Saleski

Saleski (like Germain) is located within the West Athabasca oil sands region and lies approximately 100 kilometres southwest of Fort McMurray, Alberta. The target zone is the Grosmont Formation, a dolomitized, shallow marine and tidal flat carbonate complex lying at a depth of approximately 325 metres. The Grosmont is characterized by extensive vertical fracturing, karsting and high permeability, i.e., excellent reservoir characteristics. The targeted horizons within the Grosmont Formation are the aerially extensive C and D units, which have a combined gross pay thickness of over 40 metres.

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The Saleski leases cover a total area of 17,152 gross hectares. Laricina holds a 60 percent working interest and is the project operator. Since acquiring the lease, we have carried out an extensive delineation program to determine the extent of the reservoir and better understand its physical characteristics. Laricina has determined that modern horizontal well SAGD technology is a viable recovery process for this reservoir.

On July 22, 2009, Laricina received approval from the Energy Resources Conservation Board (ERCB) and Alberta Environment to proceed with the Saleski SAGD pilot. This was a huge milestone in Laricina’s development as it was the Company’s first project approval. On September 25, 2009, Laricina filed an amendment which proposed to add solvents to the base SAGD process. This amendment was approved by the ERCB on April 30, 2010. The addition of solvents will help to lower steam requirements while maintaining bitumen production rates, improving the steam to oil ratio.

The 1,800 barrel-per-day capacity Saleski pilot consists of a central processing facility with diluent treating. Two 50MM BTU steam generators and water treating train, and a solvent injection / recovery system all tied to the first 2 of 3 SAGD well-pairs on an adjacent pad. Only steam will be injected into the well-pairs during the first year in order to validate steam chamber development in the Grosmont carbonate reservoir and to gather baseline temperature, flow and production information. This will be followed by the injection of solvents with reduced steam.

Following the July 2009 approval, Laricina moved quickly at Saleski. Detailed engineering was completed in the fourth quarter of 2009 with construction taking place over 2010. Two of the well pairs were drilled into the D zone at 360 metres and one into the C zone at 377 metres. Steam injection commenced on December 22, 2010 with production from the world’s first SAGD carbonate project in the spring of 2011.

Saleski will be the world’s first carbonate project utilizing SAGD technology to produce bitumen from Alberta’s Grosmont Formation. The purpose of the pilot is to allow Laricina to better understand the geological framework and technology necessary for commercial-scale, long-term oil recovery from the Grosmont. Interest in the Grosmont lies in the fact it is estimated by the ERCB to contain approximately 406 billion barrels of bitumen and is the second largest bitumen-bearing formation in Alberta.

Laricina is exploring further recovery techniques at Saleski. The stacked zones of the Grosmont carbonates are ideal for the use of Laricina’s new, patented-heat harvesting technique, known as passive heat assisted recovery methods (PHARM). With a successful application of PHARM, heating the Upper Grosmont D zone would generate incremental production from the lower zone, Grosmont C. Laricina expects this technique to further lower the steam to oil ratio for the project, thereby reducing water and natural gas requirements even more.

Already Laricina is looking beyond the pilot to commercial scale production from the Grosmont Formation. Engineering and regulatory information requirements were submitted in December of 2010 to expand Saleski to 12,500 barrels per day production capacity.

Where Energy
Meets Innovation

Laricina is advancing in situ technology and innovation, through its forward thinking approach and practices. Our ideas begin with people whose knowledge is based on years of in situ experience, redefining and shaping several of the processes we are implementing today.

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