ANNUAL REPORT 2011 - Connacher Oil and Gas

More documents

Recommendations

Info

AR 2011 PG 16 Health, Safety, and The Environment Connacher is committed to developing its resources responsibly, and minimizing its impact on the air, land and water. The Company does this by adhering to strict operational guidelines and investing in research and technology. Moreover, in order to grow the business responsibly the Company consults with stakeholders prior to development, maximizes local benefits and opportunities and ensures environmental protection before, during and after operations. Additionally, Connacher operates in a variety of ecosystems – some with sensitive characteristics. The Company strives to conserve biodiversity, including studying the impacts on wildlife and following strict guidelines when working in environmentally sensitive areas. KEEPING a Minimal fOOTPRINT Connacher’s SAGD production operations allow it to access large subsurface bitumen deposits from only a few strategically-placed well pads. Due in large part to the use of state-of-the-art directional drilling and bitumen recovery processes, the natural landscape directly above a bitumen deposit requires little-to-no permanent disturbance in order to extract the resource. Those land areas that are disturbed are done so while adhering to the philosophy of minimal disturbance and timely reclamation. Connacher’s facilities are compact in size and efficient in design, thereby minimizing the amount of land disturbance necessary to accommodate them. USING and Reusing Water Responsibly In accordance with applicable regulations, Connacher is required to recycle at least 90% of the water used for its bitumen extraction process, with the balance being comprised of make-up water. Connacher’s in-situ production process uses non-potable make-up water, which is derived from a deep, subsurface aquifer and is unsuitable for drinking or irrigation. Connacher’s production process draws no water from any rivers, lakes, or streams, nor is any used water ever discharged into these types of water bodies. Through the use of new technologies and efficient operating practices, Connacher continues its success in further reducing the amount of water used to extract bitumen. In fact, since it began operating in 2008, Connacher’s Pod One facility has seen a 33% decrease in its make-up water consumption. Building on that success, Connacher’s Algar facility was designed to operate at an even higher level of efficiently, often reaching a 98% water recycle rate. Algar has also shown a significant reduction in its make-up water consumption since startup. Emissions Reduction Through Technology Air emissions are a reality of bitumen, crude oil, and natural gas energy production, as they are with most other viable forms of energy generation. The resource industry has a role to play by embracing new technologies and implementing bestpractices that hold promise in achieving meaningful reductions in emissions. Connacher too has a role to play. Through its 13.1 megawatt natural gas-powered cogeneration facility, the installation of highlyefficient electric submersible pumps, and its solvent co-injection process, Connacher continues to press forward with initiatives that result in a more efficient bitumen extraction process. The more efficient the process becomes, the less energy is required in order to extract the bitumen – and that results in lower emissions. MAKE-UP WATER INTENSITY 08 09 10 11 0.19 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 • ALGAR • POD 1 0.36 0.43 0.49 SUPPORTING and MONITORING Wildlife 0.63 Connacher believes that the development of bitumen resources should not occur at the expense of the wildlife populations that inhabit its operating area. Connacher continues to rely on its Wildlife Monitoring Program as a critical means by which to assess wildlife population, movement, activity and condition within its project area. Through the use of tools such as motion-activated wildlife cameras, winter track surveys, wildlife sighting cards and vehicular traffic monitors, a constant stream of valuable data is collected from within Connacher’s project area. The data undergoes a comprehensive evaluation by professional wildlife biologists and is then correlated to Connacher’s production and exploration activities within the project area in order to better understand wildlife responses to them. Key findings are then used to influence future operating and development strategies. In 2011, Connacher completed the construction of several wildlife crossing structures with the sole purpose to facilitate 0.80
AR 2011 PG 17 the movement of wildlife over its aboveground pipelines. Several unique surface reclamation techniques were used in an effort to create crossings that were to appear to be as natural as the adjacent undisturbed forest. Wildlife monitoring equipment was also installed at each DISTRIBUTION OF WILDLIFE SPECIES PHOTOGRAPHED SINCE 2008 • UNGULATES (moose, deer, caribou) / 47% • WOODLAND CARIBOU / 12% • LARGE PREDATOR (wolves, bear) / 15% • BIRDS / 14% • OTHER MAMMALS (squirrel, hare, beaver, mouse) / 13% • SMALL PREDATORS (fox, lynx, marten, fisher) / 10% • UNIDENTIFIABLE MAMMALS / 1% crossing so that wildlife activity adjacent to these structures can be extensively monitored over the next several years. Observations made at these crossings will provide for further refinement of the concept and the integration into