Petrobank Charging

For those who do not know why this is important, Petrobank is the company that is launching THAI/CAPRI technology in the Alberta Tarsands and in heavy oil resources worldwide. The technology has been completely successful to date and we now have an economic method of production that will ultimately be able to supply at least a third of global oil demand without the massive problems associated with mining and other present methods.

Think US demand at 15,000,000 barrels per day and then consider that this technology can replace all that demand out of Alberta just as quickly as we can drill 1000 barrel per day shallow horizontal production wells. That is exactly 15,000 wells in the Tarsands. It can also include a few hundred wells in some of the heavy oil reserves in the US, although simple economics are likely to favor the Tarsands for decades.

Whatever happens to the oil industry and whatever happens to all other energy solutions, we can be certain that this company will be a major player in the oil industry for decades to come.

We have burned a trillion barrels, and we have a trillion barrels of the easy stuff left, and these guys are on the way to be the key player in the recovery of the three trillion plus worth of heavy oil. If it takes a century or a millennium, this is the technology that enables it.

Petrobank boasts record year

By Shaun Polczer, Calgary HeraldMarch 13, 2009

Despite a 30 per cent drop in fourth-quarter profits, Calgary-based Petrobank Energy and Resources Ltd. had its best full-year result ever on the strength of higher production from its unconventional oil and gas plays.

The Calgary-based company said net income tripled in 2008 to $244.5 million, or$2.76 per share, even as fourth-quarter profits fell to $28.08 million, or 34 cents a share, from $40.15 million, or 45 cents a share, a year earlier.

Cash flow jumped 281 per cent in 2008 to $665.9 million, or $7.28 per diluted common share, as production soared 181 per cent to 28,742 barrels per day (bpd) from 10,243 bpd in 2007. Petrobank said higher production enabled it to offset the effects of lower commodity prices in the second half.

"Petrobank's production growth coupled with high world oil prices during the first three quarters of the year combined to generate record levels of cash flow and net income," the company said in a statement.

Petrobank said its Canadian results were underpinned by the performance of the Bakken unconventional oil play in southeast Saskatchewan where it produced almost 20,000 barrels a day. In addition, the company has interests in the Montney and Horn River natural gas plays.

The company said it continues to progress with its toe-to-heel air injection, or THAI, fire flood technology that employs in-situ combustion to loosen thick heavy oil deposits and upgrade it underground. Work on a variation of the THAI technique using chemical catalysts--dubbed CAPRI--also continues.

Petrobank's wholly owned subsidiary, Archon Technologies Ltd.,was granted two new U.S. patents for improvements that add features to the existing THAI and CAPRI technologies and extend the life of the existing intellectual property to 2026.

Three other patent applications are pending, Petrobank said, covering a "heel-to-toe" combustion design, catalyst placement for CAPRI and downhole solvent injection.

Petrobank is continuing to license the technology to third-party opera-tors and late in the fourth quarter entered into royalty, technology licence and a joint venture agreements with True Energy Trust to apply the technology on portions of its Kerrobert heavy oil property in west central Saskatchewan.

Despite the downturn, Petrobank said it continues to negotiate joint ventures around the globe and expects to announce another joint project in the near future.

"We continue to receive worldwide interest in our technology."

Andrew Potter, an analyst with UBS in Calgary, said Petrobank finished the fourth quarter "on a strong note" despite softer commodity prices and maintained a "buy" rating with a 12-month target of $42 on the stock.

Petrobank shares surged more than eight per cent on the Toronto Stock Exchange on Thursday, up $1.61 to $21.67.

SPOLCZER@THEHERALD.CANWEST.COM

THAI Expansion Approved

This newspaper story is much more revealing than normal corporate pronouncements and is very encouraging. In fact, the technology is advancing rapidly and needs to be sped down the road in view of pending supply difficulties. It is business as usual with the regulators, though.

He is talking about a eighty percent recovery of oil. That is utterly amazing in terms of oil industry practice and experience. All conventional fields with extremely light oil are lucky to approach fifty percent after decades of drainage and stimulation.

I suspect that when the Saudi’s bounced their reserves from 110 billion barrels to 260 billion barrels, it was done by the expedient of merely adding in the total resource including the unrecoverable 60%.

In other words our boy is been very bullish. However, read my lips. This is all done with wells on the world’s single largest oil resource. The initial pilot was three wells. This phase is another three wells to fold in the CAPRI protocol.

