On Aug. 10, 2012, Pan Orient increased its ownership of Andora Energy Corporation to 71.8 per cent through an additional $24.7-million investment in Andora pursuant to a rights offering by Andora.
Proceeds from the rights offering have been used for the procurement and construction of a thermal facility, drilling of one horizontal well pair, and operations in respect of its Sawn Lake steam-assisted gravity drainage (SAGD) development project at an estimated cost, including operating costs, of $23.5-million.
Additionally, Andora acquired a private company in July which provides Andora with proprietary thermal facility design/process capabilities, and expands the Andora team with thermal facility design and operating specialists.
Steam injection is planned for Q2, with the first oil production anticiapated for Q4/13, with up to 1000 bpd being the capacity of the pilot plant.
SAGD is a well tested and advancing production technology and is used by most oil sands projects in western Canada.
S\awn Lake has 214 million barrels of recoverable oil, with additional exploration upside.
At a 10 % discount, using approx $80 WTI, the NAV has been estimated to be $612 million.
The intent of the pilot plant is to demonstrate and confirm projected economics, leading to full production potential, which one might estimate to be in the 30,000 to 50,000 bpd rate.
At full production, the value of Sawn Lake will be many times its 10 % discounted in situ NAV of $612 million.
Given managements penchant for developing assets to the point of profitable sale, one might speculate that Sawn Lake will be sold before it moves to full commercial production...