A laboratory THAI (Toe to Heel Air Injection) reactor at Canada Chemical Corp. The box was built by Conrad Ayasse, a chemist who consults for Petrobank.Chris Bolin
Petrobank Energy Ltd., whose patented heavy oil extraction technology recently reached a major milestone, says its profit doubled in the last three months of 2009 compared with a year earlier.
Fourth-quarter net earnings were $57.1-million, or 56 cents per diluted share - compared with year-earlier profits of $28.1-million, or 34 cents per share.
Funds flowing from operations increased to $279-million, an 89 per cent increase from $147.8-million in the comparable year-earlier quarter.
Oil and gas revenue more than doubled from $206-million to $446-million.
For all of 2009, Petrobank's earnings dropped to $145-million, or $1.52 per share, compared with $244.4-million, or $2.76 per share, in 2008.
For the year ended Dec. 31, 2009, funds flowing from operations increased to $697.4-million from $666-million the previous year.
Oil and gas revenue rose to $1.1-billion from $950-million in all of 2008.
Petrobank is the creator of the 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.
An assessment by independent consulting firm McDaniel and Associates concluded last week that the THAI process works at Petrobank's Conklin heavy oil project in Alberta.
McDaniel's transition report says a best estimate of bitumen in place at Petrobank's Whitesands oil sands leases is 1.8 billion barrels if THAI is used. That's 17 per cent better than if the more common steam-assisted gravity drainage, or SAGD, technique were used.
SAGD projects use steam to thin-out the bitumen deep underground, making them voracious consumers of natural gas and water.
Petrobank said fourth-quarter production increased 87 per cent to 70,176 barrels of oil equivalent per day from 37,618 barrels in the same period in 2008.
UBS Investment Research analyst Matt Donohue said there were no surprises in Petrobank's results.
"We believe the focus for [Petrobank]now shifts towards executing on its strategy in emerging core areas, including its expanding acreage position in the Cardium, along with optimizing existing pilot projects at Kerrobert and Whitesands," Mr. Donohue wrote in a note to clients.
Petrobank owns 64 per cent of PetroBakken Energy Ltd., which focuses on light oil extraction in the Bakken region of Saskatchewan and the Cardium pool in west-central Alberta. PetroBakken has made several acquisitions recently to grow its footprint in the Cardium, Canada's biggest light oil pool.
PetroBakken was created out of a merger between parts Petrobank's western Canadian oil business and TriStar Oil & Gas last year.
Petrobank also owns two-thirds of Colombian oil producer Petrominerales Ltd.