has the right to purchase any future feedstock production, leaving CanWest as the owner of any project.
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