Message #6 From:
NewsBot Date: December 15, 2006 08:59:00 AM
PTCH News AXcess News: Canadian Oil Sands Could Fill Rising U.S. Demand for Energy
NEW YORK--(BUSINESS WIRE)--Between growing unrest in the Middle East and OPEC's determination to
cut production rather than increase it, Canada's oil sands are becoming
a more viable resource to the United States. Recently two energy
companies, TransCanada (TSX: TRP) and Patch International (OTCBB: PTCH),
announced strategic developments that could in the coming years help
reduce America's dependence on OPEC.
TransCanada Corp. said Wednesday that it has applied with the National
Energy Board (NEB) for approval to build the Canadian portion
of its 2,965-kilometer (1,842-mile) Keystone pipeline, expected to be in
operation by late 2009.
TransCanada previously applied to NEB for approval to convert some of
its mainline Canadian natural gas pipeline to handle oil sands crude
from northern Alberta; about 400,000 barrels per day. The Keystone
pipeline is designed to transport crude oil to refining centers in the
U.S. Midwest. The U.S. portion of the project includes approximately
1,730 kilometers (1,075 miles) of new pipeline construction and will
require approvals from a variety of U.S. agencies at the state and local
levels.
TransCanada's $2.1 billion project is designed to take advantage of
rising demand in the U.S.
Patch International, Inc. announced Monday, Dec. 4, that it was
acquiring 100% of Damascus Energy Inc. This will give Patch control of
what might be the largest oil sands play of any Canadian junior energy
company, consisting of 32 square miles of land approximately 40 miles
northwest of Fort McMurray in central Alberta known as the “Dover
Oil Sands Project.”
The deal is costing Patch nearly $10.5 million in common stock, or
11,660,231 shares. The company must also pay $7.5 million in cash and
drill a number of vertical test wells, and complete a 2D seismic program
on the properties on or before March 31, 2007, in order to move from a
30% stake to 100%.
In a telephone interview, Michael Vandale, Damascus Energy's President,
said, “The equipment has already been lined up
for the project and we will easily be able to meet our drilling and
seismic deadline.”
Vandale's company tied up the Dover project, which was owned by Bounty
Development Ltd., and brought Patch in to fulfill the transaction. The
deal is slated for closing December 15, 2006. Bounty is to receive the
cash to reimburse its property acquisition costs as well as 15% of the
Patch common shares being issued.
Patch plans to list its shares to trade on the AMEX after the Damascus
acquisition is complete. Vandale told AXcess News that a pilot plant
capable of producing 25,000 barrels per day is planned that would use
steam-assisted gravity drainage, or SAGD, technology. The Dover region
is active with SAGD projects in various states of development, Vandale
explained.
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