Alberta news brief July 14: Husky Energy invests in CO2 capture tech to support heavy oil ops

Also in this brief: Cenovus looks outside for CEO to replace to Brian Ferguson, Pengrowth sells Olds/Garrington area assets for $300 million

Inventys, the developer of the VeloxoTherm™ System, a carbon dioxide (CO₂) capture process, says it has raised $10 million of equity financing, with Husky Energy as lead investor.

The money will fund a 30-tonne per day (TPD) CO₂-capture pilot plant aimed at producing a low-cost CO₂-supply solution for Husky’s heavy oil enhanced oil recovery (EOR) program near Lloydminster, Saskatchewan.

“We’re very pleased to work with Husky and welcome its investment and industry knowledge,” said Inventys CEO Claude Letourneau.

“This is the world’s first pilot-scale plant using structured adsorbents to capture CO₂ from a once-through steam generator (OTSG) for use in heavy oil recovery.”

The VeloxoTherm™ System is a next generation CO₂-capture technology that has the potential to deliver breakthrough capture costs. By combining a uniquely patented solid adsorbent structure with a rapid cycling temperature swing adsorption process, Inventys has successfully demonstrated economical CO₂ capture capabilities with its compact adsorption machine.

“Canada offers the perfect setting to prove our second generation carbon capture technology, reduce carbon emissions, uphold Canada’s climate goals, create jobs, and support industrial growth,” said Letourneau in a press release.

Earlier this year, Inventys commissioned a self-contained 0.5 TPD VeloxoTherm field demonstration plant at the same Husky site as a platform for rapid development of its new adsorbent structures. The demo plant has recorded meaningful data since testing began in early 2017. The test results over the next six months will shape the design of the 30-TPD plant. The pilot plant is planned to be commissioned in the fall of 2018.

Husky has been growing its heavy oil bitumen production in the Lloydminster region of Saskatchewan and Alberta through the use of thermal technologies, where steam is injected into oil reservoirs to increase recovery. Through Inventys’ technology, Husky is looking to capture the CO2 generated from its thermal operations and use it to increase oil recovery from adjacent assets.

Cenovus looks outside company for CEO to replace to Brian Ferguson

After spending almost $17 billion to buy ConocoPhillips’ Canadian oil and gas assets, which doubled the company’s production, CEO Brian Ferguson stepped down amid investor anger over the debt-laden deal. Now the company is looking for Ferguson’s replacement outside the company.

“We have hired an executive search firm to conduct a global search and that we will consider both internal and external candidates,” spokesman Brett Harris said in an email.

Reuters reports that Cenovus has retained executive recruitment firm Korn/Ferry International to find a replacement for Ferguson, an accountant by profession.

Candidates may include Devon Canada President Rob Dutton, MEG Energy Corp CEO Bill McCaffrey, ARC Financial Corp Director Chris Seasons and former Shell Canada President Lorraine Mitchelmore, according to Reuters’ sources.

Most of these executives have extensive experience operating in the oil sands, according to Reuters, but Cenovus is also expected to tap top talent from US energy sector.

Pengrowth sells Olds/Garrington area assets for $300 million

Pengrowth Energy Corp. is selling Olds/Garrington area assets in Central Alberta for $300 million cash to a private company owned by a large Canadian life insurance company

The assets generate 2017 average daily production of 13,875 boe/day), and had proved plus probable (2P) reserves of 78 million boe as at December 31, 2016, as per the GLJ Petroleum Consultants independent reserve valuation dated December 31, 2016. The assets include facilities and gathering systems related to the oil and gas properties being sold, as well as the Olds gas plant.

Closing is expected to occur on August 1.

“We are delighted by the significant progress that we have made on reducing our debt and strengthening our balance sheet,” said CEO Derek Evans.

“Our efforts and results to date have been transformational for Pengrowth, allowing us to retain our best assets with the most development opportunities and putting us on a path to either renegotiate or refinance our remaining term debt to allow us the flexibility to develop our Lindbergh and Groundbirch assets.”

Since the start of 2017, Pengrowth has closed or expects to close $827 million of asset sales, which when combined with the $287 million of cash on hand at year end 2016, represents a net debt reduction of over $1.1 billion or approximately 66 percent of December 31, 2016 debt.

This was accomplished while only reducing reserves 16 per cent.

Following the closing of the sale, the Pengrowth’s core focus areas will be its flagship 100 per cent-owned Lindbergh thermal project and its 90 per cent-owned Groundbirch Montney play.