Alberta regulators approve plans for start-up oil sands venture

Gary Park

Petroleum News Calgary correspondent

Privately held Deer Creek Energy has taken the next step on a long road towards an oil sands project that could ultimately see the start-up company join the oil sands big league.

The Alberta Energy and Utilities Board gave its approval to the expansion of the Joslyn project to 12,000 barrels per day, following which the Deer Creek board agreed on May 14 to proceed with commercial development of the second phase of a steam-assisted gravity drainage project.

Deer Creek President and Chief Executive Officer Glen Schmidt said the regulatory green light is a “significant milestone.”

The company started Phase I steam-assisted gravity drainage operations on April 1, aiming to reach a peak 600 bpd by mid-2005.

Meanwhile, Deer Creek has completed 560 wells and more than 650 miles of geophysical information.

Engineering work is well advanced for Phase II and more equipment orders are expected to be placed this fall, followed by facility construction and field operations in the final quarter. Full production is targeted for mid to late 2006.

Deer Creek’s long-range plans have included two steam-assisted gravity drainage projects of 30,000 bpd each and one mining project of 100,000 bpd, exploiting a lease with in place reserves of 7.5 billion barrels.