They have not given us bench marks but I suspect that the wells will ultimately produce nearly 1,000 barrels per day of 15 to 18 gravity oil from the 8 gravity bitumen. Now you too know what to watch for.

The next phase now entering permitting is for production levels of 100,000 barrels, if I recall correctly. That can be replicated a hundred times without putting a dent in the ultimate resource, particularly if recovery approaches eighty percent.

You do get a sense of the slowness of regulatory process in these matters. If we do have a supply emergency, then fast tracking this all is a matter of putting a thousand drills to work tomorrow morning. It would still take time to ramp up even then but it would be predictable also.

The second article is now giving us numbers. A barrel of production is capitalizing at $10,000. In other words, if the operating net is a mere $10.00 per barrel, then it is paid of in three years, which is very good by industry standards particularly when you do not have to find the oil. Even at $50.00 per barrel, I suspect we have a $15.00 net. You can do the rest of the math.

Petrobank wins approval for heavy-oil project expansion

ERCB rejects objections from two local groups

Dave Cooper, The Edmonton Journal

Published: 2:34 am

An Alberta petroleum company using a revolutionary process to extract underground bitumen has finally won ERCB approval for an expansion to its heavy oil pilot project south of Fort McMurray.

Petrobank Energy's Whitesands site had three insitu wells demonstrating the THAI (toe-to-heel air injection) process, and wanted to add an additional three to further study the CAPRI process which uses a catalyst between the inner and outer liners of the slotted horizontal production well.

"We would have liked to have those three wells on stream so we could have more information for our next application" for a nearby 10,000-barrel-a-day project, said Chris Bloomer, a vice-president of Petrobank.

The Energy Resources Conservation Board rejected the "broad letters of objection" from two local groups, said Petrobank.

In a release, the firm said "the delay in receiving the decision was not related to the technical merits of the application. Petrobank views this decision as a validation of our values and strategy to consult, rather than compromise the process by making extraordinary financial payments to intervening parties to facilitate the withdrawal of objections and thereby shortening the regulatory process."

The ERCB dismissed objections by the Beaver Lake Cree Nation and the Métis Nation of Alberta - Local 1935.

Bloomer would not comment further on the release, but "you could say it has added a year to what is really a development project."

He said THAI could replace the current SAGD (steam assisted gravity drainage) and CSS (cyclic steam stimulation) systems used to extract bitumen that is too deep to mine. But some in the oil industry say THAI won't be a significant technology for another 20 years.

"I think that's unfair. If you take a look at the state of the technology today, being able to do simulations and monitoring, and knowing what we know about the reservoirs, the tools we can use are light-years away from what was available in the past," said Bloomer. "I think they are taking a very parochial view, that it took SAGD 20 years so it's going to take any other technology 20 years. We think this is a technology that has to proceed."

Earlier this month, Petrobank signed a royalty and joint venture deal with True Energy Trust to apply THAI technology to two test wells at a heavy oil property in Saskatchewan.

Bloomer said THAI is applicable to many heavy oil fields around the world. The process offers high recovery rates -- up to 80 per cent of the oil in place compared with 20 to 50 per cent for SAGD. It also uses little natural gas and water. In THAI, air is pumped under pressure into the toe of the reservoir, creating natural combustion to heat the cold heavy oil, which flows into horizontal slotted pipes.

dcooper@thejournal.canwest.com

Oilsands regulatory delay frustrates Petrobank boss

Holdup leaves CEO fuming

Dan Healing, Calgary Herald

Published: Saturday, November 29, 2008

The head of a Calgary company with a promising technology to recover bitumen from the oilsands says he is regretting choosing to build in Alberta after an 18-month wait to obtain regulatory approval for a three-well expansion.

"It's cost us time. It's cost us a world of opportunity," said John Wright, president and chief executive of Petrobank Energy and Resources Ltd.,which owns the toe-to-heel air injection or THAI technology that uses in-situ combustion to enhance recovery of bitumen and heavy oil.

"We think our technology is going to change the way heavy oil is extracted by reducing the amount of fresh water that's used, eliminating the need for gas and cutting the greenhouse gas emissions in half, so why would we ever want to see that delayed?

"If we'd known it was going to be this long an approval process in Alberta, we would have thought twice about doing our first project here."

Petrobank announced late Thursday it had received copies of letters from the regulator, the Alberta Energy Resources Conservation Board, to the Beaver Lake Cree Nation and Metis Nation of Alberta--Local 1935 indicating that their objections to Petrobank's project had been dismissed.

