Germain (like Saleski) is located within the West Athabasca oil sands region and lies approximately 130 kilometres southwest of Fort McMurray, Alberta. The main reservoir target is within the Grand Rapids Formation, a regional marine deposit at an average depth of 225 metres which comprises the upper part of the regressive Upper Mannville Group and consists dominantly of thick sandstones. Its unique features are clean sand with a homogeneous and continuous reservoir pay zone (the bitumen-bearing portion) between 10 – 25 metres thick. These features increase the predictability and consistency of the reservoir. Laricina intends to use its proprietary solvent-cyclic SAGD (SC-SAGD) process to recover the bitumen.
The secondary target is the Winterburn Formation, a bitumen-bearing carbonate complex that lies approximately 200 metres beneath the Grand Rapids. The Winterburn has favourable reservoir properties and high oil saturation. Laricina will lever the existing infrastructure at Germain to develop the underlying Winterburn Formation and plans to use a thermal recovery process such as cyclic-steam stimulation (CSS) or modified SAGD.
The Germain leases total 17,920 hectares which Laricina holds 96 percent working interest. Laricina first entered this area in 2006 and over the following several winter seasons drilled a number of stratigraphic test wells to delineate the reservoir and also began to construct surface infrastructure such as an all-weather road.
In November 2009, Laricina filed a 5,000-barrel-per-day Commercial Demonstration Project amendment to the pilot. The amended plan proposed to increase bitumen production as well as incorporate solvent injection, diluent treating and water recycling. These amendments are expected to result in improved product value and a lower steam to oil ratio and carbon emissions for the same volume of bitumen produced by thermal processes alone.
In October 2010, Laricina’s Commercial Demonstration Project received regulatory approval from the Energy Resources Conservation Board (ERCB) and Alberta Environment to proceed with the project.
Front-end engineering to transition from basic SAGD to solvent-cyclic SAGD is complete and detailed engineering was launched in mid-October 2010. Civil construction and infrastructure work, as well as the drilling of observation, water source and disposal wells was completed early 2011. Following detailed engineering, the key remaining steps for the project are: procurement which is underway, skid-mounted module fabrication and field construction/installation which will start early 2012. The drilling of the first 6 of 10 horizontal well-pairs was completed in November. Laricina is targeting steam injection in early 2013.
The environmental work or Environmental Impact Assessment (EIA) for the next three phases of expansion to 155,000 barrels per day at Germain has been completed and we submitted the regulatory application in November.2011. The expansion will be constructed in three phases of development (Phase 2-4) consisting of a 30,000 barrel-per- day facility, while Phases 3 and 4 will each consist of a 60,000 barrel-per-day facilities. The Commercial Demonstration Project will be the first step to move Laricina towards full commercial production that the Company estimates will total more than 200,000 gross barrels of bitumen per day.