Pengrowth chases oil sands growth

Calgary-based Pengrowth Energy has received final Alberta regulatory approval for the first commercial phase of a thermal oil sands project — a C$590 million plant to initially produce 12,500 barrels per day.

The Lindbergh project is expected to come on stream by late 2014 and ramp up over time to 50,000 bpd.

Pengrowth Chief Executive Officer Derek Evans said that “based on an outstanding pilot performance, we expect the commercial project will be a highly economic, low steam-oil ration, low-decline project that, once at full capacity, will provide the backbone for a long-term, dividend-paying” operation.

The pilot has produced 2,300 to 2,500 bpd over the last two months.

Subject to company and regulatory approvals, Pengrowth plans to start production from the second phase in early 2017 and add a third phase by late 2018.

Unlike most of the thermal-recovery projects in northeastern Alberta, Lindberg is in east-central Alberta near Cold Lake, which offers the advantage of all-season access and close proximity to pipelines.

To help pay for its oil sands expansions, Pengrowth sold assets in Weyburn, Saskatchewan, for C$316 million in March and is targeting an additional C$700 million of dispositions before the end of 2013.

—Gary Park