Osum continues to boost output at Orion, and plans more expansions in the near term
Privately-held Osum Oil Sands Corp announced plans to futher boost output at its Orion SAGD facility, located in the Cold Lake region, just south of Imperial Oil's Cold Lake in-situ operations.
Orion averaged about 11,000 bbl/day last year, up 37% from 2017, and exited the year at over 15,000 bbl/day. The company completed its Phase 2B and 2C expansion phases last year, taking nameplate capacity to 18,000 bbl/day. The work included the addition of a fourth boiler, two produced water evaporators and 18 new well pairs.
Osum says it sees more opportunities to further debottleneck the SAGD facility. Scoping and planning activities for Phase 2D are already underway, which will see the addition of more well pairs, another boiler and a second waste water treatment plant. This latest phase of expansion should take production over 20,000 bbl/day. Execution of Phase 2D will be timed to allow funding through internal cash flow.
The company voluntarily cut production at the end of last year due to a lack of egress space on take-away pipelines. Capital spending has therefore been trimmed as netbacks went negative at the end of last year. Osum relies on hedging some of its production to reduce its exposure to the heavy oil differential.
Orion was purchased from Royal Dutch Shell in 2014, and already has regulatory approvals in place for 20,000 bbl/day of production.
Beyond Orion, the company already has regulatory approvals in place for its nearby Taiga lease, also located in the Cold Lake area. Taiga is currently planned to be executed in three phases, bringing Osum’s total output to about 55,000 bbl/day.