Horizon—Canadian Natural Resources 100 per cent interest
Alberta’s newest oilsands mine was the only one of its peers to actually see a production increase during the first quarter of 2010.
Horizon, which shipped its first barrel of SCO in March 2009, is in the
progress of ramping up to its 110,000-barrel-per-day capacity. In the
first quarter of 2010, SCO production averaged 86,995 barrels per
day, up from 70,194 barrels per day in the fourth quarter of 2009 and
3,384 barrels per day in the first quarter of 2009.
“Ramp-up at Horizon continues with production at the high end of
expectations,” says Allan Markin, Canadian Natural’s chairman.
In both March and April, the company reports SCO production in
excess of 100,000 barrels per day. It is targeting stable production
levels with annual production in 2010 ranging between 90,000 and
105,000 barrels per day.
Horizon operating costs averaged $43.12 per barrel of SCO, an increase relative to its target range of $31 to $37 per barrel. The company attributes the higher operating costs to slightly lower production
in January due to unplanned maintenance.
Canadian Natural continues engineering and procurement for its
first expansion of Horizon.
IN SITU
Foster Creek and Christina Lake SAGD—Cenovus Energy
50 per cent interest
Production volumes continue to increase at the Foster Creek and
Christina Energy, two steam assisted gravity drainage (SAGD) projects operated by Cenovus Energy. During the first quarter of 2010,
production at Foster Creek went up 79 per cent versus the same
period of 2009, while Christina Lake volumes increased 12 per cent
over the first quarter of last year. Foster Creek production averaged
102,252 barrels per day in the first three months of 2010, while
Christina Lake averaged 14,840 barrels per day.
“The year is progressing well and we are somewhat ahead of our ex-
pectations,” says Brian Ferguson, Cenovus president and chief execu-
tive officer. “Production ramped up at our new phases at Foster Creek
and work is advancing on the next two phases at Christina Lake.”
During the first quarter, Foster Creek achieved a milestone in
reaching payout for royalty purposes, which Cenovus says is a result
of strong operational performance and a superior quality resource.
Reaching payout means that cumulative project revenue has ex-
ceeded cumulative project allowable costs. “As a result of reaching
payout, the royalty rate increase from an average of 1.4 per cent in the
first quarter of 2009 to an average of 9. 7 per cent in the first quar-
ter of 2010, with only a portion of the quarter reflecting the increased
rate,” says the company. “Foster Creek is Alberta’s largest producing
[SAGD] project to reach payout to date.”
Long Lake SAGD—Nexen 65 per cent interest
The operationally troubled Long Lake SAGD project could be turning around—thanks to a turnaround in fall 2009. Steam reliability is
higher, upgrader uptime has increased significantly, and ultimately
production and sales volumes are increasing as a result.
“At our Long Lake oilsands project, we are steadily climbing the
growth curve, achieving new record bitumen production volumes
each month as we increase steam volumes,” Nexen reports. “Gross
bitumen production has grown from 14,000 barrels per day in the
fourth quarter of 2009 to 19,000 barrels per day in the first quarter
of 2010. In March, bitumen production averaged 22,000 barrels
QUARTERLY FINANCIALS
Canadian Oil Sands
Trust (Syncrude 34.76%
Interest)
Nexen (Syncrude 7.23%
Interest—includes “and
other”)
Canadian Natural
Resources (Horizon)*
Q1/2010 Q1/2009 Q2/2009 Q3/2009 Q4/2009
8.74
0.48
3. 33
10. 25
8. 47
7.09
2.83
0.40
n/a
8.84
0.76
8. 31
2.19
0.40
2.15
* First sales from Horizon in Q2/2009.
Projects over 10,000 bbl/d
160,000
140,000
120,000
Imperial Oil/Cold Lake (CSS)
Canadian Natural Resources/Primrose-Wolf Lake (CSS)
Cenovus Energy/Foster Creek (SAGD)*
Suncor Energy/Firebag (SAGD)
Suncor Energy/MacKay River (SAGD)
100,000
80,000
60,000
40,000
20,000
Devon Canada/Jack;sh (SAGD)
ConocoPhillips Canada/Surmont (SAGD)*
Cenovus Energy/Christina Lake (SAGD)*
Nexen/Long Lake (SAGD)
Q1/2009
Q2/2009
Q3/2009
Q4/2009
Q1/2010
Projects under 10,000 bbl/d
12,000
10,000
Japan Canada Oil Sands/Hangingstone (SAGD)
Connacher Oil & Gas/Great Divide (SAGD)*
Shell/Peace River (CSS)*
Husky Energy/Tucker (SAGD)
Shell/Orion (SAGD)*
8,000
MEG/Christina Lake Pilot (SAGD)
MEG/Christina Lake Phase 2 (SAGD)
ConocoPhillips/Surmont Pilot (SAGD)*
Total E&P Canada/Joslyn (SAGD)
North Peace Energy/Red Earth Pilot (CSS)
6,000
4,000
2,000
Q1/2009
Q2/2009
Q3/2009
Q4/2009
Q1/2010
Production
(bbl/d)
Avg. Price
Q1/2010
22,600
61.82
Q1/2009
104,800
35. 42
Q2/2009
100,300
53. 48
Q3/2009
99,700
58. 34
Q4/2009
23,300
60.70
Royalties
8. 23
3. 59
7. 38
7.94
14.08
Operating Costs
22. 10
14. 45
12.27
12.98
14.92
Netbacks 31. 49 17. 38 33.83 37. 42
SOURCE: HUSK Y ENERG Y
In Q4/2009, Husky began reporting bitumen and heavy oil separately. Bitumen only seen here.
