Connacher has completed the commissioning of its central processing and steam generating plant at the Algar oil sands project ("Algar"), on schedule and without any major complications. First steam is being circulated in the seven steam assisted gravity drainage ("SAGD") well pairs on well pad 203. Algar is located within Connacher's principal Great Divide oil sands lease block approximately 80 km southeast of Fort McMurray, Alberta.
All of Algar's 17 SAGD well pairs, distributed among three well pads, were drilled, completed and are now prepared to accept steam into the injector and producer well bores. Starting with the SAGD well pairs on well pad 203, each of the well pairs will be brought into circulation on a staged basis, over the next several weeks. Connacher plans to circulate steam into each pair of well bores for approximately 60 to 90 days prior to the planned start-up of bitumen production. The process will be closely monitored to determine the optimum production start-up date, based on individual well response.
The Algar project has a design steam generation capacity of 30,000 bbl/d, which, at its forecast long-term target peak operating steam:oil ratio ("SOR") of 3.0, is anticipated to facilitate production of 10,000 bbl/d of bitumen over a project life of more than 25 years. Algar received regulatory approval in 2008 and construction was completed in April 2010. First production is anticipated in the third quarter of 2010.
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