CALGARY, Nov. 28, 2012 /CNW/ - Athabasca Oil Corporation (TSX: ATH) announces the sanction of its Hangingstone 1 SAGD Project and reaffirms that its Light Oil Division is on track to meet its year-end production target of 10,000 to 11,000 barrels of oil equivalent (boe/d). In response to achieving these significant corporate milestones, the Board of Directors announces executive appointments, effective immediately, to bolster the Company's transformation to an exploration
and production (E&P) company.
The Board of Directors has sanctioned the $536 million development budget for the Hangingstone Project 1, comprised of a 12,000 bbl/d central processing facility and four well pads with five SAGD well pairs per pad. Athabasca expects to develop this 12,000 bbl/d thermal oil project at a cost of $44,700 per barrel, exclusive of the $27 million of supporting infrastructure.
The drilling of SAGD well pairs is planned to commence, in mid-2013, at the Hangingstone Project 1, with the facility commissioning and start-up scheduled for Q4 2014. First steam is anticipated before year-end 2014, followed by first production in early 2015.
Athabasca plans to follow up the Hangingstone Project 1 with two consecutive SAGD projects, bringing the area's potential production to more than 80,000 bbl/d.
The Company continues to advance its Montney and Duvernay development, in Alberta's liquids-rich Deep Basin. Montney well results continue to meet or exceed the Company's expectations. Athabasca's Duvernay fairway consists of more than 300 high-graded net sections with significant potential.
The Light Oil Division is currently producing approximately 4,000 boe/d.
Commissioning of the Kaybob East and Saxon facilities, by mid-December, should enable Athabasca to achieve its year-end exit rate guidance of 10,000 to 11,000 boe/d.
"I am very pleased with the production test results, and with the rapid and extensive build-up of production infrastructure in the Kaybob and Saxon areas," said Sveinung Svarte, chief executive officer. "I am particularly encouraged by the test results of our third Duvernay well which had strong flow rates and exhibited steady formation pressures towards the end of the test period.
Athabasca, like other E&P operators, sees tremendous Duvernay potential in this part of the Deep Basin."
Source: Athabasca Oil Corporation
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