Connacher Oil and Gas Ltd. , a Calgary-based oilsands producer and global operator, says it has approved the restart of the Algar oilsands project after closing a major financing for the project.
Connacher said the sale of $200-million in senior secured notes had closed, raising $187-million for the company. With the financing complete, the company's board has approved a restart of Algar, which was halted last year during the credit crunch and falling oil prices.
Algar is Connacher's second 10,000 barrel per day oilsands project, which uses steam-assisted gravity drainage, or SAGD, technology.
The money raised will be used for working capital and general corporate purposes, including to finance part of remaining construction, drilling and completion costs associated with Algar and drilling SAGD well pairs, Connacher said.
In SAGD, oil producers inject steam via pipeline to melt tar-like heavy oil deep underground and then pump the oil through another pipeline to the surface. Sensors are required to monitor pressure and heat in the pipelines and reservoirs.
Connacher Oil and Gas already operates the 10,000 barrel per day Great Divide SAGD plant in northeastern Alberta as well as conventional Canadian production and reserves and a 9,500 barrel per day heavy oil refinery in Great Falls, Montana.
The company also owns 24 per cent of Petrolifera Petroleum Ltd. , a production and exploration company active in Argentina, Colombia and Peru in South America.