Canada: Oh Canada - Significant Developments In Canadian Energy - September 2011

Last Updated: October 12 2011
Article by Doug Black, Anne Calverley, Douglas Crowther, Bill G. Gilliland and Alex MacWilliam

Oil Sands News

1. Sunridge Energy has entered into a binding letter agreement with Current Environmental Solutions LLC ("CES") for a five year exclusive license of proprietary CES technology. The technology, called six-phase oil heating, was initially developed by CES for remedial hydrocarbon cleanup, and was commercialized in 1997. The process involves heating electrodes underground, generating steam by adding current to the electrodes and bringing hydrocarbons up through collection wells. The technology is reported to have achieved recovery rates exceeding 70 percent at more than 50 different locations worldwide. Sunridge plans to commence two pilot projects this fall, noting that the licensed technology is ideal for plays that are too deep for surface mining and too shallow for steam-assisted gravity drainage ("SAGD").

1. Connacher Oil and Gas reported daily bitumen production for July and August at its Great Divide play in the range of 13,000 bpd to 14,000 bpd. The company also reported success on two of its pilot project wells at Algar, which are employing SAGD+ (steam and solvent injection). Following those successes, Connacher is conducting a more detailed technical assessment in consideration of adding two additional wells to the pilot project. The company anticipates both completing the technical assessment and receiving regulatory approval for its Environmental Impact Assessment and expansion application to expand the capacity at Algar to 24,000 bpd by the end of 2011.

East Coast News

2. Contact Exploration's investment in the Stoney Creek field is seeing positive returns with aggregate production from two horizontal wells continuing above 100 bpd, with realized netbacks of an estimated $70 per bbl. In late 2010, Contact confirmed strong oil production rates and netback on the Stoney Creek wells and ongoing production optimizing activities have proven effective.

West Coast News

3. Following two years of appraisal drilling, Penn West plans to transition to horizontal multi-stage frac development drilling and expects to drill as many as 500 wells in 2012 in its four tight oil plays (Cardium, Viking, Spearfish and the carbonates). Looking to next year, Penn West projects that 85 percent of its capital budget will be dedicated to tight oil development drilling. By the end of 2011, the company anticipates that 66 percent of its total production will be from liquids (51 percent light oil). In the carbonates alone, the company is experiencing tight oil production from 200 bpd to more than 500 bpd. In the company's Spearfish play, production is currently 5,000 boepd and is expected to increase to more than 13,000 boepd by 2013.

3. Lone Pine Resources reported significant Crown land purchases in its Evi light oil play in the Peace River Arch, increasing its land holdings by more than 30 percent to 65,440 acres. The company has drilled 12 net horizontal wells in the area with a 100 percent success rate. Lone Pine anticipates average sales volumes for the third quarter of between 97 mmcfpd and 100 mmcfpd equivalent (105 mmcfpd to 108 mmcfpd equivalent working interest), which equates to an almost five percent improvement over the previous quarter. For the second half of 2011, the company expects to meet its predicted net sales volumes guidance of 98 mmcfpd to 102 mmcfpd equivalent (108 to 112 mmcfpd equivalent working interest). At Evi, the new wells are producing at an average initial peak rate in excess of 300 bpd.

3. NAL Energy reported average production volume for August of 29,000 boepd, as compared to the average volume of 26, 758 boepd in the second quarter. The company expects to drill 30 (18 net) wells in Cardium in 2011, in which area production has increased from 750 boepd at the end of 2008 to what is anticipated to be 3,200 boepd by the end of this year. In the company's Lochend Cardium program, NAL plans to drill six (four net) wells this year, four of which have been drilled and two of which were recently completed and tied-in. Production from those two wells is expected to approximate 200-400 boepd, and all six wells are anticipated to be on-stream by the end of the year.

Canadian Arctic News

4. According to Northern Cross (Yukon) and Yukon Energy, Yukon's power needs will double in the next decade as demand for power and energy is rapidly growing with the increased investment in mining. Located on the 125 km by 1,200 km Titina Gold Belt, which expands from northern British Columbia to southwest Alaska, Yukon is an attractive hub for mining companies. The department of Yukon Energy, Mines and Resources states that the government is looking to attract natural gas producers, and is already involved in feasibility studies.

Alternative Energy

5. The Province of Nova Scotia announced this month that they are developing a strategy on marine renewable energy, with a focus on tidal power and offshore wind. The strategy is based on a report by Dalhousie University oceanographer Bob Fournier, which outlines numerous recommendations and details a comprehensive approach to developing the abundant ocean energy resources off Nova Scotia's coast.

A report from Geological Survey of Canada forecasts that geothermal energy resource is a potential upcoming source of renewable, sustainable energy in Canada. According to the report, the current geothermal energy resources are estimated to exceed one million times Canada's current electrical consumption, although current technology allows only a portion of this energy to be produced.

On the Horizon

Enbridge has announced plans to increase capacity on the Athabasca Pipeline by twinning the southern section between Kirby Lake and the Hardisty crude oil hub. The company intends to add 345 km of 36-inch pipeline alongside the existing 30-inch line, which the company announced last fall would be expanded to its maximum 570,000 bpd capacity. Initially, the twinning project will increase the Pipeline's capacity by about 450,000 bpd, and the new line will have the potential to expand to 800,000 bpd. The company expects that the new line will begin accepting initial volumes early in 2015, and will reach full initial capacity by 2016.


In this newsletter, all dollar amounts are Canadian dollars unless otherwise stated. We have also used the following abbreviations: bpd - barrels per day; mmcfpd - million cubic feet per day; bcfpd - billion cubic feet per day; tcf - trillion cubic feet; bbl - barrel; mbbl - thousand barrels; mmbbl - million barrels; bbbl - billion barrels; boe - barrels of oil equivalent; MW - megawatts; kV - kilovolt; km - kilometer; KW - kilowatts; KWh - kilowatt hours; cmpd - cubic meters per day; GJ - gigajoule.

About Fraser Milner Casgrain LLP (FMC)

FMC is one of Canada's leading business and litigation law firms with more than 500 lawyers in six full-service offices located in the country's key business centres. We focus on providing outstanding service and value to our clients, and we strive to excel as a workplace of choice for our people. Regardless of where you choose to do business in Canada, our strong team of professionals possess knowledge and expertise on regional, national and cross-border matters. FMC's well-earned reputation for consistently delivering the highest quality legal services and counsel to our clients is complemented by an ongoing commitment to diversity and inclusion to broaden our insight and perspective on our clients' needs. Visit:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
25 Nov 2016, Seminar, Toronto, Canada

On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.