A growing base of production in Cold Lake, Alberta.

The established Cold Lake oil sands region yields approximately 300,000 barrels daily and boasts high-quality reservoirs with better quality bitumen than the Athabasca region. A highly-skilled resident workforce, extensive transportation and pipeline infrastructure add to the advantages of operating in this area. Our core Cold Lake area assets are currently producing approximately 19,000 barrels per day, with near-term expansion plans to reach 25,000 barrels per day. Long-term plans are in place to reach 60,000 barrels per day between our Orion and Taiga projects. 

Click to view Cold Lake asset map

Orion

The Orion Project is a steam-assisted gravity drainage (SAGD) project consisting of a central processing facility and 43 well pairs. Between 2016 and 2019, Osum nearly tripled its production through a series of phased brownfield expansions. Average monthly production at Orion is more than 19,000 barrels per day. Further opportunities for debottlenecking, capacity enhancement and expansion are expected to increase production to 25,000 barrels per day.

Water recycle and reuse is a vital part of responsible thermal operations in Alberta. Orion was an early adopter of evaporative water treatment technology, which allows us to recycle close to 90% of the water we use. No fresh water is consumed in the process, only non-potable waters from deep sources. Orion is presently one of only four projects in Alberta to achieve this.

Taiga

With regulatory approval for 35,000 barrels per day, the development of the Taiga Project will be a further step in Osum’s Cold Lake growth strategy and follow the buildout of Orion. Taiga and Orion will form a concentrated project base and allow for operational, staffing and infrastructure synergies.

The Taiga Project will utilize SAGD technology with the opportunity to produce from two bitumen reservoirs: the Clearwater formation and the Lower Grand Rapids formation. Orion is an excellent operations and development analogue for the Taiga Project. This experience coupled with comprehensive delineation and seismic assessments, provides an essential understanding of Taiga’s geology.

Growth Projects

Saleski Grosmont Carbonates

Osum’s holdings in the Grosmont Carbonate formation represent significant long-term, upside potential. An emerging play, the Alberta Energy Regulator estimates that the formation holds over 406 billion barrels of oil. Osum is one of the largest resource holders, with over 16 billion barrels of bitumen resource in place.

Unlike oil sands reservoirs, carbonate reservoirs are made up of porous rocks full of cracks, fractures and open spaces filled with bitumen. While extracting bitumen from carbonates presents new technical challenges, Osum’s completed Saleski Pilot demonstrated the potential for the profitable recovery of thermal bitumen from the Grosmont formation. Commercial demonstration options will progress as the market becomes more supportive of these activities.

Technology

Technology is an important part of all in-situ operations, and Osum takes pride in researching and testing new technologies, both to increase production and meet our responsibilities to the environment.

Steam-Assisted Gravity Drainage (SAGD)

SAGD is a technique developed in Alberta to develop heavy oil resources efficiently. It was invented, piloted and commercialized in the 1990s, with a focus on the Athabasca oil sands region. SAGD uses the natural force of gravity as part of the process, with pairs of vertically stacked horizontal wells placed at the base of the oil reservoir. Steam is injected into upper well to melt the bitumen, allowing the bitumen to drain into the lower of well for easy extraction.

Through the 1980s and 90s the Cold Lake area was developed with cyclic steam stimulation, an older technology developed in California and South America in the 1950s. While both processes have their advantages, for our reservoir we believe SAGD is the most thermally efficient process, providing very high levels of recovery with lower environmental impact.

Click to view SAGD illustration

Osum never stops innovating in large and small ways to improve operations and minimize impacts. Here are some of the technological innovations we have implemented, are piloting, or have planned for upcoming expansions.

Implemented Technologies

Crystallizer

Crystallizers recover re-usable process water from salty wastewater streams that would otherwise need to be disposed. Installed in 2017, the crystallizer has increased Orion’s water recycle rate by 200 mper day and reduced offsite waste disposal, taking six haul trucks off the road every day.

Extended Reach Wells 

Extended reach drilling provides the ability to drill longer wells that can be placed with the accuracy needed for SAGD. Osum drilled Phase 2ABC extended reach wells from existing Phase 1 well pads, resulting in a 74% reduction in surface disturbance compared to the original Phase 2 design.

Piloting Technologies

Cross-flow Optimization

Even when SAGD wells near the end of their life, there is still a significant amount of oil and stored heat in the ground. Cross-flow optimization is a late-life strategy for older (10+ years) SAGD pairs, where the number of active injectors and steam usage are reduced, while still allowing for production. We are working to prove this strategy allows for better late-life oil production and lower water production rates, as well as extending the life of existing SAGD well pairs.

Vacuum-insulated Tubing 

Conventionally the tubing that carries the steam to the oil reservoir is single-walled and can be over a kilometer long. With vacuum-insulated tubing, the tubing is double walled with vacuum in between. This approach lessens the rate of heat loss to surrounding rock and ensures better quality steam arrives at the reservoir.

Future Technologies

Lower Drainage Wells

Lower drainage wells are placed below and between mature SAGD well pairs to target heated and undrained mobile oil. The utilization of lower drainage wells potentially results in an overall lower steam-to-oil ratio as well as incremental production and recovery.

Co-injection

Light hydrocarbons, naturally occurring in oil reservoirs (e.g. condensate) are mixed with injected steam. This technology has been piloted in similar reservoirs, but is not yet in full commercial development in SAGD. Some of the pilots have shown that co-injection improves oil flow in the reservoir, reduces steam use and, as a result, decreases greenhouse gas emission intensity.

Marketing and Transportation

Given the maturity of the Cold Lake region, Orion has excellent access to required markets and is fully connected to Inter Pipeline’s Cold Lake Pipeline. This system provides reliable bitumen blend and condensate transportation services and connects the Orion facility to the two largest Canadian marketing and transportation hubs at Hardisty and Edmonton, Alberta, with prospects to market our barrels further downstream.

Hedging

To mitigate the impacts of fluctuations in commodity prices, Osum maintains an active hedging program. The objective is to increase the certainty of Canadian-dollar operating cash flows by reducing commodity price volatility. Over time and on a rolling basis, Osum hedges bitumen revenue and certain input costs such as condensate and natural gas. Hedging targets a percentage of expected sales and purchases, which vary based on several factors, including the amount and timing of planned capital and financing expenditures.

Summaries of the Company’s hedging positions are included in its Quarterly and Annual Financial Statements, which are available in the Financial Information section.

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