Husky follows Shell in trying to squeeze oil from hard rock
Calgary firm pays $10-million for limestone leases
PATRICK BRETHOUR
CALGARY — Husky Energy Inc., saying it is aiming for a “dominant position” in the oil sands, is boosting its bet that it can wring crude out of limestone.
The Calgary-based integrated energy company said yesterday it has spent $10-million to acquire leases 95 kilometres west of Fort McMurray, in an area where the oil sands become oil rocks — where bitumen is trapped in limestone rather than clay.
Husky already had substantial holdings of what is technically known as carbonate in its Saleski leases. Saleski holds about 16.8 billion barrels of original bitumen in place, one of the most expansive measures of the potential of an oil reservoir. The new leases, adjacent to Saleski, contain another 2.7 billion barrels of bitumen in place. All told, the Saleski properties hold more than half of Husky's oil sands potential.
The lands were bought in the early April land sale, about two weeks after Royal Dutch Shell surprised the oil patch by spending $465-million on a large 10-parcel property containing carbonates.
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Decades of effort to exploit carbonates have ended in failure, but the Shell acquisition has injected new life into the play, said Robert Bedin, senior analyst at Ross Smith Energy Group in Calgary.
“There's a buzz now surrounding Shell's acquisition,” he said, noting that Husky spent only about a fifth as much per acre as Royal Dutch.
He suggested that the gap means Husky could turn a tidy profit if it ever opted to sell Saleski and the new leases, rather than shoulder the risk itself.
But Husky spokesman Colin Luciuk said his company is already moving ahead with plans to develop the resource, including a drilling program on the Saleski leases completed in the winter and a continuing evaluation of technology that could be used to extract bitumen. The current bitumen industry extracts the tar-like substance from sandstone and dirt, using either mining or steam-assisted extraction.
Neither of those methods work for limestone, which cannot be mined easily and dissolves if water is used. To further complicate matters, the bitumen in the limestone is broken up into small globules, often not much bigger than two fingers.
It is thought that electrical wires can be used to heat up the bitumen enough to pump it to the surface.
Meanwhile, Husky reported first-quarter financial results largely in line with analysts' expectations, despite production problems at the Terra Nova offshore oil project in Newfoundland.
Cash flow from operations was $967-million, or $2.28 a share, in the quarter ended March 31, up from $816-million or $1.93 a share in the year-ago quarter.
Although improved from last year, cash flow was below the $2.53 average estimate of cash flow per share of 13 analysts polled by Husky.
Revenue jumped to $3.1-billion in the quarter just ended, up nearly 50 per cent from $2.1-billion this time last year. Profit rose to $524-million or $1.24 a diluted share in the first quarter of 2006, up from $384-million or 91 cents a diluted share a year ago.
Husky, the first of the Canadian integrateds to report its first quarter, saw profit widen in its upstream production while earnings fell in its retail operations. In the upstream, profit rose to $412-million from $239-million, while those in retail operations fell to $16-million from $18-million, partly due to lower marketing margins for gasoline and other fuels.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
