Grizzly Oil Sands UIC has agreed to buy Petrobank Energy & Resources Ltd.’s May River oil sands acreage in northern Alberta and plans to develop it with modular steam-assisted gravity drainage technology.
The 46,720-acre area includes a demonstration project for Petrobank’s proprietary THAI thermal in situ production technology, which the company said it is bringing to commercial use elsewhere in Alberta (OGJ Online, Nov. 21, 2008).
Privately held Grizzly said it will apply a SAGD scheme based on modular, reusable plant equipment with production train redundancy and space requirements lower than those of conventional SAGD projects.
It is using the system, which it calls ARMS (for advanced, relocatable, modular, standardized), to develop bitumen reserves at its 56,960-acre Algar Lake property 45 km southwest of Ft. McMurray. Design production capacity there is 11,300 b/d. Drilling of the first well pair is to begin soon. Steam injection is to begin in the first quarter of 2013 with production starting at midyear.
Grizzly said that after closing of the purchase from Petrobank it will apply for full field development at May River, where probable reserves have been estimated at 90.6 million bbl.
Petrobank said it will use cash proceeds from the sale of $225 million to repay bank debt.
It is focusing this year on development of heavy oil at its Kerrobert THAI project in southwestern Saskatchewan, where it is drilling 12 wells in a project with design production capacity of 7,000 b/d.
THAI development involves horizontal production wells with vertical air-injection wells drilled near toes of the horizontal producers to support combustion. The heat upgrades as well as mobilizes the heavy oil.
Both companies are based in Calgary.