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Imperial Oil Ltd. is selling off the remnants of the biggest conventional oil discovery it -- or anybody else -- has made in Canada.

ARC Energy Trust said yesterday that it will spend $462-million to buy two assets from Calgary-based Imperial, including the Redwater oil field in central Alberta.

Crude first flowed from the Redwater field in August, 1948, the summer after Imperial struck oil at Leduc No. 1, a discovery deemed to be the birth of Canada's modern petroleum industry.

Leduc was first, but Redwater was bigger. The first estimates pegged Redwater's reserves at 824 million barrels -- more than double the size of Leduc's -- and that total quickly surged past one billion barrels.

At its peak in the mid-1970s, Redwater was producing 150,000 barrels of crude a day, rivalling the current output of Imperial's Cold Lake oil sands megaproject.

Today, however, that output has declined dramatically, to about 6,000 b/d.

Calgary-based ARC is also acquiring part of Imperial's holdings in North Pembina Cardium Unit No. 1, also part of the wave of discoveries after the gusher at Leduc in 1947.

The trust said yesterday it is buying a piece of oil patch history along with its acquisition of reserves.

"These are two very historic legacy assets," said David Carey, vice-president of business development.

ARC will pay for the assets by taking on debt -- its line of credit will rise to $950-million -- and by issuing trust units. It said it will issue nine million units at $26.65, raising gross proceeds of $240-million on a bought-deal basis, meaning the deal's underwriters will buy the units for resale.

The trust said the assets contain 40 million barrels of proved plus probable working interest reserves, and will boost its total reserves by more than 16 per cent.

But Arc is hoping that advanced techniques, called enhanced oil recovery, will allow it to extract much more oil. It said as much as 750 million barrels of oil is expected to remain underground after conventional production approaches are exhausted.

Arc said it is looking at using carbon dioxide to boost production, noting it already owns part of two projects that use CO{-2} to extract more oil.

The trust said it is assembling a team to develop a strategy for enhanced recovery, and that it will work with other interested parties to obtain "economic quantities" of CO{-2} from large emitters, and to develop the infrastructure needed to bring the gas to oil fields.

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