Peace Files Cyclic Steam Stimulation Pilot Application with EUB --
TSX-V: NPE
CALGARY, Oct. 19 /CNW/ - North Peace Energy Corp. ("North Peace" or the
"Company") announces it has formally filed its application with the Alberta
Energy and Utilities Board ("EUB") for a two well, 1,000 bbl/d Cyclic Steam
Stimulation ("CSS") pilot on Block B South of its Red Earth landholdings.
The principal objective of the CSS pilot is to demonstrate the
feasibility of producing economic quantities of bitumen from the Bluesky
formation in the Red Earth field by thermally decreasing the bitumen
viscosity. The pilot test will be conducted on Sections 26 and 35-88-09 W5M.
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High pressure CSS with horizontal wells was chosen for a variety of key
attributes the Red Earth property demonstrates based on results to date.
Namely,
- Net Pay typically less than 16 metres,
- Viscosities average 227,000 cp,
- Thin discontinuous minor clay laminations inhibiting vertical flow
paths,
- The depositional environment is that of a coarsening up sequence with
degrading permeability and oil quality towards the bottom of the
reservoir,
- Absence of thief zones,
- Thick continuous capping shale,
- Encouraging numerical modelling results, and
- A comparable commercial producing analogue at Canadian Natural's
Primrose South CSS project.
The pilot will be used to gather key data such as:
- Injection rates,
- Injection pressures,
- Production rates,
- Production temperatures,
- Base sediment and water measurements,
- Steam to oil ratios,
- Produced gas rates and qualities,
- Temperature profiles on the horizontal wells,
- Temperature profiles on the observation wells, and
- Pressure responses on the observation wells.
The pilot will be used to fine tune several other key operational
assumptions that will affect a commercial development strategy. Namely,
- Horizontal inter-well spacing,
- Length of horizontal sections,
- Design specifications for heat exchange systems,
- Design specifications for water recycle systems, and
- Gas handling requirements.
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Before beginning construction of the pilot project, North Peace will
complete its previously announced Q4-2007/Q1-2008 $10 million capital program
on the Red Earth property. This includes the drilling of three wells in
October/November that will be used to gather more information on the resource
and to position the two horizontal wells for the pilot project. These wells
will also be used as observation wells to gather temperature information from
the pilot to better understand steam chamber development. The Q1-2008 portion
of the capital budget includes the drilling of five delineation wells in the
vicinity of the pilot area to provide resource information for future
commercial development. These wells will be supplemented with two exploration
wells in other areas of Block B South.
Subject to EUB and Board of Directors approval, the Company plans to
begin construction of the pilot project in the third quarter of 2008, which
would allow steam injection to commence in the fourth quarter of 2008. Prior
to receipt of approvals, the Company is advancing the required engineering
work and is in the process of securing long-lead items including a 50 mmBTU
steam generator. Total costs for the pilot facilities including the two
horizontal wells will be in the range of $15 to $20 million.
North Peace's President and CEO, Louis Dufresne, commented "Submitting
the pilot application is a major milestone for North Peace. With the
predictable nature of the geological setting, a marine depositional
environment, and the existing well logs through the Company's reservoir,
geological risk is very low. Our next step is to demonstrate that the
technological application of CSS is suitable to our resource. The pilot
project will allow us to do just that. We are moving through well-defined,
prudent strategic steps to unlock the full value of our resource."
The full application can be found on the Company's website:
(www.northpec.com). |
