The Alberta Energy Regulator has given Cenovus (CVE:TSE) the go-ahead on its proposed Grand Rapids thermal oil sands project, 300km north of Edmonton.
The project is adjacent to Cenovus' exsiting Pelican Lake Wabiskaw operation in the Greater Pelican region. Grand Rapids will produce approximately 180,000 barrels of oil per day at maximum capacity and will be developed in multiple phases.
Cenovus noted in a statement on Thursday that it would make a decision later this year on the timing of the project's development.
This will be the company's fourth oil sands project. Another project, Telephone Lake, is in the regulatory pipeline.
"The company has been operating a steam-assisted gravity drainage (SAGD) pilot project at the site for more than three years and has gained a strong understanding of the reservoir," Cenovus wrote. "Recent production results from the two well-pair pilot have been encouraging. Cenovus plans to continue operating the pilot project to gather additional information on the reservoir."
The company's share price rose from around $29.50 per share before the announcement on Thursday to more than $30 by Friday afternoon.