Pembina And Redwater
Production Steady and Development Continues
Pembina was ARC’s first operated core area and remains an excellent Trust asset due to its low decline rate and long economic reserve life. This area produces high quality light, sweet oil and has an economic reserve life in excess of 50 years. Since 1996, ARC has drilled 48 wells in Pembina. Most of the properties are under waterflood with resulting long-term, stable production rates and high reserves recovery. In 2005, ARC further strengthened its position in the Pembina area with the acquisition of a 45.57 per cent working interest in the North Pembina Cardium Unit # 1 (NPCU) and a principal interest in the Redwater field. In 2009 production in Pembina and Redwater was 13,560 boe/d.
Area In Detail
Key Property - Redwater
Redwater is another major area with exciting opportunities for ARC and its unitholders. Redwater is one of the largest oil pools in Canada with 1.3 billion barrels of discovered petroleum in place (DPIP). It was discovered in 1948 and was drilled up to 40 acre spacing by 1955. ARC purchased its initial working interest in the area in December 2005. Current production in Redwater over 4,000 boe per day of high netback light oil. ARC’s average working interest in our operated wells is 98 per cent. ARC has been successful at increasing production by following disciplined production practices, reactivating old wells, and drilling new Leduc wells on structural highs identified by small 3-D seismic surveys.
The most exciting prospect for Redwater is the CO2 enhanced oil recovery potential. If a CO2 flood at Redwater is proven to be commercially viable, it could potentially provide an incremental 15,000 boe per day of production. EOR could access anywhere from five to 15 per cent of the DPIP – anywhere from 50 to 165 mmboe to ARC’s interest. Under an EOR program, the reservoir could take in 5,000 to 15,000 tonnes of CO2 per day – equivalent to the total emissions of one or two refineries/upgraders. Since the acqusition of Redwater in 2005 ARC has drilled and built infrastructure to conduct a CO2 pilot injection project. CO2 injection began in 2008 and is ongoing with a second production well being added in the second quarter of 2009. To date results have been encouraging, however we will not know if the pilot is successful in mobilizing incremental volumes of oil until sometime in 2010. The project is a clear example of ARC's willingness to use technology to evaluate methods that may increase production in the long term.
ARC has also teamed up with the Alberta Research Council in a project known as the Heartland Area Redwater Project. The objective of HARP is test and evaluate the very large water staurated, porous space of the Redwater reef as a storage space for CO2 emissions.
Considerable uncertainty exists over when and even if large scale commercial CO2 projects are viable in Alberta. It will take cooperation from all parties – governments, emitters and producers to make EOR through CO2 injection commercially viable.
Key Property - Pembina
Assets in the Pembina area were a key piece of the properties purchased to form ARC in 1996. These long reserve life index assets have a low rate of decline and should provide production for years to come. In 2009 ARC applied knowledge gained from its Dawson area with the drilling of horizontal wells in the Pembina field. At this point in time two horizontal wells have been drilled with encouraging results. Both wells were completed using multi-stage fracturing techniques.
Like Redwater, Pembina is an excellent candidate for CO2 EOR. A portion of the Pembina capital will be directed to preliminary pilot activities to evaluate the potential for CO2 EOR projects.
Field Office
Superintendent-Pembina: Rob Meads
6421 - 50th Avenue, Drayton Valley, Alberta T7A 1R8
Tel: (780) 542-5552-----Fax: (780) 542-7552
Superintendent-Redwater: Peter Dickson
P.O. Box 1090, Redwater, Alberta T0A 2W0
Tel: (780) 942-6515-----Fax: (780) 942-6539