Deer Creek Energy Begins Construction on Second Phase of its Joslyn Creek Oil Sands Project with More to Come

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Deer Creek Energy Limited (TSX:DCE ) (Calgary, Alberta) has started construction activities on its Phase II expansion at its Joslyn Creek Lease 24 oil sands project, located in the oil sands-rich Athabasca region of Alberta, about 50km northwest of Fort McMurray. The engineering contract for the Phase II expansion was awarded to Bower Damberger Rolseth Engineering (Calgary, Albert) in late 2003. For details see related news article - Deer Creek Energy Limited Nearing Construction on Joslyn Creek Oil Sands Project

In the first phase of the project, Deer Creek constructed a 600-barrel-per-day (BBL/d) pilot plant. The Phase II expansion plan will expand the Joslyn Creek property to the commercial stage, with a capacity of 10,000 BBL/d of bitumen production. Deer Creek will employ Steam Assisted Gravity (SAGD) technology at the property to extract the heavy oil from the ground. Completion on the Phase II expansion is expected in early to mid-2007, and production will begin to ramp up immediately.

Deer Creek is already planning two additional expansion phases to increase bitumen production by nearly 30,000 BBL/d of bitumen, split into to equal expansion phases. The Phase III & IV expansions will be staggered in stages, separated by about a year. Deer Creek hopes to complete regulatory permitting and begin purchasing equipment for Phase II by mid-summer 2006. Construction is slated to begin on Phase III in late 2006 or early 2007. Phase IV will follow Phase III construction kick-off and completion dates by about a year. All together, the four phases of the project will cost Deer Creek over $250 million to put into service.

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