Both parties indicated they traditionally used the area 120 kilo-metres south of Fort McMurray for hunting, trapping and fishing, but the ERCB wrote that neither had proven those claims and therefore would not be granted standing at a hearing.

opportunity.See of expansion plans has "cost us a world of "

The decisions clear the way for approval of the project.

ERCB spokesman Bob Curran defended the process, noting the public often loudly accuses the regulator of rubber-stamping every oil project and the companies complain more quietly that the process takes too long.

"We hear it from both sides all the time," he said. "It just goes to show we have a thorough process and we make no apologies for that."

Curran added that although the objectors can appeal the ERCB decision within 30 days, the licensing of the project will not face further delays.

Drew Mildon, a Victoria lawyer who represents the Beaver Lake band, said it hasn't been decided if the decision will be appealed.

"It's not unexpected," he said. "I've seen the approach the ERCB has taken to First Nations complaints in the past."

He criticized the ERCB for not considering cumulative effects and for its insistence that complaints are"very site specific,"noting that development affects the forest and therefore the natives' treaty rights.
The process left Wright vexed and vowing to put all of the correspondence related to the application on the Petrobank website.

"If you read those letters," he said, "they have actually stated the parties that have written these general objections . . . don't have standing. (They're saying) you can't make a general claim that anything happening anywhere within 100 miles of you is going to affect your future enjoyment and your ancestral use rights."

He added the dissenting par-ties had offered to drop their objections in return for compensation from Petrobank.

"That's not the way we do business,"said Wright. "We're not going to buy someone's approval.

Curran said companies are allowed to compensate parties affected by their development plans and those arrangements are not part of the ERCB's mandate.

Gary Leach, executive director of the Small Explorers & Producers Association of Canada, said 18 months is too long to wait for approval of a straightforward project.

"That's the kind of delay you'd expect with a very complicated, significant project with scores of people with interests, and lots of studies and environmental assessments. For a relatively modest project to drill a couple of wells, I'm surprised it would take that long. It's probably excessive."

Leach added there is growing concern among oil and gas developers about interveners in regulatory matters who object (and have their expenses covered by the company if they are granted standing) for the sole purpose of delaying development.

"We're not looking for a relaxation of standards, but there are points in the process where there is potential for abuse by people who aren't legitimately affected and use the rules as they stand to stop resource development."

David Pryce, vice-president of western Canadian operations for the Canadian Association of Petroleum Producers, said slower regulatory processes create uncertainty and delays that result in additional cost for businesses.

"I think it is a concern," he said. "We've seen the approval process kind of stretch out around these sorts of things."

Both CAPP and SEPAC are working with the government on regulatory reform.

Wright said Petrobank had wanted to wait until it drilled the three wells before seeking approval for its planned 100,000-barrel-per-day May River commercial project, but it has moved that forward while waiting and now expects to file its application within days or weeks.

The project is to be centred within two kilometres of the demonstration site and built in phases, at a cost of about $150 million for each 10,000 to 15,000 bpd phase.

He said May River will reach 100,000 bpd by drilling 100 to 150 wells within three to four years. The resource is big enough to produce for 25 to 30 years.

Petrobank has drilled three wells at Whitesands to demonstrate its THAI technology. The new wells are intended to further demonstrate its CAPRI technology--which employs chemical catalysts to further improve the quality of the oil --as well as a revised down-hole completion design and longer well lengths.

The company recently licensed its technology to True Energy Trust in return for an initial 50 per cent interest in a portion of its Kerrobert, Sask., heavy oil pool.

In addition, Petrobank will earn a 10 per cent share of all production on the True lands following a threshold reserve recovery.

Late last year, Petrobank licensed the technology to Duvernay Oil Corp., which was then sold to Shell Canada.

IEA admits Developing Oil Collapse

This has just been released a few hours ago and has been expected. This is the IEA’s biennial report and it is now acknowledging that production declines are been felt everywhere and it will take an incredible investment to just maintain current production. My readers already know that.

The hope that massive investment will solve this looming shortfall is whistling in the dark. Outside of the coming THAI /CAPRI revolution, only now slowly developing, there are no alternatives.

The industry is spending full out but they simply have run out of targets and options sufficient to make up the looming production decline (collapse?). After all, you drill in the seas off Kamchatka because you cannot drill one thousand new wells in much better places.

My readers know that Alberta’s tar sands are positioned to fill the demand gap. In fact I saw a newsletter quote a real reserve figure of 2.7 trillion barrels. Half or more of that will be recoverable with THAI/CAPRI. That gives us ample supplies for at least a century.

The point is though that a major industry authority has finally admitted what they knew all along, that replacing cheap oil with expensive oil is incredibly expensive and this makes expensive alternative fuel sources competitive now.

And since alternative energy sources are at least carbon neutral, they will quickly replace the entire oil industry over the next twenty years and leave most of that expensive oil in the ground.

The report continues to use weasel words but they are clearly now into covering their backsides since the supply failure is becoming visible. Their reference to forty years of supply almost lets you believe it is sitting in a tank somewhere. They fail to mention it will take eighty years to extract it all at increasingly higher cost. And it is forty years since all that oil was found and put on stream.

I think my headline makes it a little clearer.

Whenever I get access to this report in whole or in part, I will post useful data.

Energy body warns on oil prices

By Sarah Mukherjee

BBC News

One of the world's leading authorities on energy supply says the era of cheap oil is over and prices could soon be back up to $100 a barrel.

The International Energy Agency (IEA), in its World Energy Outlook for 2008, says prices could soar as high as $200 a barrel by 2030.

The immediate risk to supply, it says, is not one of a lack of global resources.

Instead, it points to a lack of investment where it is needed.

Rising costs

The world, the report's authors conclude, is not running out of oil just yet - indeed, there is enough of it to supply the world for more than 40 years at current rates of consumption.

But, they point out, field by field, declines in oil production are accelerating and more money will be needed in research and development to extract the oil there is.

While world oil supply will rise, the report's authors predict that massive investments in energy infrastructure will be needed - an eye-watering $26 trillion dollars up to 2030.

A significant amount of this money - $8.4 trillion - will need to be spent on oil and gas exploration and development.

In one scenario considered by the IEA, China and India will account for just over half of the increase in world primary energy demand between 2006 and 2030, and much of the increase in world oil demand.

But despite the agency's assessment of oil and gas reserves, the report contains a stark warning of the consequences of continuing to rely on fossil fuels.

The consequences for the global climate of policy inaction when it comes to decarbonising the world economy are "shocking", according to the report.

"Strong, co-ordinated action is needed urgently to curb the growth in greenhouse gas emissions and the resulting rise in global temperatures," it said.

Petrobank commences THAI/CAPRI Pilot

I share this recent release from Petrobank who is pioneering the THAI protocol for producing the tarsands. They have successfully implemented THAI and are now testing CAPRI which is a catalytic sleeve in the production well. They are also installing a slotted liner system which should eliminate the sand inflow problem.

Remember this pilot system is only two years old. They are now also ramping up the air input in order to maximize production. Remember that in the early going, the burn front would be small preventing full air flow.

Now with plenty of oil removed it should be easy to expand air flow. It is projected that each well will achieve production rates of around 1000 barrels per day and sustain this for at least three years if not a great deal longer. No one is that courageous yet.

Read my post of a year ago to get a quick description:

http://globalwarming-arclein.blogspot.com/2007/08/thai-proclaimed-success.html

I cannot over exaggerate how important THAI technology is. Without CAPRI a THAI well is converting 8 degrees API oil to 12 degrees API while also producing some lights. It is doing this without mining the tarsand or putting any fuel into the formation. The environmental footprint is little different that that of a conventional oil well with perhaps a little more CO2 allowed to escape that is surplus to what is dissolved into the formation itself which is beneficial in releasing the oil from the sand.

With CAPRI, it seems possible to bring the gravity up to perhaps 17 degrees API and that will make it directly shippable into the pipelines, or so close as to be easily upgraded.

The available resource in the tarsands has always been estimated at well over a trillion barrels. They gave up trying to actually measure it a long time ago because it was not obviously producible. This technology will make all of it producible at recoveries that will approach a mind boggling seventy percent. This translates into a reserve picture exceeding one trillion barrels of oil very soon. This matches all the oil ever consumed and can be expected to exceed that of Saudi Arabia by one hundred percent at least.

All this while eliminating the environmental problems and costs related to mining this stuff.

I fully expect that the developed world will now move heaven and earth to lower our dependence on oil as a fuel. Having this reserve coming on stream gives us the energy security to do so without out of control pricing and rationing. It also puts all the other producers on notice that we no longer need their oil.

This technology will also access billions of barrels of oil that was bypassed over the past century. Many other small heavy oil fields were found, although most were quite large by conventional standards, and this technology will open them up. Depleted field may also respond to this method provide that they can be dehydrated.

A speculation can be made asserting that global reserves will reach ten trillion barrels. I have no inventory list to support that number and suspect that it will be conservative. I think we could find half of that in North America.

The point is that we actually could stay on an oil diet while the whole globe properly modernized. What we cannot do is continue to convert fossil fuels into CO2. And this blog has discovered many excellent sustainable strategies to exploit that are far more beneficial, including the conversion of all that CO2 into biochar.

Petrobank Announces First THAI(TM)/CAPRI(TM) Production

Mon Sep 22, 12:01 AM

CALGARY, ALBERTA--(Marketwire - Sept. 22, 2008) - Petrobank Energy and Resources Ltd. ("Petrobank" or the "Company") (TSX: PBG.TO) is pleased to announce results from the world's first CAPRI(TM) in-situ catalytic production well (P-3B) at our Whitesands project near Conklin, Alberta.

Whitesands P-3B Update

Petrobank drilled P-3B late in the second quarter of 2008 and completion operations commenced on the well in late July. This well has been designed to demonstrate the additional upgrading potential of our patented CAPRI(TM) process which places an active catalyst bed between two concentric slotted liners.

In laboratory tests, CAPRI(TM) has achieved an upgrading effect of seven degrees API in addition to the upgrading effect resulting from the THAI(TM) process. The P-3B well also incorporates our narrower slot design, intended to significantly reduce sand production from the McMurray sandstone reservoir typically encountered at Whitesands.

Since air injection and oil production commenced in August from P-3B, the well has been on continuous production, with no appreciable produced sand. Initial produced fluids consisted of oil and water emulsions from the steam preheat as well as residual drilling mud, which diminished as the well cleaned up. Recently we have achieved oil production volumes of up to 300 barrels per day on low air injection rates, with oil cuts of 40 to 50%. While it is still too early to determine the effectiveness of the catalyst, the produced oil has been upgraded to 11.5 degrees API due to the thermal cracking effects of the THAI(TM) process. Currently P-3B is operating at a well bore temperature below the optimum range for the catalyst to be effective. We are presently increasing well bore temperatures up to 300 degrees Celsius for optimum catalyst efficiency and we will continue to analyze produced oil quality to assess the catalyst effectiveness. Produced gas analysis from P-3B is consistent with the P-1 and P-2 wells and indicates high temperature combustion with free hydrogen.

During the early startup phase of the P-3B well we have continued to operate the P-1 and P-2 wells at lower air injection rates. These wells have recently achieved high on-stream factors with oil production rates of up to 400 barrels per day for each well at a quality of approximately 12 degrees API, compared to the native 8 degree API bitumen in-situ. Now that P-3B production is stabilizing, we are gradually increasing air injection on all three wells, which is expected to result in further increases in fluid and oil production.

During August we also installed facilities to recover lighter oil that is currently being carried by the overhead gas stream as a vapor which is then condensing in the secondary separators. This lighter oil is over 30 degrees API and is not included in the production rates noted above. This lighter oil component further demonstrates significant in-situ thermal cracking and the potential for co-production of other high-value by-products.

Our revised facilities design utilizing primary gas separation followed by tank separation of oil, water and sand (rather than using a single pressure vessel) is being installed on P-3B and, when combined with the narrower liner slot size, is expected to eliminate most operational challenges caused by sand production in this well and future wells.

Petrobank Energy and Resources Ltd.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada and Colombia. The Company operates high-impact projects through three business units and a technology subsidiary. The Canadian Business Unit is developing a solid production platform from low risk gas opportunities in central Alberta and an extensive inventory of Bakken light oil locations in southeast Saskatchewan, complemented by new exploration projects and a large undeveloped land base. The Latin American Business Unit, operated by Petrobank's 76.2% owned TSX-listed subsidiary, Petrominerales Ltd. (trading symbol: PMG), is a Latin American-based exploration and production company producing oil from three blocks in Colombia and has contracts on 15 exploration blocks covering a total of 1.6 million acres in the Llanos and Putumayo Basins. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., owns 75 net sections of oil sands leases in Alberta, 36 sections of oil sands licenses in Saskatchewan and operates the Whitesands project which is field-demonstrating Petrobank's patented THAI(TM) heavy oil recovery process. THAI(TM) is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil that integrates existing proven technologies and provides the opportunity to create a step change in the development of heavy oil resources globally. THAI(TM) and CAPRI(TM) are registered trademarks of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank.