EXTRACTS: The lands are near those owned by Shell Canada, which expanded its presence in the region with its C$2.4 billion acquisition of Blackrock Ventures, completed last month. Shell has said it wants to more than double “in situ” oil sands production – resources not accessible by mining – to 50,000 bpd within two years using more expensive recovery methods, such as steam injection on a large scale.
THE ARTICLE
By Upstream staff
Penn West Energy Trust has identified a major oil sands deposit on its northern Alberta lands but its chief executive said today the company does not intend to break the bank by embarking on quick, large-scale development.
Instead, Canada’s largest conventional oil & gas trust plans to increase extra-heavy crude production at its Peace River operating area gradually using traditional recovery methods, Penn West boss Bill Andrew said.
The company has identified a resource of six billion to seven billion barrels at the Peace River’s Seal area, and is targetting production of at least 20,000 barrels a day within about five years, Andrew told analysts in a conference call to discuss Penn West’s second-quarter results.
Penn West expects output from the area of up to 5,000 bpd in the second half of this year, Reuters reported.
“The 20,000 is coming from lands that have got pretty good drilling into them right now. We expect that there will be more added to that as we develop Seal North, as we develop unexplored land at Seal,” he said.
Penn West, which recently closed a C$3.1 billion (US$2.7 billion) takeover of Petrofund Energy Trust, at first can use cheaper artificial recovery techniques in the region because the crude is not too tarry, he said.
Eventually, the company will consider boosting production by injecting steam into the oil sands reservoir.
The lands are near those owned by Shell Canada, which expanded its presence in the region with its C$2.4 billion acquisition of Blackrock Ventures, completed last month.
Shell has said it wants to more than double “in situ” oil sands production – resources not accessible by mining – to 50,000 bpd within two years using more expensive recovery methods, such as steam injection on a large scale.
“From my perspective, for a trust, it’s going to be a much more phased-in, smaller, bite-size approach, I think, just because of the nature of the tensions within the business,” FirstEnergy Capital analyst William Lacey said.
Surging oil prices have created an oil sands development boom, which has fuelled escalating costs throughout the industry as well as project delays amid a run on labour and materials.
In addition, Penn West has to maintain cash distribution levels for its unit holders, making large one-time capital costs more tricky, Lacey said.
“Growing at 3000 to 5000 barrels a year is probably a pace that they can maintain,” he said.
However, it is still possible that Penn West could bring in a partner with more grandiose plans, Lacey said.
The trust said late today it earned C$221 million (US$196.8 million), or C$1.31 a unit, in the second quarter, up more than threefold from last year. The result was boosted by a future income tax recovery of C$74 million.
Most recent results did not include numbers from Petrofund because the deal was completed at the end of the quarter.
Production slipped more than 6000 barrels of oil equivalent a day to 93,242.
Andrew pegged second-half production at 131,000-135,000 barrels of oil equivalent a day.
Annual cash flow was forecast at C$1.3 billion-C$1.4 billion, assuming a second-half average US oil price of $72 a barrel and Canadian natural gas price of C$8 per thousand cubic feet.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
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: 
MORE DETAILS:
A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
