Installation of the Water Treatment Plant
The Company's Sawn Lake oil sands properties are located within the Peace River oil sands area of Alberta where the oil sands deposits are buried deep beneath the earth’s surface and cannot be open pit mined. These oil sands deposits can be developed by drilling beneath the surface and using various in-situ recovery methods to extract the oil sands. Because these oil sands deposits must be recovered from beneath the surface they leave a smaller environmental surface footprint than open pit mining.
The Company entered into a Demonstration Project Joint Operating Agreement (the "SAGD Project”) with one of the Company's joint venture partner's on the Company's 50% (25% after Farmout) jointly owned oil sands properties located in North Central Alberta, Canada, also known as the Sawn Lake field.
The thermal recovery process chosen for this project is Steam Assisted Gravity Drainage ("SAGD"). The process involves injecting steam into the oil sands deposit through a horizontal well (the injection well) which is located approximately 5 to 7 meters above the horizontal producer well. Pressure then pushes the steam into the oil sands while the heat of the steam allows the bitumen to flow easier. As the steam soaks into the oil sands deposit, the heated bitumen flows into the lower well (the producer well) and is pumped to the surface.
The Company's joint Sawn Lake SAGD oil sands project is located in the section 30 within township 91, range 12, west of the 5th meridian of the Peace River oil sands area of Alberta, Canada.
The first SAGD well pair was drilled to a vertical depth of approximately 650 meters and have horizontal legs of 780 meters each.
Click on the QuickTime links below to see videos of the construction of our SAGD Project.
Final construction of the SAGD steam facility was completed and steam injection at the Sawn Lake SAGD demonstration project commenced in May 2014.
Production commenced in September 2014, and the steam chamber reached the top of the Bluesky sandstone formation in October 2015. Production in January and February of 2016, averaged 615 barrels of oil per day (â€ťBOPDâ€ť) with an instantaneous steam-oil ratio (â€ťISORâ€ť) of 2.1.
The average monthly production rates for this first year have outperformed the estimated production rate type curve as determined by our independent reservoir engineering firm, as shown in the production graph illustration.
It is expected that a reactivation of the existing SAGD Project facility and current SAGD well pair will be part of the potential commercial expansion along with the previously AER approved second SAGD well pair. In early May of 2016, an amended application was submitted to the AER for an expansion of the existing SAGD Project facility site which would potentially increase the operations up to a total of eight SAGD well pairs. The amended application sought approval to expand the current SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs will be needed to achieve this production level. The AER approval for the expansion of the existing SAGD Project was granted on December 14, 2017. Currently, the SAGD Project continues to move forward with engineering and identification of long lead time items towards potential expansion to 3,200 bopd and future development at Sawn Lake. The SAGD Project expansion is dependent on, numerous factors including but not limited to, the approval of the joint venture partners. Expanding the SAGD Project would be a significant step towards establishing commercially viability at Sawn Lake on a larger scale.
To date the SAGD Project has: