Canada: Oh Canada - Significant Developments In Canadian Energy, July 2012

Oil Sands News

1. According to the Alberta Energy Resources Conservation Board (ERCB), bitumen accounted for 78% of Alberta's total oil output in 2011. Production of light oil from tight rock is now up by 175,000 bpd relative to what would have been expected without the new completion technologies. Bitumen production in 2011 grew by 15% in the Athabasca region, 12% in the Cold Lake region and 2% in the Peace River region. The ERCB predicts bitumen output will more than double to reach 3.7 million bpd by 2021. The ERCB expects upgraded and non‐upgraded bitumen will make up about 90% of Alberta's total oil production by 2021.

1. Birchwood, a Calgary based private company founded in 2010, has filed a project summary with provincial regulators for a 5,000 bpd Steam Assisted Gravity Drainage (SAGD) oil sands project. If approved according to schedule, the project, located west of Cold Lake, will start up in the first quarter of 2015 at an estimated cost of $230 million. Simulations indicate that initial oil production rates will be around 400 or 500 bpd. The company intends to develop 12 hectares of land to drill for primarily heavy oil.

1. Nexen, a Calgary based oil and gas company, has agreed to be bought out by the state owned China National Offshore Oil Company (CNOOC), China's top offshore oil producer. The ambitious acquisition will cost $15.1 billion. The day after the deal was announced Nexen stock jumped 54% in value. The Nexen board has unanimously approved of the deal, however, the project must still undergo shareholder and regulatory approval. Nexen's second quarter production averaged 213,000 bpd of oil. If the takeover deal succeeds, CNOOC will base the headquarters for its North American and Caribbean operations in Calgary, Alberta.

1. PETRONAS, a Malaysian company, has agreed to buy all of Progress Energy's outstanding common shares at a cash price of $20.45 per share. Progress Energy is a Canadian exploration and production company focused on natural gas development in BC and Alberta. The transaction is valued at $5.5 billion, and received unanimous approval from the Progress' board of directors. The Canadian operations for the company will remain in Calgary and the company will have a commercial office in Vancouver for LNG development. The acquisition is part of PETRONAS' strategy to become a global leader in LNG. The development is expected to generate substantial economic benefits for the provinces and local communities due to the increased access to capital PETRONAS has.

1. Smart Sand, a leading supplier of industrial sand for the oil and gas industry, has partnered with Canadian Pacific Railway (CPR) to build a new frac sand transload facility to serve Bakken shale producers in the Williston Basin located in Southern Saskatchewan. The two companies will supply and ship precious frac sand to the unconventional oil and gas regions. CPR is the only North American railroad to serve the Bakken formation, the Alberta industrial heartland near Edmonton, and the Marcellus Shale located in the north‐eastern United States.

East Coast News

2. GRI Simulations, a Canadian company focused on providing simulation technology for offshore oil construction and production, has secured $250,000 funding from the Research and Development Corporation (RDC), a Newfoundland Crown Corporation, to develop a 3‐D software kit that will allow oil companies to simulate oil field design. The software provides numerous advantages to oil companies to improve efficiency in the design, fabrication and installation of fields and components in a variety of harsh environments. The provincial government allocated $19 million to RDC as part of the 2012 provincial budget.

West Coast News

3. The excellent results for the Liard Basin located in Northern British Columbia released last month by Apache will require development of export facilities. According to the Federal Energy Regulatory Commission, a key to developing LNG export facilities will be to send the gas to places where oil prices are higher, such as Korea and Japan. The resources in the Liard Basin will need to be harnessed properly to meet its tremendous productive potential. Edward Kallio, director and a gas consultant with Ziff Energy Group notes that "it's imperative that we continue to develop these LNG liquefaction proposals". To ensure that the Liard Basin comes onstream, Kallio believes export capacity will need to be applied for and built.

3. Spectra Energy has officially opened the Dawson processing plant in Bessborough, British Columbia. The 200 mmcfpd processing plant is being installed in two phases. Spectra is poised to invest an additional $4‐$6 billion in British Columbia beyond 2015. Accessing the natural gas in the Montney play enables critical processing and pipeline services to customers and sets the foundation for further investment in British Columbia.

Canadian Arctic News

4. MGM Energy, a Canadian oil and natural gas exploration company, has entered into a farmout agreement with Shell whereby Shell has agreed to fund the drilling and completion of two wells in the Northwest Territories. MGM's stock rose by 41% after the agreement was publically announced. The wells will be built in the Central Mackenzie Canol shale oil play. Shell will earn a 37.5 percent share in the licenses for the wells. The President of MGM Energy, Henry Sykes, stated "We are extremely excited about the Canol shale play, and this agreement provides us with the ability to assess its potential."

