Good to see NPE has enough capital to get them through 2010 and the bitumen is flowing. Looks like the 1st pilot well needs some tweaking but all in all, a good update.
North Peace Energy Updates Operational Progress and Provides Q2 Financial Results
finance.yahoo.com
* Press Release
* Source: North Peace Energy Corp
* On Thursday August 27, 2009, 6:02 pm EDT
CALGARY, Aug. 27 /CNW/ - North Peace Energy Corp. ("North Peace" or the "Company") releases operating and financial results for the three months and six ended June 30, 2009.
CSS Pilot Project Operations Update:
Management continues to advance North Peace's Red Earth asset to
commercial production. The pilot facility has been operational since the start
of 2009 with the principal objective of demonstrating the feasibility of
producing economic quantities of bitumen from the Company's resource and
validating economic and technical parameters to optimize the design of future
commercial development.
Steam Injection Update
- L1 Horizontal Pilot Well
- Injection was completed in April 2009
- 75,000 barrels of cold water equivalent were injected into the
well over a period of 14 weeks at an average rate of 800
bbls/day
- This represents 60% of the intended steam slug size
- L2 Horizontal Pilot Well
- Injection was completed in July 2009 and an improved steam
injection strategy was utilized compared to the L1 well
- 146,000 barrels of cold water equivalent were injected into the
well over a period of 12 weeks at an average rate of 1,700
bbls/day and a stabilized final rate of 2,100 bbls/day
- This represents 100% of the intended steam slug size
- Injection pressures in both wells indicated fracturing occurred in
the zone of interest and steam chamber containment was achieved
- The facility is not generating steam at the current time as both
wells are on oil production
- Steam injection into the L1 well will resume when its production
ceases
Production Update
- L1 Horizontal Pilot Well
- Converted to production operations in May 2009
- Cumulative oil produced as at July 31, 2009 is 7,300 barrels,
cumulative water produced is 21,000 barrels
- Peak oil rate of over 200 bbls/day was reached after six
weeks of production
- Average oil production of 80 bbls/day (May - July)
- Cumulative oil cut is 26%
- Post peak oil rate, weekly oil cuts have ranged from
35% to 55%
- Current oil production, based on field estimates, of
approximately 35 bbls/day
- Cumulative Steam to Oil Ratio ("SOR") until the end of July
2009 is 10.3
- The SOR continues to decrease as the well produces
- L2 Horizontal Pilot Well
- Converted to production operations mid-August 2009
- As expected, the early period has been dominated by water
production
- Indications of increasing oil cuts have been observed to
date
- Current oil cut is approximately 29% based on field
estimates
- Initial field estimates indicate oil production rates of
approximately 150 bbls/day
- Oil production rate continues to increase
- Peak oil production is expected to occur within the next
two months
- The production side of the pilot facility is currently handling
production from both wells
- Oil production is being trucked and sold to third parties
- The average sales price was $53.33 per barrel for June and $44.97 per
barrel for July
- No discernible sand production has been observed and produced oil
quality is approximately 10 degrees API with viscosity of 90,000
Centipoises at 16 degrees Celsius
At this early stage of pilot operations, the Company cannot make any definitive conclusions on the anticipated commercial steam injectivity or production rates. Because only 60 percent of the target steam slug size was injected into the L1 well, the expected production period will likely be shorter than anticipated and will ultimately lead to a higher than expected first cycle SOR. A refined steam injection strategy augmented by the contained heat and voidage (vacant area remaining after oil is produced) now present in the L1 well should result in significantly higher steam injection and production profiles for the second cycle. The early production results from the L2 well are positive and the aggregate data gathered from both wells over several cycles will be used in commercial development planning.
Commercial Development Update:
- Work continues on engineering for a 3,000 bbl/d pilot expansion
project
- Process design is nearing completion
- The commercial application to the ERCB should be ready for
submission early 2010
Financial Update:
- Completed a $11.6 million financing on June 23, 2009, issuing
21,109,000 common shares, 10,554,500 warrants to purchase common
shares
- Working capital of $14.3 million and no debt as at June 30, 2009
- Capital expenditures of $1.8 million in the second quarter
Louis Dufresne, President of North Peace, commented "North Peace continues to operate its pilot wells, monitoring both steam injection and bitumen production. The L1 well has produced over 7,300 barrels of oil and continues to produce. Early production data from L2 is positive and we are encouraged by the significant improvement in the well's injectivity which is likely the result of refinements in start-up procedures and steaming strategy. Operating the pilot permits us to learn a great deal about our resource and to optimize the application of CSS as a recovery process to our reservoir. We are encouraged by recent trends in oil prices and the economy, and consequently we believe the timing for us to advance our commercial development will be ideal."
Management's Discussion and Analysis of
Financial Results
This Management's Discussion and Analysis for North Peace Energy Corp.
("North Peace" or the "Company") provides analysis of the Company's financial
results for the three and six month period ended June 30, 2009. The following
information should be read in conjunction with the unaudited interim financial
statements for the three and six months ended June 30, 2009 and the audited
financial statements for the year ended December 31, 2008.
Additional information about North Peace filed with Canadian securities
commissions is available on-line at www.sedar.com.
Date of Report August 26, 2009
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Overview
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North Peace has an early stage in-situ oil sands play in northern Alberta with an estimated 2 to 3.1 billion barrels of Discovered Petroleum Initially-In-Place. The Company has a 100% working interest in 86,400 acres of Crown oil sands leases in the Peace River area. The lands have the benefit of over 300 legacy logs and are surrounded by accessible oil and gas production infrastructure. The target Bluesky zone is a regional sand, deposited in a near shore marine environment at approximately 400 metres in depth. The initial focus area has approximately 22 sections with 10 to 16 metres of oil bearing thickness, expected to be technically sufficient to advance a 30,000 bbl/d commercial project. North Peace is currently advancing the development of its resource using a robust and proven in-situ thermal recovery process, Cyclic Steam Stimulation ("CSS"). A pilot project consisting initially of two horizontal CSS wells has been built and the facility is currently operating.
Management continues to advance North Peace's Red Earth asset to commercial production. The pilot CSS plant has been operational since the start of 2009 with the principal objective of demonstrating the feasibility of producing economic quantities of bitumen from the Company's resource and validating economic and technical parameters to optimize the design of future commercial development. |
