Connacher Oil and Gas Limited is a Calgary-based exploration, development and production company active in the production and sale of bitumen, crude oil, natural gas and natural gas liquids. Connacher’s shares trade on the TSX under the symbol CLL. Connacher’s principal asset is a 100 percent interest in approximately 87,000 net acres of oil sands leases in the Athabasca oil sands fairway, situated primarily southwest of Fort McMurray, Alberta.
The Company's main oil sands lease block, Great Divide, contains approximately 500 million barrels of proved plus probable bitumen reserves. The Company’s first two notional 10,000 barrels-per-day (bbl/d) steam-assisted gravity drainage (SAGD) oil sands projects, Pod One and Algar, are currently producing. Pod One commenced commercial production in March 2008, just four short years from first purchase of lands in the region. Algar was completed in April 2010, ahead of schedule and under budget.
In addition, Connacher's holdings southwest of Fort McMurray include 100 per cent working interests in the Thornbury and Quigley oil sands leases.
Exploration and delineation core hole drilling and three-dimensional seismic programs have been conducted at Great Divide in anticipation of expanding SAGD bitumen production capacity from a notional 20,000 bbl/d of capacity to 44,000 bbl/d of capacity. In September 2012 Alberta's energy resources development regulator approved the Great Divide expansion project.
Connacher also owned conventional crude oil and natural gas production and reserves in Alberta and owned and operated a 9,500 bbl/d heavy oil refinery located in Great Falls, Montana. As a result of the Company's strategic planning process, these assets were sold during 2012.
The SAGD method utilized by the Company is an in-situ extraction method as opposed to a surface mining method. SAGD has been in use for more than 20 years and has been widely applied in the Athabasca oil sands. The method involves drilling a pair of horizontal wells which extend for approximately 600 to 800 metres near the base of the bitumen reservoir. The upper well is the steam injection well and the lower well is the producting well, located generally five metres below the injection well. Steam is continually injected into the injection well. This process creates a steam chamber in the reservoir to liberate the bitumen, which then drains by gravity into the producing well.
Injection/producing pairs of wells are drilled into the bitumen reservoir. The un-steamed areas between pairs are heated over time by conduction. New producing wells, known as infill wells, can be drilled between existing injection/producing pairs of wells at the base of the reservoir. The heated areas (the yellow areas in the diagram) can be drained with cyclic steam. It is expected that peak production from an infill well will be about half that from a typical injection/producing well pair.
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