Connacher Oil & Gas Ltd. has grown into a fully integrated oil sands company valued at more than $1 billion.

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Connacher Oil & Gas Ltd. may be smaller in size than many of its peers working in Alberta oil sands, but it is this unique distinction that sets it apart, according to Vice President of Refining and Marketing Cameron Todd. “We are actually one of the first small companies to develop in the Alberta oil sands, and are the only fully integrated small oil sands company, since we also own and operate a 9,500-barrel-per-day heavy oil refinery in Montana,” he adds.

“But, we operate a very lean organization, with only 40 people in the head office and 160 employees total,” he adds.

Beginning in 2001, the company was a small, conventional oil and gas company. But in 2004, when the company acquired its first Alberta oil sands lease, Connacher vaulted into the big leagues.

“At the time, there were hardly any other landowners or developers in the area,” he says. “Most of the land was still owned by the government.

“We were able to determine that there was a potential commercial amount of oil in the ground, and were fortunate to purchase the property at a fraction of the price paid by subsequent developers in the region,” he adds.

The company currently has 100 percent interest in more than 95,000 acres of oil sands leases that are conveniently located near the local highway to Fort McMurray, center of the Alberta oil sands boom. This strategic location allowed Connacher to transport its drilling rigs into place outside the normal drilling season.

“We were able to do some drilling the year we purchased the land, and confirmed that there were attractive oil sand development possibilities in the area,” Todd says. “This had a profound impact on the company, because we were able to get a head start on a commercial project at that time.”

‘Outside of the Box’
The unique characteristics of the Alberta oil sands required the company to think outside of the box and develop ways to stimulate the bitumen.

“Since the oil is so thick in this region, it won’t flow into the oil well, so we have to use methods such as heating it in situ,” Todd explains. “We do this by heating the reservoir, using steam-assisted gravity drainage (SAGD).”

How it Works
The company drills two horizontal wells as a well pair, one over top of the other, and injects heated steam into the top well, helping the oil flow into the bottom well. This method is being implemented in Great Divide, Alberta, the company’s current project – which is expected to produce 10,000 barrels of oil per day by next year.

“This is a very major undertaking for such a small company,” Todd asserts, “as we had to raise $265 million and execute on a complex project. We were able to do so in record time. Now, we are already working on our second 10,000-barrel-per-day project, which we call Algar.”

However, large-scale projects such as Algar and Great Divide can present unforeseen challenges, according to Todd.

The key to success, he says, is strong management of both time and people. “These projects are extremely expensive, and they require the coordination of a large number of people, equipment and supplies,” he says. “To put all that together requires a great effort in project management."

Connacher’s management staff has extensive experience in the industry, which allows it to anticipate common issues and challenges and prepare as necessary, he says.

“By the time we first acquired the land, key personnel in our company had already been very successful in heavy oil projects and project management,” Todd says. “Although Great Divide is our first project in the region, most of Connacher’s team already had a great amount of experience developing similar projects. Our greatest strength is our experience, project management and execution ability.”

A Focus on Execution
Todd himself joined the company a year-and-a-half ago with more than 25 years of experience in exploration, development, production and downstream. Members of management have similar levels of experience, he adds.

“The company has focused on hiring top-quality, experienced people who have been working in these types of projects for many years,” he says. “Where we excel in the industry, however, is the fact that we don’t have layers of management to go through in order to make decisions. [The company is] focused on execution more than anything else.”

Strategic Growth
Since 2001, this small, conventional oil company has grown into a fully integrated oil sands company valued at more than $1 billion.

With the planned developments on its plate the company hopes to extend its growth to more than 53,000 barrels per day by 2014. According to Todd, Connacher plans to do so building on its experience, project management and execution strengths.