Murphy Oil Company Ltd. is engaged in crude oil and natural gas exploration and production in Western Canada and offshore Eastern Canada as well as the extraction and sale of synthetic crude oil from Alberta’s oil sands.
Murphy operates three resource plays in Western Canada:
Murphy is one of the major players in the Montney tight gas resource play with almost 145,000 net acres of land in N.E. British Columbia. First production of natural gas occurred at our Tupper Main facility in December 2008 where plant capacity was recently expanded to 105 million cubic feet per day (mmcfd). The Tupper West project, sanctioned in August 2009, is a two-phase development plan involving 275 wells in the first phase with a further 244 wells in the second phase. The Tupper West gas plant with capacity of 180 mmcfd achieved first production of natural gas five weeks ahead of schedule in February 2011. Wells drilled in these areas use horizontal multi-stage fracturing technology. The Company continually evaluates improvements to well design and completion technology to reduce the overall cost structure of the project.
At the Seal heavy oil project in Northern Alberta Murphy has over 180,000 net acres of land. The Company continues an active primary development-drilling program in the area where production rates exceed 6,000 barrels per day (bpd) from our operated wells with an additional 1,500 bpd from our non-operated wells. An Enhanced Oil Recovery (EOR) pilot kicked off late in 2010 to evaluate the effectiveness of both polymer flooding and steam stimulation to unlock the massive heavy oil resource in place on our acreage. Results of the initial polymer pilot are expected in the third quarter of 2011 and work has commenced on a full-scale field development plan, which will include commercial polymer and thermal EOR projects.
During 2010, the Company added approximately 150,000 gross acres of land in Southern Alberta in the heart of the emerging Alberta Bakken shale light oil resource play. Appraisal drilling is planned throughout 2011 to test various objectives.
The Company also owns an interest in three significant non-operated assets that provide a solid production base of 24,000 net bpd. Hibernia (6.5%) and Terra Nova (10.475%) are located in the Jeanne d’Arc Basin offshore Newfoundland and the Syncrude Canada Ltd. (5%) operation, located north of Ft. McMurray, Alberta, which extracts bitumen from oil sands and upgrades it to light synthetic crude oil.