Unleashed: How tiny Osum is pushing SAGD performance well beyond the record of a global super major

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Of all Alberta’s operating SAGD projects, Orion has never really stood out as an incredibly high performer.  But if Osum Oil Sands keeps the project’s new momentum going, that is set to change.  And that means a lot for a junior producer in a challenging market.

Located in the Cold Lake oilsands deposit, the Orion facility builds on some of the longest SAGD history in the oilsands.  In March 2006, a small company called BlackRock Ventures initiated construction of the 10,000 bbl/d commercial project following nine years of successful operations at its two-well Hilda Lake Pilot.  But BlackRock had other assets too, including an 80,000-acre-plus land position in the Peace River region that was highly attractive to Royal Dutch Shell.  In June 2006, Shell acquired BlackRock for $2.4 billion, and although the main target was Peace River, Orion came with the deal.

Shell started up Orion in 2007, ramping up to 22 wellpairs on stream in 2010.  During this time, production grew to about 4,000 bbl/d, and then slowly increased to about 6,000 bbls/d by the end of 2013.  According to data from the Alberta Energy Regulator (AER), the project’s steam to oil ratio (SOR) generally hovered between 4:1 and 6:1 between 2010-13.

Measured on capacity utilization and SOR, the main metric for SAGD performance, Orion was at best in the middle of the pack, but in 2013, Shell’s optimization efforts started to reap results.  By July 2014, when junior Osum Oil Sands finalized its $325-million acquisition of the Orion asset, the AER says production had increased to approximately 7,000 bbls/d, with an SOR of 3.2:1.

Under Osum’s ownership, Orion exited 2014 producing 8,800 bbls/d with an SOR of 2.95:1.  AER data shows that from January to June 2015, a period that included a maintenance turnaround, production averaged 8,000 bbls/d with an SOR of 2.4:1.  For one stretch, Osum says Orion reached its nameplate capacity of 10,000 bbls/d.  The operations team has every intention of achieving that rate again.

Read full article here.

Recent News

  1. Waterous Energy Fund announces the final step of its acquisition of Osum Oil Sands Corp; shareholder meeting to be held April 30, 2021 to approve the transaction

  2. Waterous Energy Fund Announces Successful Take-Over Bid for Osum Oil Sands Corp., Commencement of Mandatory 10-Day Tender Extension Period, and Voluntary Resignation of Osum Directors and Officers

  3. Osum Board Withdraws its Recommendation that Shareholders Reject the Offer from Waterous Energy Fund

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