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Sunshine Oilsands expands horizon
Gary Park For Petroleum News
Canadian startup Sunshine Oilsands has hiked the production goal for its three thermal-recovery projects in Alberta by 50 percent to 300,000 barrels per day, while continuing its efforts to land a joint-venture partner.
Chief Executive Officer John Zahary said the updated goal covers three operations in the Athabasca region of northeastern Alberta that could come onstream in the 2019-24 period.
West Ells is the lead-off project, scheduling initial commercial production within a year and eventual output of 100,000 bpd at a capital cost of C$5.3 billion.
Next in line are the Thickwood and Legend Lake projects which are now before regulators, with approvals anticipated by mid-2013. They have each been in size to 100,000 bpd each.
Others under consideration Sunshine has a number of other developments under consideration within its wholly owned and controlled Athabasca leases covering 1.15 million acres and holding 445 million barrels of proved plus probable reserves, although none have been unveiled.
Zahary told a business conference in late October that Sunshine views Asia as an “ideal market for diversifying and increasing sales over time,” predicting refineries in China and South Korea will make the shift to heavy crude processing because of the volumes that will be available.
“If you tried to move a lot of Western Canadian crude into Asia right now, it would be difficult, but I think the market is changing quite quickly, (although) the natural market for Western Canadian crude will continue to be U.S. demand over time,” he said.
Sunshine, which is listed on the Hock Kong Stock Exchange and received conditional approval Nov. 14 to list on the Toronto Stock Exchange, includes Sinopec, sovereign wealth fund China Investment Corp. and China Life Insurance Co. among its major investors.
Strategic cooperation deal The company said joint-venture discussions with Sinopec continued through the third quarter, following a strategic cooperation deal between the two companies in January to cooperate on joint development of oil sands assets in northeastern Alberta.
No timetable has been set for signing a final agreement which Sunshine said could include “other parties.”
Sunshine reported it had C$356 million of available cash at the end of the third quarter after investing a total of C$559 million on leases, drilling operations, project planning and regulatory applications. It posted a loss of C$15.5 million for the quarter, up from a loss of C$10.2 million a year earlier.
Since its initial public offering in Hong Kong, which raised HK$4.5 billion, it repurchased 61 million shares over the Sept. 16-Oct. 12 period at an average price of HK$3.08, down from a peak of HK$4.92. It is currently trading around HK$3.30.
Connacher In a separate oil sands development, Connacher Oil and Gas said the sale of its Montana refinery and conventional assets in Alberta will partly cover its 2013 capital budget of C$95 million to boost output at its Great Divide thermal recovery operation in northern Alberta.
The project produced 10,700 barrels per day in September, 54 percent of its design capacity of 20,000 bpd. Connacher has approval for a 24,000 bpd expansion, but needs money to complete that phase.
For the third quarter, its bitumen production dropped to 11,500 bpd from 13,500 bpd a year earlier.
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