Connacher’s future expansion plans. COMMITTED TO BUILDING LONG-TERM RELATIONSHIPS Connacher is committed to working with its stakeholders to develop and maintain long-term beneficial relationships. These stakeholders include a variety of individuals and businesses, such as investors, employees, community members, government and Aboriginal people that are impacted by Connacher’s operational development in Alberta. Connacher continues to work closely with all stakeholders to ensure they are informed of our operations, any future development plans and our progress. In 2011, Connacher completed over 200 engagements with Aboriginal stakeholders. Connacher’s Environment Impact Assessment (EIA) received no statements of concern from the local Aboriginal communities in regards to a proposed expansion at Great Divide. In addition to these engagements, Connacher employees were trained in Aboriginal Awareness to recognize the impact our operations have on the surrounding communities and people. This awareness helps to better equip our employees with knowledge to maintain these favorable relationships. In addition to Connacher’s Aboriginal stakeholder initiatives, the company conducted numerous tours of its SAGD plants in 2011. Participants ranged from politicians to business owners, regulatory boards and various media from within North America. Conducting these tours allows Connacher to engage its stakeholders and reinforce its commitment to building relationships with those interested and impacted by our projects. CORPORATE GOVERNANCE Connacher is committed to a high standard of corporate governance practices. We believe good corporate governance is in the best interest of our shareholders, and that it also promotes effective decision making at all levels of the Company’s activities. The principal role of the Board of Directors is stewardship of the Company. The Board oversees the conduct of business and dayto-day management of the affairs of the Company which is delegated to the officers of the Company. To facilitate the Board of Directors in the discharge of its duties, the Board has established five committees, being the Audit Committee, Governance Committee, Health, Safety and Environment Committee, Human Resources Committee and Reserves Committees. All committees are comprised of at least a majority of independent directors. In its pursuit of effective governance, Connacher is mindful of prevailing recommendations with respect to best practices as advanced by Canadian regulatory authorities, non-regulatory organizations and other standards which are advanced from time to time by institutional and other investors. We comply with the objectives and guidelines relating to corporate governance adopted by the Canadian Securities Administrators and the Toronto Stock Exchange. A full examination of our corporate governance policies will be provided in our Management Proxy Circular, which will be filed on SEDAR (www.sedar. com) and mailed to all shareholders in connection with our 2012 annual meeting of shareholders.
Page 1 and 2: ANNUAL REPORT 2011 WELL POSITIONED
Page 3 and 4: AR 2011 PG 1 02 HIGHLIGHTS 05 LETTE
Page 5 and 6: AR 2011 PG 3 Years ended December 3
Page 7 and 8: AR 2011 PG 5 Volatility in the oil
Page 9 and 10: AR 2011 PG 7 “Thanks to our liqui
Page 11 and 12: AR 2011 PG 9 Review of Operations I
Page 13 and 14: AR 2011 PG 11 proposals helped to p
Page 15 and 16: AR 2011 PG 13 reservoir description
Page 17: AR 2011 PG 15 Connacher Oil and Gas
Page 21 and 22: AR 2011 PG 19 MANAGEMENT’S DISCUS
Page 23 and 24: AR 2011 PG 21 reduced interest rate
Page 25 and 26: AR 2011 PG 23 Connacher’s bitumen
Page 27 and 28: AR 2011 PG 25 OPERATING COSTS (1) T
Page 29 and 30: AR 2011 PG 27 SALES PRODUCT MIX (%)
Page 31 and 32: AR 2011 PG 29 Depletion expense is
Page 33 and 34: AR 2011 PG 31 NEW NOTES We issued U
Page 35 and 36: AR 2011 PG 33 Compensation of key m
Page 37 and 38: AR 2011 PG 35 ACCOUNTING POLICIES A
Page 39 and 40: AR 2011 PG 37 The company classifie
Page 41 and 42: AR 2011 PG 39 Management is respons
Page 43 and 44: AR 2011 PG 41 The production outloo
Page 45 and 46: AR 2011 PG 43 QUARTERLY HIGHLIGHTS
Page 47 and 48: AR 2011 PG 45 Independent Auditor
Page 49 and 50: AR 2011 PG 47 Consolidated Statemen
Page 51 and 52: AR 2011 PG 49 Consolidated Statemen
Page 53 and 54: AR 2011 PG 51 Impairment of assets
Page 55 and 56: AR 2011 PG 53 Goodwill is allocated
Page 57 and 58: AR 2011 PG 55 3.11 Leases Agreement
Page 59 and 60: AR 2011 PG 57 IAS 1 Presentation of
Page 61 and 62: AR 2011 PG 59 Reconciliation of seg
Page 63 and 64: AR 2011 PG 61 8.1 Petroleum and nat
Page 65 and 66: AR 2011 PG 63 10. PROPERTY, Plant a
Page 67 and 68: AR 2011 PG 65 Accounts receivable a
Page 69 and 70:
AR 2011 PG 67 December 31, 2010 - C
Page 71 and 72:
AR 2011 PG 69 13.3 Refinancing of l
Page 73 and 74:
AR 2011 PG 71 Changes in present va
Page 75 and 76:
AR 2011 PG 73 The provision for inc
Page 77 and 78:
AR 2011 PG 75 The following table s
Page 79 and 80:
AR 2011 PG 77 19. FINANCE Charges F
Page 81 and 82:
AR 2011 PG 79 Compensation of key m
Page 83 and 84:
AR 2011 PG 81 Estimates Hindsight w
Page 85 and 86:
AR 2011 PG 83 Reconciliation of Con
Page 87 and 88:
AR 2011 PG 85 27.3 Asset and Liabil
Page 89 and 90:
AR 2011 PG 87 The following table s
Page 91 and 92:
CORPORATE INFORMATION Board of Dire
show all

ANNUAL REPORT 2011 - Connacher Oil and Gas

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?