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Canadian Oil Sands Could
Fill Rising U.S. Demand for Energy
by Alan Fein - AllPennyStocks.com News Reporter
December 15, 2006 (AXcess News) - 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 oming 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
kilometres (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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