For Laricina Energy Ltd., its name says it all. President and CEO Glen C. Schmidt explains that the word “laricina” is the Latin name for the tamarack, a tree common to western Canada that is known for enduring harsh, adverse climates. “It has the attributes of being a pioneer,” Schmidt describes. “It’s a bit tough. We thought it was a good description of the goals we had for Laricina.”
He explains that the Calgary, Alberta, Canada-based company is “one of a handful of emerging oilsands companies” that has assembled a portfolio of projects in western Canada. Schmidt, along with several other members from Deer Creek Energy Limited, formed the company in November 2005.
Since its inception, the company has raised approximately $200 million (Canadian) in equity financing and has accumulated 61,703 net hectares. It has established four main development areas in Germain, Saleski, Poplar and Conn Creek within the Athabasca oilsands region, with more than 10.2 billion barrels of estimated exploitable net bitumen.
“Laricina is a company that, through its two years of operations, will have invested nearly $200 million,” Schmidt declares. “There are only a handful of operators like Laricina that are not majors or independents.” He adds that the company plans to improve on the current in situ processes used to recover oil, such as steam-assisted gravity drainage (SAGD).
Although that approach works, “There are a range of opportunities to improve on that process from modifications to wellbore configuration, to combining attributes of SAGD with cyclic steam operations,” he says.
The company will also explore the use of solvents and downhole combustion. “[We] will continue to expand the range and quality of recovery techniques,” he says.
Scratching the ‘Technical Itch’
Before becoming president and CEO of Laricina Energy in 2005, Schmidt held the same roles at Deer Creek. He also is the chairman of the board of Capex Exploration Ltd., a private conventional oil and gas company, and was the chairman and co-founder of its predecessor, Capio Petroleum Corp.
He has more than 25 years’ experience in the oil and gas industry, with more than 10 years at the executive level.
“The oil industry offers for me an ability to scratch a technical itch,” Schmidt says. “It’s a business that involves interesting capital structures [and] an opportunity to be entrepreneurial, with obviously, [other strong] members of a team.”
People are Key
Although the company may have assembled a diverse array of assets, “The key to any company is not only its assets, but its people,” Schmidt asserts. “We have a very dynamic group of people that have molded together.”
These members include COO and Vice President of Operations Dave Theriault, who served as president of Triangle Three Engineering Ltd., where he provided consulting services for oil sands resource assessment, development and exploitation. He also served as the director of oil sands at Gulf Canada, which is now ConocoPhillips.
Schmidt also names Vice President of Enhanced Oil Recovery Neil Edmunds, whose experience includes serving as manager of enhanced oil recovery and vice president of recovery technology for CS Resources Ltd., as well as the role of reservoir engineering specialist at EnCana Corp. “[Those companies are] some of the pioneers in the in situ business,” Schmidt adds.
Its senior management team also includes Vice President of Finance and Controller Karen Lillejord, who worked with Schmidt at Deer Creek. In addition, “We have a range of geologists and engineers that have had experience in a total of 15 in situ projects” Schmidt says.
“Our objectives now going forward are adding to [our staff],” he continues. “We’ve been focused on bringing a number of new graduates into the organization.”
This has included one co-op student from the University of Calgary who co-authored a technical paper with Edmunds, focused on oil recovery. “He’ll be joining us when he graduates,” Schmidt says. “You really get a pretty good mix of creative people that can get a lot of things done.”
Although some may think of the energy business as utilizing old technology, Schmidt says Laricina Energy strives to be dynamic and fresh, reflected in its pursuit of new recovery methods. He notes that the same characteristics of creativity found in a company like YouTube LLC can be found in the oil sands business. “[We’re] every bit as dynamic [as] a company such as that,” he states.
Properties with Potential
Laricina’s properties are located within the Athabasca Oil Sands region of northeast Alberta and include traditional targets like the McMurray Formation as well as other less developed and less mature Grand Rapids and carbonate plays. All offer substantial resource potential, the company says.
“Laricina’s portfolio was assembled on the principles of value-based asset quality, proximity to infrastructure and potential for large, meaningful scale of operations,” Laricina states. It notes that its four development areas have gross production potential of more than 200,000 barrels of bitumen daily.
The company’s Poplar Creek and Conn Creek properties are in the central portion the Athabasca Oil Sands region. “The main reservoir target for both of these projects is the Lower McMurray Formation, which generally consists of clean, porous sands,” the company says. “Both Poplar Creek and Conn Creek are expected to be developed using existing SAGD technology in the development plan.”
Meanwhile, its Germain and Saleski properties are in the West Athabasca Oil Sands region. “The main reservoir target at Germain is within the Grand Rapids Formation of the Mannville Group,” the company states. “The Grand Rapids comprises the upper part of the regressive upper Manville Group and consists dominantly of thick sandstones.
“The Grand Rapids is a regional marine deposit, at an average 225 meters depth,” Laricina continues. “Its unique features – clean sand with a homogenous and continuous reservoir pay – increases the predictability and consistency of the reservoir.”
Determining Oil Recovery
The company notes that the Germain project will use existing SAGD technology on the initial development. In addition, Laricina says it will investigate enhanced oil recovery potential with innovative reservoir optimization and exploitation strategies.
Its target zone at the Saleski property is the Grosmont Formation, “a dolomitized, shallow marine and tidal flat carbonate complex,” the company states. “The reservoir is characterized by extensive vertical fracturing, karsting and high permeability with potential thermal intervals of bitumen greater than 50 meters on average over an extensive land area.
“Laricina is continuing the study of the Grosmont reservoir to better define and understand the geological framework and mechanisms necessary for oil recovery,” it adds.
Pursuing ‘The Unknown’
While the company has not started production, Schmidt says, it is positioning itself for development. At both Germain and Saleski, the company is developing pilot projects and plans to submit regulatory applications by early 2008.
“Laricina’s expansion plans will be refined with the initial results of these pilots, as we grow our production in a series of staged developments over the next 10 years,” Laricina says.
In addition, Schmidt adds, the company has a smaller project planned to field-test solvents. Laricina will conduct an injection and production test this winter.
“That establishes our initial platform for development of commercial operations for the company,” he adds. Future technical innovations will enhance Laricina’s operations as production grows and new technologies are incorporated into its staged approach.
“Our future is exciting,” he continues. “We have a range of ideas and opportunities to explore. We are also in a business environment that is excited about our energy future and that is willing to support us with capital to execute our plans.”
He notes that the future also holds its shares of unknowns. “How does a company like Laricina grow?” Schmidt asks. “How does it evolve? That’s the unknown, and that is what makes it interesting.”�
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