MEG Energy, Newmont Mining take Alberta oil sands role

Gary Park

Two more newcomers are tossing their hats into the Alberta oil sands ring. Privately held MEG Energy, which started out six years ago as McCaffrey Energy Group, has filed with the Alberta regulator to build a pilot plant near Christina Lake in northeastern Alberta and the Canadian subsidiary of Denver-based Newmont Mining plans to build on its exploration program in the same region over the next 12 months. MEG has acquired leases covering 38,000 acres since 1999 and has permits for 127 wells.

If the pilot plan is approved, MEG hopes to start production in early 2007 and reach 3,000 barrels per day within six months, using steam-assisted gravity drainage technology.

A full-scale commercial operation could follow a year after start-up, with MEG as sole owner and operator.

Newmont acquired 7,680 acres in 2002 following a three-way transaction by former gold mining companies Franklin Nevada of Canada and Normandy of Australia. Newmont took 100 percent ownership of both companies, to become the world’s largest gold miner.

It expects to drill 18 bitumen evaluation wells over the next year and is awaiting approval for another 18 wells. It currently produces about 2,000 barrels per day as part of its conventional oil and gas exploration program.