5. Kivalliq Energy, a uranium exploration and development company, is the first in Canada to sign an agreement with the Inuit to explore for uranium on their lands. The $20 million exploration program at the 252,830 acre Angilak Property in Nunavut. Three recently identified new zones include: the Western Extension Zone, which was extended to 365 vertical metres for radioactive intercept; the Southwest Zone, which was discovered at 300 metres and the Pulse zone intersected radioactivity; and the Pulse zone, which intersected radioactivity in 14 of 27 holes. Ongoing aggressive exploration will investigate multiple uranium targets discovered in 2010 and 2011 prospecting programs.

Alternative Energy

6. International Power Canada (IPC) has commenced construction on a $50 million project, called the Brockville Solar project. It is located in the Township of Elizabethtown‐Kitley, in Eastern Ontario. The project will have a capacity of 10 MW, sufficient to serve 1,700 Ontario homes annually. IPC and its affiliate companies operate 362 MW of wind farms in the Maritimes and Ontario, and have another 300 MW of wind farm projects under construction in Ontario and British Columbia. This is IPC's first solar powered project. The project is expected to begin operation early in 2013.

7. Northland Power, a green power generation company operating primarily in the provinces of Ontario, Quebec and Saskatchewan, has secured financing for the construction of six 10 MW projects in eastern and central Ontario. Each of the six projects will be built on 85 acres of land. Northland Power expects that the facilities will begin commercial operation in 2013. Northland also has seven additional projects, totalling 70 MW, currently in the permitting process. The facilities operated by Northland Power generate over 1000 MW of electricity.

7. NorthGrid Solar, an engineering, procurement and construction company based in Ontario, is nearing completion of the first phase of its 1.7MW rooftop solar agreement with The Valecon Group, a commercial property developer. The projects are located in Hamilton and Burlington, Ontario. The first phase to be completed in fall of 2012 consists of 564kW and the second phase to be completed in the spring of 2013 with 1.14 MW (DC). NorthGrid is a leading provider of turn‐key rooftop solar systems, with 60 years of photovoltaic experience in Ontario. The project uses a proprietary Elevated Truss System to address concerns with roof capacity, density, maintenance and thermal losses

On the Horizon

The President of Penn West Petroleum believes that industry can increase light oil recovery from the Cardium formation in central Alberta by between 1.1 and 2.6 bbbl. Alberta is developing a gas strategy focusing on expanded domestic uses for the fuel, including the potential use of natural gas vehicles. Sasol Limited has partnered with Talisman to research converting Western Canadian gases to fuels to enable more widespread use. It is expected that a 48,000 bpd gas‐to‐liquids plans would create 7,000 temporary construction jobs and nearly 500 permanent positions.

Laricina Energy has made progress in demonstrating that thermal extraction of bitumen from the Grosmont carbonate formation is commercially possible. The pilot has used SAGD well pairs with steam cycles in both the injector and producer wellbores. This pilot program is being closely watched because no one has managed commercial bitumen production from Alberta's carbonate formations, which are estimated to hold more oil that the oilsands. The results support that there could be a 10,700 bpd expansion with cyclic steam stimulation. Laricina is evaluating incorporating this into its regulatory application.

Operators of Cyclic Steam Stimulation (CSS) wells are required by ERCB to run periodic casing integrity tests. These tests costs about $50,000, mainly because the process requires that a day's production time be lost. Dale Kunz, an engineer, believes he has come up with a solution to the integrity test that eliminates the use of an inflatable packer used in the test for an annular eutectic salt plug. Once the test is done, nitrogen would be inserted dissolving the plug and allowing production to start back up again in 5‐6 hours. The installation of such a system would cost approximately $80,000; however, once the tests are complete, the cost is a low $4000, which over time can lead to significant savings as a result of the wells being brought back into production sooner.


In this newsletter, all dollar amounts are Canadian dollars unless otherwise stated. We have also used the following abbreviations: bpd ‐ barrels per day; boepd ‐ barrels of oil equivalent 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
23 Oct 2018, Other, Toronto, Canada

Dentons and SheEO are coming together for an evening of #radicalgenerosity on October 23, 2017. Meet Vicki Saunders, Founder of SheEO, and learn about how SheEO is changing the landscape for female entrepreneurs.

23 Oct 2018, Seminar, Montreal, Canada

Dentons is pleased to invite you to join us for a breakfast seminar as part of the Les Matinées Dentons series on issues relevant to you and your business.

24 Oct 2018, Other, Toronto, Canada

If you build it, claims may come. Join the Dentons Construction group for breakfast and an informative discussion on current topics in construction law.

Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions