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Grizzly files Algar Lake oil sands plans

By OGJ editors
HOUSTON, Mar. 4
-- Grizzly Oil Sands ULC submitted applications to the Alberta Energy Resources Conservation Board and Alberta Environment for developing the 11,300 b/d Algar Lake steam-assisted gravity drainage oil sands project.

The project is about 45 km southwest of Fort McMurray and near the JACOS Hangingstone and Connacher Great Divide oil sands developments.

The project will have an average 10,000 b/d production capacity during its 30-year life, according to Gulfport Energy Corp., an Oklahoma City-based independent that holds about a 25% interest in Grizzly.

Gulfport described the project as consisting of two 5,000 b/d plants and 40 well pairs on four well pads. It said upon regulatory approval, Grizzly intends to construct the first phase consisting of one modular central processing facility, ten well pairs on one well pad, and associated roads and pipelines. These would be followed in 2 years by a second modular central processing facility and ten addition well pairs on one well pad.

Gulfport said the initial gross capital cost of each phase will be about $120 million. To maintain production, the project also will require an addition well pad for each phase every 5 years at an estimated cost of $35 million/pad.

During the project's life, Grizzly plans to drill about 100 well pairs from 10 well pads. It expects each well pair to produce for 5-7 years.

Engineering firm McDaniel & Associates has estimated that the project will recover about 89 million bbl of bitumen.

Grizzly expects regulatory approvals within 12-18 months and to start production in about 18 months after obtaining the approvals.

Grizzly started delineating the area during the 2007-08 winter season and has subsequently drilled 61 core holes and shot 3D seismic on the acreage.


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