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OMERS |
Bids Due: November 22, 2011 at 12:00 noon MST |
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Contact: 403-299-8453
403-299-8449 |
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Introduction Letter |
Foreword & Disclaimer | Garrington Asset Sale Overview |
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GARRINGTON CARDIUM UNIT #1
The Companies collectively own a 35.31805% working interest in the Garrington Cardium Unit #1, approximately 110 kms north of Calgary, Alberta NAL Resources Limited (“NAL”) is the Unit Operator.
Production
From February to April 2011, the Companies production averaged 21 boe/d including 20 bbl/d of light oil, 1 bbl/d of NGLs and seven Mcf/d of gas. There are currently eight vertical wells active which produce primarily from the Cardium B Sand. Several wells have also produced from the Cardium A sand.
Reserves
Proved Developed Producing reserves including 50.9 Mbbls of oil, 0.8 Mbbls of NGLs and 32 MMcf of solution gas were assigned to the Companies interest based on decline curve analysis. Additional Probable Producing reserves of 9.5 Mbbls of oil, 0.2 Mbbls of NGLs and 6.0 MMcf of gas were assigned assuming better recovery.
Facilities
The Unit wells are pipeline connected to a Unit owned facility at 10-18-036-05W5 (test separators & satellites) and then flowed to a non-Unit facility for processing. After treatment sales oil is shipped directly in to the Plains Midstream Canada ULC pipeline. Produced water is disposed at an NAL operated facility at 11-26-35-05W5. Unit solution gas is flowed to the Keyera Strachan Gas Plant or Sylvan Lake West Gas Plant via NAL operated compressors at 11-26 and 06-36-05W5.
Marketing
The 40° API sales oil and gas are sold to Plains Midstream Canada under a short term, 30 day contract.
Geology/Historical Development
Similar to the Garrington non-Unit lands, both the Cardium A and B Sands occur as productive zones in the Garrington Cardium #1 Unit. The lowermost conglomeratic B Sand, in a continuation of its narrow NW-SE trend, was the primary target and historical producer in the Unit. The overlying A zone exhibits similar reser voir characteristics to the A Sand on the non-Unit lands and has only been completed in a handful of wells in the Unit. Structure on the A Sand rises dramatically to the NE forming an elevated ridge parallel to the length of the Unit boundary.
Development Potential
There are six possible Hz locations targeting the A Sand to access significant remaining light oil reserves.
The 10-03-036-05W5 well Cardium producer highlights the A potential within the Unit; the well was only completed in the A Sand (the B Sand is not present) and has recovered 456.4 Mbbls since being placed on production in 1962. This represents a 10 fold increase in the recovery of most area A Sand (only) producers. The well also had strong start rates of ~60 bbl/d of light oil. Log and core data from the well suggest reservoir characteristics typical of the widespread A zone, however the well is situated in a structurally high area relative to existing producers along the length of the Unit. The A Sand in 10-03 is located ~14 meters up dip from the A Sand in 04-03-36-05W5 over a distance of less than a mile. This structural gain is evidenced along strike north from 10- 03 suggesting a long feature of potential undrained reserves. Several horizontal wells, reaching updip from the line of existing producers, have been identified.
