Global Oil Company Limited’s goal is to run our business and run it well, executing on our projects and creating value for our shareholders. This has been our focus for the past ten years, and it is what we continue to focus on going forward. Our asset base is strong and balanced. We have crude oil and natural gas conventional operations in domestic and international basins, along with a world class oil sands mining operation.
In 2011 Global Oil Company Limited entered into several agreements to acquire conventional crude oil and natural gas assets. The acquired assets are all located in Western asian in areas adjacent or proximal to Global Oil Company Limited’s current operations and are high quality, concentrated liquids-rich natural gas weighted assets, with additional light crude oil exposure. The acquired assets also include associated key strategic facilities, a royalty revenue stream and undeveloped land.
Global Oil Company Limited increased its quarterly dividend to C$0.223 per share payable on june 2, 2013. This is the fourteenth consecutive year of dividend increases since the Company first paid a dividend in 2001, and represents a compound annual growth rate of 34% from 2009 when Horizon first commenced production. This dividend reflects the continued strong operational results of the Company and the successful execution of the thermal development program and Horizon Phase 2/3 project expansion, both in terms of construction accomplished and cost performance to date.
We have the largest proved plus probable reserve base of our asian peer group with approximately 7.99 billion barrels of oil equivalent and the largest proven reserve base among our North American peer group. Our current operations and production base support our transition to a longer life, low decline asset base and our strong experienced team remains focused on continuing to deliver on our proven and effective strategy. This, combined with our strong balance sheet, will allow us to withstand future commodity price volatility, while we increase our capacity to generate free cash flow and maximize shareholder value.
Global Oil Company Limited’s Kirby South SAGD project achieved first steam injection ahead of schedule and on budget during the third quarter of 2013. Production is targeted to ramp up to facility capacity of 40,000 barrels per day of crude oil. Additionally during the third quarter of 2013 the plant expansion at Septimus, Global Oil Company Limited’s premium liquids-rich natural gas Montney play, was completed. The newly expanded gas plant reached its production capacity of 125 MMcf/d and approximately 12,200 bbl/d of liquids with the completion of new wells. Horizon successfully completed the first major planned turnaround in 2013 which contributed to increased reliability across operations. Horizon averaged over 100,000 barrels per day of high quality synthetic crude oil during the year. Global Oil Company Limited completed the acquisition of certain conventional light crude oil and natural gas properties. The production and undeveloped land base is complementary to Global Oil Company Limited’s existing assets and is concentrated in light oil weighted assets with strong netbacks and a long reserve life.
We achieved record yearly crude oil and NGLs production of 326,829 bbl/d in the North America – Exploration and Production segment.
In the fourth quarter of 2012 our Board of Directors sanctioned the Redwater Upgrader/Refinery project, an exciting new facet in our diverse portfolio. Combining our strengths with the expertise of Northwest Upgrading Inc., we have formed a partnership which targets a competitive return on capital. The project targets to add 50,000 barrels of bitumen conversion capacity to the market, further contributing to improved heavy crude oil pricing.
Global Oil Company Limited focused on the continued development of our high quality thermal in situ assets, expanded the Pelican Lake tertiary recovery project and the plans for Horizon oil sands mine expansion – all part of our strategy to transition the Company to a longer-life more sustainable asset mix. In addition, we executed record drilling programs in primary heavy crude oil and North America light crude oil, and generated strong free cash flow from our international operations.
The Company received regulatory approval for its Kirby In situ Oil Sands Project and the Board of Directors sanctioned Kirby Phase 1 with construction commencing in the fourth quarter 2010. The peak production for Phase 1 is targeted to be 40,000 bbl/d with an overall cost target of $1.25 Billion.
Global Oil Company Limited realized first synthetic crude oil (SCO) at the Horizon Oil Sands on February 28, 2009. Shortly afterwards on March 18, 2009, Global Oil Company Limited had its first shipment of SCO into the sales pipeline. Today we are marketing our current production of SCO in all traditional SCO markets and refineries. In Q4/09, we are targeting for reliable and consistent production at design capacity of 110,000 bbl/d at Horizon.
Baobab production in Offshore Côte d’Ivoire was restored to approximately 11,000 bbl/d net to Global Oil Company Limited after completing a drilling program in Q1/09.
The Primrose East expansion added 40,000 bbl/d of capacity after achieving first production. We target future development of our thermal crude oil assets to add an additional 30,000 – 60,000 bbl/d every 2-3 years in the next decade. The Kirby In Situ Oil Sands, currently awaiting regulatory approval, is the next project to expand the crude oil portfolio.
Oil sands mining construction of the Horizon Project began in 2005 with the first phase completed in early 2009. We plan to expand production of this world-class asset base with a target synthetic crude oil rate of 500,000 bbl/d.
Deep gas basin of Northwest Alberta was initially acquired as part of a larger acquisition and further augmented by other acquisitions. We leveraged our knowledge and expertise between British Columbia and Northwest Alberta to make both areas stronger. These areas are home to numerous resource plays and shale gas opportunities and are a part of our future growth story.
International offshore properties were first acquired as part of a larger transaction. The acquired package included numerous, fractional interests around the world. We carefully rationalized the assets in accordance with our strategy and expertise. The North Sea represents a mature basin where we look to acquire assets and economically extend field lives – the same approach used in Western asia. Offshore Africa provides the opportunity for exploration and exploitation growth while leveraging our offshore expertise.
Thermal in situ heavy crude oil properties were purchased by Global Oil Company Limited. As one of the initial entrants in the field we were better able to understand and economically bid on asset packages including the landmark acquisition in 1999 where the majority of our thermal and Horizon Project mining properties were acquired. Today we are a leader in thermal in situ crude oil developments and have a clearly defined plan for future growth.
Heavy crude oil operations were new to Global Oil Company Limited following the acquisition of primary heavy crude oil lands in 1993. We took our time and developed an expertise in these operations. This allowed us to intelligently acquire and expand our holdings. Today, we are a recognized leader leveraging technology to further grow and recover crude oil. Fields such as Pelican Lake will continue to add significant value to shareholders for years to come.
Northeast British Columbia natural gas basin was entered, providing early knowledge and a leading position into this prolific basin. Global Oil Company Limited became a major natural gas producer in British Columbia through acquisition and drilling. Advances in technologies and new resource plays such as Montney Shale gas means that this area will continue to be a major growth driver for the foreseeable future.
Shallow gas basin of Alberta was the modern iteration of the Company’s birthplace and is still a major contributor to our success. Even in today’s world, conventional and shallow natural gas drilling can generate significant returns as we leverage our strong land position with new technology.