NPE Company Snapshot
BullBoards Member Forums My BullBoards
Jump to NPE Forum
SUBJECT: Letter from CEO Posted By: Calgary_boy
Post Time: 10/26/2007 16:52
« Previous Message Next Message »
The following is a letter from Louis Defresne, President & CEO of North Peace Energy
_______________________________________________________________________________
FYI:
Per the attached Tristone graph, the impact of the implementation of the New Royalty Framework to NPE is minimal at $75/bbl. Our own modeling is in line with Tristone’s numbers. At $90/bbl, our NPV is reduced by 12% (irr drops 2%). For complete details and analysis, follow the link below to Tristone Capital’s report of this morning.
Business as usual at NPE. Yesterday we spudded the first of our three observation wells. We have recently filed our application to the EUB for our two well CSS pilot project. We anticipate a short time to approval for this given Baytex has received approval for a similar CSS pilot at Seal in Peace River in about 4 months. We thus anticipate building the facilities during summer ’08 with first steam in the ground early fall ’08 and bitumen production before year end ’08.
Yesterday, we secured a critical piece of the pilot facilities with a down payment on a 50 mmBTU steam generator.
Internally, we are advancing CNRL’s own CSS Primrose project as an analog to NPE’s Red Earth Project. They both have similar reservoir characteristics (porosity, oil saturation, permeability, heterogeneity, oil gravity and viscosity) and most importantly, Primrose is profitable in thicknesses equivalent to ours, using CSS. Compounding all this, is the fact that both CNRL’s Primrose and NPE’s Red Earth are in marine depositional settings which strengthens the predictability and continuity of thickness and other characteristics encountered to date.
To sum it up, the Primrose analog gives us great confidence we have sufficient recoverable resource to support at least a 30,000 bbl/d project in Block B South alone.
We believe the recent sell-off due to uncertainty around the royalty situation, which is now sorted out for us, has created a tremendous buying opportunity.
We will be presenting at the Calgary based SEPAC conference on November 5th with an updated presentation.
|
