Grizzly Oil Sands begins SAGD production at Algar Lake

Grizzly Oil Sands ULC, Calgary, has begun steam injection at its Algar Lake project in Alberta. The company said oil production “is evident in steam circulation fluids.”

The steam-assisted gravity drainage project is about 60 km southwest of Fort McMurray. Grizzly holds 100% working interest in 56,960 contiguous acres.

Grizzly said Algar Lake has been explored with 65 cored delineation wells and 16 appraisal wells, along with 2D and 3D seismic. The reservoir lies at about 225 m, with as much as 20 m of net pay along a continuous channel.

Grizzly filed the regulatory application for the first two phases of development at Algar Lake in 2010 (OGJ Online, Mar. 4, 2010). It was approved by Alberta regulatory authorities in December 2011.

The initial 10 horizontal well-pairs for Phase 1 were drilled and completed from a single pad in mid-2012. Field assembly of the central processing facility concluded in summer 2013. Initial steam injection began in January.

Grizzly said Phase 1 should reach peak production of more than 6,000 b/d in early 2015.

Construction of Phase 2 will be evaluated when Grizzly obtains its next round of equity financing.

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