North American Oil Sands Plans PublicNorth American Oil Sands Plans Public Offering in 2006
Friday, May 19, 2006
Another project in CLL's back door, Ya Baby Ya
Private oilsands junior North American Oil Sands Corp. said Thursday that its massive development plans in northern Alberta could cost upwards of $7.4 billion and that it expects to make a public offering later this year.
Michael Langley, the company's senior vice-president of business development, told an energy conference in Toronto on Thursday that it expects to begin producing 10,000 barrels per day by 2008 from its Kai Kos Dehseh project.
Like many planned projects in the area which uses steam to melt the gluey bitumen deposits deep underground, North American plans to develop its site in a series of expansions.
Langley said with phases being added every 12 to 14 months, production is expected to rise to more than 160,000 barrels per day by 2016.
And he said North American views the need for its own upgrading as key to the entire project.
"Upgrading is an essential element - it mitigates the volatility of bitumen, it reduces the transportation costs and risks, it can provide alternative fuels for (steam assisted gravity drainage), and it has the potential for integration with either SAGD or petrochemicals depending on the location of the upgrader," Langley told the conference.
The initial phase of the project is expected to cost about $850 million, while the first phase of the upgrader will bring the bill up to $3.5 billion. The entire project is slated to cost around $7.4 billion and the company expects to file regulatory applications for the upgrader by the middle of 2007.
Though currently closely held, North American is currently raising capital through a private placement and plans to go public this fall, said Langley.
The company was radically transformed less than two months ago when oilpatch intermediate Paramount Resources Ltd. announced it was taking a 50 per cent stake in the company in exchange for transferring its 50 per cent in a key oilsands lease.
Paramount and North American each hold equal joint venture interests in Alberta oilsands leases in the central Athabasca areas of Leismer, Corner, Thornbury and Hangingstone.
Other investors include ARC Financial Corp. and the Ontario Teachers Pension Plan.
North American's plans are just the latest in a dizzying array of multi-billion projects to harvest the oilsands, which is believed to hold the world's second-largest supply of energy behind Saudi Arabia.
Earlier this week, the Canadian Association of Petroleum Producers predicted that Canadian oil production will nearly double by 2020 to just under five million barrels per day.
Oilsands output, which now exceeds one million barrels per day, is expected to reach 3.5 million barrels by 2015 and four million by 2020, accounting for more than 80 per cent of Canada's overall production.