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Laricina Energy Ltd. (“Laricina” or the “Company”) announced today that it has received Energy Resources Conservation Board (“ERCB”) approval for the Company’s Stony Mountain Pipeline (“SMP”) project.
“The SMP is the first regional pipeline in west Athabasca servicing the emerging Grand Rapids and Grosmont plays,” said Glen Schmidt, President and CEO of Laricina. “Bitumen production volumes from in situ oil sands projects in the area are expected to increase in the near to midterm. A permanent transportation solution beyond trucking and rail will be required to continue to develop the region efficiently and economically. Beyond Laricina’s own bitumen production volumes from Saleski and Germain, we recognize that a broader development plan is required for west Athabasca, and the SMP and other infrastructure will be needed to support expected production growth.”
The SMP project consists of; a 200,000 barrel-per-day, 24-inch diameter blended crude bitumen line; a 70,000 barrel-per-day, 12-inch diameter diluent return line; and a tank farm located approximately two kilometers northeast of Laricina’s Saleski pilot. The proposed 187-kilometer pipeline will run from Saleski in a broad U-shape to Cheecham, south of Fort McMurray. Cheecham is fast becoming a major pipeline hub for oil sands crude oil in Alberta.
The SMP’s blend line is expected to enter into service mid-to-late 2015 to coincide with expected start-up for Saleski Phase 1. Laricina’s diluent requirements will continue to be provided by truck until the diluent return line goes into service approximately a year later. A future extension of the pipeline would connect Germain to the SMP to coincide with expected start-up of Germain Phase 2.
Laricina’s current bitumen production volumes from the Saleski pilot will continue to be transported by truck and rail until the SMP comes into service, as will expected production volumes from Germain Phase 1 (scheduled for first production later this year).
The SMP’s regulatory application was filed with the ERCB in September 2012. Laricina will continue consulting with stakeholders as the Company finalizes its construction plans for the project which could begin in late 2013, subject to additional funding or other commercial arrangements. Initial capital projections for the SMP project range between $600 and $650 million. Laricina is considering a range of commercial structures, agreements and financing sources to maximize the SMP’s strategic benefits.
About Laricina Energy Ltd.
Laricina is a non-public, Calgary based, responsible energy company that will contribute supply to the growing demand for crude oil through in situ oil sands development.
Laricina’s goal is to create value by developing Canada’s oil sands using innovative in situ technologies. The Company has a diverse portfolio of oil sands assets at varied stages of development, and experienced people with the requisite technical expertise. Laricina has identified five core areas with commercial production potential in excess of 600,000 gross barrels of bitumen per day from a large concentrated resource base with 387 million barrels of probable reserves and 4.6 billion barrels of contingent plus prospective resources (best estimate) as determined by Laricina’s independent reservoir engineers. These assets include oil sands resources in the familiar McMurray Formation, and the developing Grand Rapids, and Grosmont and Winterburn carbonate plays, all of which offer significant production potential.
This information release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law including but not limited to final regulatory approval from the Energy Resources Conservation Board and Alberta Environment. Forwardlooking statements are frequently characterized by words such as “plan”, “expect”, “estimate”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on Laricina’s experience and current beliefs as well as assumptions made by, and information currently available to, Laricina, and are subject to a variety of risks and uncertainties including, but not limited to, those associated with resource definition, unanticipated costs and expenses, regulatory approvals, fluctuating oil and gas prices, and the ability to access sufficient capital to finance future acquisitions and development. Although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this information release are not exhaustive and readers are not to place undue reliance on forward-looking statements. Laricina disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this message, except as 2 required under applicable securities legislation. The forward-looking statements are expressly qualified by these cautionary statements.
For further information please contact:
Heidi Christensen Brown
Senior Analyst, Investor Relations
Laricina Energy Ltd.
East Tower, 5th Ave Place
800, 425 1st Street SW
Calgary, AB. T2P 3L8