​Murphy Oil cancels Seal oilsands project; Baytex just bought the land and they’re not interested

Baytex heavy oil operations in the Peace River region. Image: Baytex

Murphy Oil is the second oilsands producer in a month to ask that the Alberta Energy Regulator (AER) dismiss its plans for a new in situ oilsands project.

Murphy filed a letter with the AER on December 19 requesting the application for its Seal thermal project, located in the Peace River region, be rescinded.

The company had filed the Seal regulatory application in early 2015. The 12,450 bbl/d project, which would have deployed horizontal cyclic steam (HCSS) extraction technology, was pegged with a capital cost of $624 million.

The Seal lands are part of the $65-million asset package that Baytex Energy announced it was acquiring in November 2016, from a seller later confirmed to be Murphy Oil.

“Murphy has confirmed with Baytex that they do not have an interest in continuing with this application,” Murphy said in its December letter to the AER.

Murphy started operating a HCSS pilot at Seal in mid-2013.

Baytex is a long time operator in the Peace River region. The Murphy acquisition more than doubles its land base in the area and increases its total drilling inventory by about 75 percent, the company says.

The AER cancellation follows Koch’s request in mid-December that the regulator rescind approvals for its proposed Muskwa SAGD project, citing regulatory and economic uncertainty.