The pilot location is on Andora’s 100%-owned acreage within the South block of its Sawn Lake property in the Peace River oil sands region.
Andora is a 53.2%-owned subsidiary of Pan Orient Energy Corp. (Pan Orient)
The objective of the pilot is to demonstrate the feasibility of producing bitumen from the Bluesky zone at economic rates as well as the technical feasibility of the SAGD thermal recovery process allowing Andora to validate the design of the commercial project. The pilot will consist of a single well pair and associated steam injection and bitumen production facilities for an estimated cost of $15-million. All season access into the site is currently under way with anticipated completion for late 2009. The timing for equipment procurement, construction of the project facility and drilling of the well pair has yet to be determined. Habanero owns 700,000 common shares of Andora which Habanero acquired for $350,000. In September 2006, Habanero was given the option to tender its shares in Andora for cash and shares in Pan Orient valued at approximately $1.25 per share but Habanero elected not to exercise this option.
Jason Gigliotti, President of Habanero stated, “Andora Energy is making strides to attempt to put their SAGD project into production. They have achieved milestones that potentially put them on track to achieve this goal. Management continues to believe in the future growth of the Alberta Oil Sands, which Habanero has an interest in significant acreage in this region, as well as having upside growth potential through the Andora shares Habanero owns. Recently, PetroChina invested $1.6-billion in Calgary’s Athabasca Oil Sands Corp., which is a clear sign that substantial investment dollars are starting to flow back into the Oil Sands.”
