Petrobank Energy and Resources Ltd. says it has suspended operations at its heavy oil recovery project in Conklin, Alta.
The company said Thursday it is looking at whether to integrate the project into its wider May River oilsands development nearby or abandon it entirely.
Petrobank is using the projects to showcase its Toe-To-Heel Air Injection, or THAI, method of drawing bitumen out of the ground using no water and minimal natural gas.
The THAI process uses air to ignite a flame underground, which softens the gooey bitumen enough for it to flow to the surface.
Petrobank said it has suspended air injection at the Conklin site after completing so-called wet combustion tests underground.
"We have completed all of our near-term testing operations scheduled for Conklin and we will now suspend the facility until we finalize plans to either integrate it into the larger May River operations or abandon the site," the Calgary oil and gas company said in a release.
"We recently encountered evidence of combustion gas possibly migrating up into the McMurray A formation, where we own the bitumen rights, and we will continue to evaluate data . . .
"The suspension of our Conklin operations will not impact our May River development plans."
Meanwhile, Petrobank said that Alberta's energy regulator — the Energy Resources Conservation Board — has set a March 6, 2012 hearing date to consider the company's development plan for the May River oilsands project.
"Our consultation efforts with the two parties who have filed valid statements of concern continue, in our ongoing attempt to clarify and resolve outstanding issues prior to the hearing," Petrobank said.
At May River, the company and its Whitesands partnership are planning a project that will initially produce up to 15,000 barrels of heavy oil a day and can eventually be expanded to 100,000 barrels.
Petrobank produces oil and natural gas in western Canada through two business units.
Its 59 per cent-owned PetroBakken Energy Ltd., focuses on light oil operations in the Bakken and Cardium resource plays in Saskatchewan and Alberta and natural gas exploration in the Horn River and Montney gas zones in northeastern B.C.
Whitesands owns oilsands leases in Alberta and oil and gas rights near Kerrobert Sask.