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Laricina Energy Ltd. (“Laricina” or the "Company") has filed a project update to the Company’s Saleski Phase 1 regulatory application currently under review with the Energy Resources Conservation Board ("ERCB") and Alberta Environment and Sustainable Resource Development ("ESRD"). The update reflects the Company’s change to develop the Grosmont C zone at Saleski Phase 1 through a single horizontal well cyclic steam-assisted gravity drainage (“SAGD”) process.
“The Saleski pilot has shown the unique character of the Grosmont, specifically the high level of permeability and rapid mobilization of bitumen,” said Glen Schmidt, President and CEO of Laricina. “Through continued testing and evaluation, we believe the best well configuration and design for the Grosmont, specifically for Phase 1 of the commercial project at Saleski, is single horizontal wells using a cyclic SAGD process instead of a traditional dual-well SAGD design.”
Beyond the move to a single-well cyclic SAGD process, other updates to the Phase 1 application include:
To allow for additional regulatory review, first steam at Saleski Phase 1 is now targeted for the third quarter of 2015 subject to regulatory approval and additional financing. Capital costs to reflect this change are currently under review but are expected not to be any higher than the previous estimate of $660 million (gross).
Production capacity for Phase 1 at Saleski remains at 10,700 barrels-per-day and plans for solvent-cyclic SAGD are still included in the development plan.
A further operational update on the Saleski pilot and other developments at Laricina will be included in the third quarter interim report to be released mid November.
In December 2010, Laricina submitted the original regulatory application to the ERCB and ESRD for Saleski Phase 1, the first commercial phase development at Saleski. Saleski Phase 1 will expand the existing 1,800-barrel-per-day pilot by 10,700 barrels per day for a combined 12,500- barrel-per-day bitumen recovery scheme. Laricina holds a 60 percent ownership in Saleski and is the project operator. Osum Oil Sands Corp. holds the remaining 40 percent interest.
Saleski Phase 1 will be a solvent capable facility. The addition of solvents is expected to lower the steam requirements while enhancing bitumen production rates and recovery.
The proposed Saleski Phase 1 project will be located to the southwest of the pilot plant site and a number of the components constructed and used for the pilot will be used for Saleski Phase 1 (e.g. roads, fuel gas pipelines, source and disposal wells and associated pipelines, and construction and operations camp).
The new and incremental components of Saleski Phase 1 consist of:
Commissioning activities are scheduled to commence in the third quarter of 2015 with full production rates achieved within 12 months of start-up.
The Saleski pilot was originally designed for a dual horizontal well SAGD production process. SAGD production has been established in both the C and D zones demonstrating the high effective permeability in the reservoir. However, through our work over the last 22 months we determined that production performance is improved when the producer was operated under an injection and production cycling process. Laricina announced in July 2012 the evaluation of incorporating cyclic SAGD into the Saleski Phase 1 regulatory application. Current operations at the pilot continue with testing the cyclic process in both the C and D zones in addition to the first solvent injection and production cycle commenced in the P1C wellbore. The non-confidential portion of the ERCB project update will be made available on Laricina’s web site at http://www.laricinaenergy.com/operations/regulatory.html.
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.