Derrick recorded nearly $14 billion worth Canadian packages put for sale by Connacher Oil & Gas, ConocoPhillips, Talisman, Birchcliff Energy, EnCana and Cenovus Energy. The $14 billion includes only the large packages estimated at greater than $1 billion. For more visit us:
Cenovus Energy Inc is looking for a JV partner for its Telephone Lake oilsands project and expects to have an update on its search by the end of March. Continue reading here..
Cenovus Energy Inc. is planning to accelerate development of its oil sands and conventional oil properties, targeting output of half a million barrels per day within 10 years. The company has approved a 2011 strategic plan that builds upon its original strategy created in 2010 and establishes new timeline and significant oil production increases for the next decade.
The plan targets:
- Total oil production of about 500,000 bpd net by the end of 2021
- Oil sands production of more than 400,000 bpd net by the end of 2021, about six times greater than current oil sands production
- Conventional oil production of 120,000 bpd to 130,000 bpd by the end of 2016, nearly double current production of about 70,000 bpd
- A new oil sands project phase expected on stream every 12 to 18 months
- An increase in total production capacity at Foster Creek to between 270,000 and 290,000 bpd gross, through increased production capacity at phases F, G and H and future phases
- Drilling about 450 stratigraphic (strat) wells per year for the next five years to prepare for the development of oil sands opportunities
- Doubling of net asset value in the 2010 to 2015 timeframe
"We now have five phases at Foster Creek and three at Christina Lake operating with design capacity of 178,000 barrels per day. We have regulatory approval in place for projects under construction to get to about 440,000 barrels per day of operating capacity on a gross basis" said Brian Ferguson, Cenovus CEO
- $1.8 B committed capital
- $0.1 B one-time costs
- Ability to utilize balance sheet to fund additional opportunities
- $700 MM of additional opportunity capital includes:
- 440 strat wells drilled in Q1
- scalable conventional oil & natural gas programs
- expand drilling program at Pelican Lake
- future oil sands expansions
- $600 MM of 2011F capital contributes to 2011F production
- $300 – 500 MM of potential divestiture proceeds not included in budget
Cenovus was formed on 2009 from the split of Encana Corporation into two independent publicly traded energy companies: one an integrated oil company (Cenovus), the other a natural gas company (Encana). The company had operations in Athabasca region of Northern Alberta and southern Saskatchewan.
Cenovus posted increase in oil sands results for the first quarter 2011. The company’s quarterly production was 137,355 boepd, up 5% from the same period last year. Cenovus’s oil sands segment (66,828 bpd) posted 14% production increase over Q1 2010 (58,546 bpd). However the company’s natural gas production was 652 MMcfpd for Q1 2011, down 16% over Q1 2010. The Company’s strategy is to focus on the development of its substantial crude oil resource in Alberta and Saskatchewan. Cenovus is looking primarily in developing the land position in the Athabasca region in northeast Alberta.
Cenovus reportable E&P segments include Oil Sands and Conventional. Oil Sands, which consists of Cenovus’s producing bitumen assets at Foster Creek and Christina Lake, heavy oil assets at Pelican Lake, new resource play assets such as Narrows Lake, Grand Rapids and Telephone Lake, and the Athabasca natural gas assets. Conventional, which include development and production of conventional crude oil, natural gas and NGLs in Alberta and Saskatchewan.
Expansion phases C and D at Christina Lake continuing to progress on target with expected first production at phase C in the third quarter of 2011 and at phase D in early 2013; and Additional progress on the CORE project at Wood River with coker start up expected in the fourth quarter of 2011.
Cenovus Plans to invest $1.7 billion - $1.9 billion for the rest of 2011
Oil Sands capital investment for Q12011 was primarily focused on facility spending at both Foster Creek and Christina Lake related to the next phases of expansion. The company drilled 440 gross stratigraphic wells during the quarter. Conventional capital investment in the quarter was focused on the continued development of conventional oil properties.
In Feb 2011, Cenovus announced for a venturing partner to develop oil sands holding and boost the value of reserves. The company will get $3 billion, assuming 50-50 JV. On a gross basis, about 260 of the assessment wells were drilled at the company’s oil sands properties in 2010 and an additional 450 strat wells are expected to be completed in 2011. In addition, Cenovus has identified 10 other oilsands projects - Narrows Lake, Grand Rapids in the Greater Pelican region and Telephone Lake project in the Borealis region for future development.
ConocoPhillips’ Canadian president, Joe Marushack said, "ConocoPhillips Canada will go in full-speed ahead on its Alberta in situ oilsands investments this year while choking back spending on its natural gas business and maintaining support for liquids-rich conventional plays. The dramatic drop in gas prices, which at $4/MMBTU are a fraction of their level of several years ago, has forced substantial changes at the US energy giant. Late last year, it closed off the taps on 12% of its Canadian gas output for three months. ConocoPhillips is not the only company transiting from gas focus to oil focus but also other majors like Chesapeake, EOG Resources, etc.,
The company also intends to continue selling some non-strategic assets from its gas-heavy Canadian portfolio, although it's not huge numbers compared to the overall size of its operations. “If you go back to 2008, folks were drilling under the assumption of $8 gas. That’s a very different capital profile than what you’d use when you have $3.50 gas,” Mr. Marushack said.
The company’s primary focus remains on the oil sands, despite selling its 9% stake in Syncrude Canada– a transaction with Sinopec that netted it $4.65-billion. ConocoPhillips is investing heavily in developing new oilsands projects. Its expansion comes both through its 50% partnership with Cenovus Energy on several projects, and its Surmont development, which it owns with Total E&P Canada. Last year, ConocoPhillips began work on the second, 83,000 barrel-per-day phase of Surmont. The company is also spending heavily on new technology in the oilsands, where Mr. Marushack said improving environmental performance has become a key goal. Last month, ConocoPhillips, announced a $13.5-billion US capital budget for 2011, with about $6 billion to be spent on North American exploration and development. The following graph shows the trend of oilsands deals since 2006..
A list of the oilsands deals in 2010 captured by Derrick Petroleum
