Cenovus lists oil sands, heavy oil, conventional progress

By OGJ editors

Cenovus Energy Inc., Calgary, has provided updates on its Foster Creek, Christina Lake, Pelican Lake, Telephone Lake, and Narrows Lake oil sands and heavy oil projects in western Canada.

The company hiked spending in the quarter ended June 30 to $660 million (Can.) as it also continued development of its conventional oil assets in Alberta and Saskatchewan. The quarterly outlay was up 39% year to year.

Foster Creek and Christina Lake averaged a combined 160,000 b/d gross, 38% higher than the second quarter of 2011. Christina Lake averaged more than 57,000 b/d and achieved a new daily gross production high of 64,000 b/d, 10% higher than its current gross capacity of 58,000 b/d.

Cenovus began injecting steam at phase D in the quarter and anticipates first production there in the third quarter, some 3 months ahead of schedule. When fully commissioned, phase D is expected to bring the gross production capacity at Christina Lake to 98,000 b/d.

Foster Creek output was up 3% to nearly 104,000 b/d gross in the quarter, which included a scheduled turnaround. The plant produced more than 126,000 b/d gross on several days in the quarter, exceeding its 120,000 b/d capacity. Five phases are producing and three more are under construction.

Cenovus began public consultation for a further phase that is planned to produce 50,000 b/d gross. In total, the company plans to have nine phases at Foster Creek eventually producing 295,000 b/d gross and expects that, with optimization, the total gross production capacity at Foster Creek will be as much as 310,000 b/d.

The company said it is seeing production increases at its Pelican Lake heavy oil operation due to the infill drilling program to expand the polymer flood. Production averaged more than 22,000 b/d in the quarter, 15% above the same period in 2011 when Slave Lake wild fires reduced production by 2,100 b/d.

The production increase continues to be partially offset by reduced operating pressures and shut-ins that are temporarily required to complete infill drilling between existing wells. Cenovus plans to drill 1,200-1,300 producing and injection wells in the next 5-7 years to expand the polymer flood, with production eventually to reach 55,000 b/d.

Cenovus ended its process to identify a potential partner for its Telephone Lake oil sands project and looks forward to developing the asset on its own. No financial need existed to take a partner. Goal of the process was to identify an arrangement that would provide strategic benefit to Cenovus and advance the value of the project, which is not included in the company’s 10-year plan.

Drilling results indicate that Telephone Lake is a world-class resource and has the potential to be a cornerstone project like Foster Creek or Christina Lake, Cenovus said.

Cenovus continues the Telephone Lake dewatering pilot, which is designed to test the efficiency of removing the nonpotable water overlying the bitumen in the reservoir (OGJ Online, Apr. 9, 2012). Removing this water is expected to reduce the steam to oil ratio and operating costs for the commercial project. The company commissioned pilot facilities in the quarter and expects to start water production and air injection in the next couple of months.

Meanwhile, Cenovus received approval from the Alberta Energy Resources Conservation Board for its Narrows Lake development. The approval included the option to use a combination of steam-assisted gravity drainage and solvent aided process. SAP involves the addition of a solvent to the steam injected into the reservoir to help thin the oil and allow it to flow more freely to the producing well. This would be the industry’s first use of SAP with butane on a commercial scale.

Narrows Lake is anticipated to have a gross production capacity of 130,000 b/d and be developed in three phases. Narrows Lake, just north of Christina Lake, is jointly owned with ConocoPhillips. Project sanctioning from both companies is expected by the end of 2012. Ground work for the initial phase of 45,000 b/d gross is expected to begin this fall.

Cenovus also saw growth in its conventional oil assets in Alberta and Saskatchewan in the second quarter, partly due to better operating conditions after poor weather limited access to locations in both areas in the second quarter of 2011.

Oil production in Alberta increased 14% to more than 29,000 b/d as the company continued to focus on developing new tight oil plays on its existing lands in southern Alberta. Average oil production from the Lower Shaunavon and Bakken tight oil plays more than tripled compared with the same period last year to about 6,200 b/d due to a successful drilling program, although production continues to be affected by delays in facility construction.

Cenovus completed battery construction for the Bakken area in the second quarter, while construction continues on facilities to support the Lower Shaunavon. These are scheduled to be complete in the third quarter of 2012 and are expected to reduce trucking needs.

Second quarter operating earnings were reduced by a $68 million exploration expense attributed to a decision not to carry out further work at a small exploration play called Roncott, an area outside of Cenovus’s core Bakken area. Outlays on conventional oil production were $122 million in the quarter, up 85% year to year. Cenovus continues to explore oil opportunities on its existing fee lands in Alberta.

Related Articles

Russia's NefteGazIndustriya advances refinery modernization

07/27/2015 NefteGazIndustriya LLC, through a project developer, has let a contract to CB&I, Houston, to provide equipment for work related to the moderniz...

Cidade de Marica FPSO arrives in Brazil for module integration

07/27/2015 Petroleo Brasilierio SA (Petrobras) reported that the Cidade de Marica floating production, storage, and offloading vessel is berthed at Brasa ship...

Centrica to boost gas production from Morecambe Bay

07/27/2015

Centrica PLC reported a project to boost gas production from Morecambe Bay in northwest England (OGJ Online, Jan. 31, 2012).

DOE official: LNG exports could be limited by silt-clogged waterways, ports

07/27/2015 Silt, which is increasingly filling US waterways and ports, potentially could limit US LNG exports if it is not dredged soon, a top US Department o...

OIG report: EPA needs to improve oversight of fracing with diesel

07/27/2015 The US Environmental Protection Agency needs to improve its oversight of hydraulic fracturing using diesel fuels and address any compliance issues,...

URTeC: Panel sees resiliency in unconventional space

07/27/2015 Panelists commented on future recovery of oil prices and the growth of unconventional drilling, then took questions from an overflow audience durin...

The oil sand moose

07/27/2015 Imagine a document entitled Canadian Energy Strategy in which the world "bitumen" does not appear. Or the phrase "oil sands." T...

Corruptible oil

07/27/2015 Where there's oil, there's also a good chance some level of corruption exists. Such is the case, especially, when you combine poverty and an abunda...

BHI: US rig count jumps 19 units to 876

07/24/2015

The US drilling rig count jumped 19 units to reach 876 during the week ended July 24, according to data from Baker Hughes Inc.

White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected