Surmont Energy announces oil sand application submission

Source: Surmont Energy 

Calgary-based private company Surmont Energy Ltd. ("Surmont", or the "Company") is pleased to announce that applications for regulatory approval have been submitted to the Alberta Energy Resources Conservation Board and the Government of Alberta''s Department of Environment and Sustainable Resource Development, for the Company''s 12,000 barrel per day (BPD) Wildwood SAGD Project.

These applications were submitted by Surmont as operator and 80% owner of the proposed project. Bounty Developments Ltd. ("Bounty") holds the remaining 20%.

HIGHLIGHTS

•Surmont plans to apply conventional Steam-Assisted Gravity Drainage (SAGD) technology to produce bitumen from a high-quality McMurray oil sands reservoir located approximately 65 km south of Ft. McMurray, Alberta.
•Production is forecasted to commence in 2015 or 2016, and to ramp up to approximately 12,000 BPD over one to two years. Peak production is projected to continue for about 15 years, with an overall project life of 24 years or more.
•No issues have been identified with reservoir quality, caprock integrity, reservoir top gas, reservoir bottom water, or associated natural gas.
•Conventional water treatment, steam generation, and bitumen/water/gas production technologies are to be applied at a central processing facility.
•The central processing facility''s design includes a natural gas-fuelled cogeneration power plant; however, discussions are also underway for supply of primary or back-up power via the electricity grid.

The contents of these regulatory applications may be viewed via Surmont''s website, at: www.surmontenergy.com/WildwoodProjectApplications

Surmont estimates that the process for regulatory review of its application could require 15 to 18 months. The project applicant will normally, within four to six months of application submission, receive Supplemental Information Requests listing additional information to be provided.

Surmont is continuing its process of consultation with aboriginal, public, and Industry stakeholders in conjunction with the application review process.

OPERATIONS

Surmont and Bounty are developing plans for exploration of the balance of the Wildwood oil sands leases in upcoming winter seasons, with the objective of developing expansions to the project. Such additional expansions could further increase the project''s lifespan and peak rates.

Work has also commenced for financing the engineering, procurement, construction and drilling activities to implement the Wildwood SAGD Project, which has capital investment requirements over the next several years totaling in excess of $500 million.

A MAJOR MILESTONE ATTAINED

Surmont''s submission of these regulatory applications marks the attainment of an important milestone for the Company. Since being founded less than a year ago, Surmont has:

•raised its initial tranche of investment capital;
•executed successful 3-D seismic field acquisition and corehole drilling programs to earn its 80% interest in the Wildwood lands;
•confirmed sufficient bitumen resources to support a full-scale oil sands production scheme; and,
•prepared and submitted its comprehensive application for regulatory approval of the 12,000 BPD Wildwood SAGD Project.

These achievements would not have been possible without the investments made by our shareholders and the outstanding contributions of Surmont''s project team including members from co-venturer Bounty, consultants, and contractors.


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