Canada’s oil reserves tend to slip through the cracks a bit when it comes to industry recognition -- as Saudi Arabia is the 800-pound elephant in the room -- but the fact remains that the Canadian reserves are vast. In fact, with its 175.2 billion barrels of proven reserves, Canada ranks third in the world and is the only non-OPEC member in the top five countries.
With regards to natural gas, Canada takes the same rank of third in the world as a producer and exporter. Canada plays a critical component of global energy trade, is the largest source of imports for the U.S. and should continue to see international interests grow as political upheaval continues to happen in the Middle East and Asian companies continue to search for land acquisitions.
Oil production in Canada primarily comes from the oil sands of Alberta, the Western Canada Sedimentary Basin, and the offshore oil fields in the Atlantic. Looking to capitalize on the prolific oil supplies in Alberta and the Western Canada Sedimentary Basin, Carmen Energy Inc. (TSX-Venture:CEI) has been having a busy month. Carmen has several projects ongoing in Alberta including the Jumpbush properties (SE Alberta), the Ferrybank properties (central Alberta), the Sylvan Lake area properties (southern Alberta) and the Hamburg properties (NW Alberta).
Early in September, Carmen entered into a subordination agreement with Solara Exploration Ltd. to participate in a farmout agreement to drill two test wells in the Sylvan Lake Area of Alberta. Under the terms of the agreement, Carmen is paying 25% of all costs to completion of testing to earn a 16.25% working interest in the well and entire section of land the well is located on.
One of the wells was completed to drill depth and cased for further testing as announced last week. A service rig is slated to arrive to commence completion and testing operations, with results expected early October 2011.
Additionally, Carmen entered into a Letter of Intent on September 16 to acquire all the issued and outstanding shares of Shorthorn Exploration Ltd., a Calgary-based private company engaged in the exploitation and development of gas and oil reserves in Alberta and Saskatchewan with producing oil wells presently.
Tuesday, the Company announced, along with its partners, that the second Leduc reef light oil exploration well (12-22-38-4-W5) in the Sylvan Lake, Alberta area has been spud. While volume remains light (CEI has less than 30 million shares outstanding), share price has been steadily climbing from the $0.25 area since they began trading early in 2011.
In a channel between 45 and 60 cents since July, shares are pushing back to the upper side of the channel as developments continue to progress; closing Tuesday at $0.55.
