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Athabasca Oil Corp makes progress at thermal properties

Athabasca Oil Corp makes progress at thermal properties

Intermediate producer Athabasca Oil Corp provided an update this week on its Leismer and Hangingstone oil sands facilities, located near the hamlet of Conklin south of Fort McMurray, Alberta.

 

Hangingstone

The Hangingstone SAGD facility produced 8,760 bbl/day in the third quarter, rising to 9,500 bbl/day in October. 

The facility has a nameplate capacity of about 12,000 bbl/day but maintenance activities during the quarter dampened production volumes. Operating costs averaged $9.10/bbl (ex-energy) bringing netbacks to about $2.90/bbl.

Hangingstone achieved first oil during the third quarter of 2015. The company says it expects to continue increasing production with minimal capital spend over the next several years. Optimization work at the facility includes the potential addition of flow control devices (FCDs), which has already proven successful at the Leismer facility.

 

GRAPHIC COURTESY ATHABASCA OIL CORP

 
 

The company also says it has now settled an insurance claim related to a 19-day shutdown in the spring of 2016 due to the Wood Buffalo wildfires.

 

Leismer

Leismer produced 19,498 bbl/day in the third quarter, rising to 20,900 bbl/day in October. Operating costs averaged $9.10/bbl (ex-energy) bringing netbacks to $17.78/bbl, a 14% improvement over the previous quarter.

Athabasca says it is taking steps to "prudently manage reservoir performance and maximize profitability". A trial on the co-injection of non-compressible gas (NCG) has proven successful in reducing steam loads by 10-15%. The company says it is now evaluating implementation of the technology site-wide.

 

GRAPHICS COURTESY ATHABASCA OIL CORP

 
 

The Leismer demonstration plant and adjacent Corner lease were purchased from Statoil in December 2016. Both Leismer and Corner already have regulatory approvals in place for 40,000 bbl/day of development.

Averaged over the third quarter, Athabasca produced 28,258 bbl/day from its thermal oil sands properties. Full year guidance is expected to be between 27,000 and 29,000 bbl/day.

Operating costs for both SAGD facilities are north of $16/bbl but the company expects to bring that number down to $14 by 2020. Athabasca says it can breakeven at a WTI price of US$42 to US$45.

 

GRAPHICS COURTESY ATHABASCA OIL CORP

 

2017 capital spend is now projected at $60 million, down from an original estimate of $105 million at the beginning of the year. The company is banking on an average WTI price of about US$50.


SOURCES:
ATHABASCA OIL CORP • Q3/2017 RESULTS
ATHABASCA OIL CORP • Q3/2017 MD&A
ATHABASCA OIL CORP • NOVEMBER 2017 CORPORATE UPDATE
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