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Athabasca Oil Corporation green-lights $536M Hangingstone SAGD oil sands project
28 November 2012
The Board of Directors of Canada-based Athabasca Oil Corporation has given the go-ahead to the company’s $536-million Hangingstone 1 SAGD (steam-assisted gravity drainage) Project; the company also reaffirmed that its Light Oil Division is on track to meet its year-end production target of 10,000 to 11,000 barrels of oil.
Athabasca has a resource base suitable for the extraction of thermal crude oil (bitumen) and light oil. It aspires to produce more than 200,000 boe/d by 2020, comprising a 50/50 weighting of thermal and light oil.
The 12,000 barrels per day (bbl/d) Hangingstone Project 1 comprises a central processing facility and twenty SAGD well pairs on four well pads (five well pairs per pad). The Board of Directors also sanctioned $27 million for the construction of supporting infrastructure.
Athabasca expects to develop this 12,000 bbl/d thermal oil project at a cost of $44,700 per barrel, exclusive of the $27 million of supporting infrastructure.
The drilling of SAGD well pairs is planned to commence in mid-2013, with the facility commissioning and start-up scheduled for Q4 2014. First steam is anticipated before year-end 2014, followed by first production in early 2015. Athabasca plans to follow up the Hangingstone Project 1 with two consecutive SAGD projects, bringing the area’s potential production to more than 80,000 bbl/d.
Athabasca also continues to advance its Montney and Duvernay development, in Alberta’s liquids-rich Deep Basin. Montney well results continue to meet or exceed expectations. Athabasca’s Duvernay fairway consists of more than 300 high-graded net sections with significant potential.
The Light Oil Division is currently producing approximately 4,000 boe/d. Commissioning of the Kaybob East and Saxon facilities, by mid-December, should enable Athabasca to achieve its year-end exit rate guidance of 10,000 to 11,000 boe/d.
The company also reported that an evolution in hydraulic fracturing methodology has yielded enhanced results in its third Duvernay well, 02-34-62-20W5M, at Kaybob West. The 02-34 well flowed at a final test rate (after 109 hrs) of > 6 million cubic feet (mmcf/d) plus 900 bbl/d of >50° API condensate, at a steady flowing pressure of 3,000 pounds per square inch gauge (psig).
Athabasca’s second Duvernay well, 06-10-62-23W5M, has been fractured and flow tested on two separate occasions. Following its initial completion, the well sat for a 40-day ‘soak’ period, enabling absorption of the load fluid by the under-saturated formation and enhancing production performance. The second and most recent flow test yielded a final test rate (after 44 hrs) of 5 mmcf/d plus 450 bbl/d of >50° API condensate, at a flowing pressure > 2,500 psig. The 06-10 well will be placed on production in mid-December when the Saxon facility is commissioned.
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