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LEDUC-WOODBEND OVERVIEW
OVERVIEW
The Leduc-Woodbend property is located approximately 30 km southwest of Edmonton, Alberta and consists of a contiguous block of Company operated Unit and non-Unit lands that span six townships. The property is best known for the Leduc (D-3) reef reservoir which was discovered in 1948 and still contributes a large portion of the property's light oil production. Overlying the Leduc, a multitude of oil and gas pools occur throughout the stratigraphic column; current production is largely from the Leduc Formation and the Lower Mannville Ellerslie (Blairmore) Formation. The majority of the Company’s Leduc and Nisku rights are unitized within the Leduc-Woodbend D-3 Unit (85.81564610% WI), the Leduc Woodbend D-2 Unit (81.234575% WI), the Leduc D-3A SE Extension Unit (100% WI) and the Leduc D-3A S.E. Extension Gas Cap Unit (100% WI). The Company’s non-unit lands generally range from 85% to 100% working interest.
PRODUCTION
Production (sales) at the Leduc-Woodbend property in January 2011 was 635 bbls/d of oil, 4,839 Mcf/d of gas and 117 bbl/d of NGL’s. There are approximately 55 producing wells on the property.
RESERVES
Total Proved and Probable reserves totalling 6,223.6 Mbbls of oil, 19,550 MMcf of gas, and 735.7 Mbbls of NGLs were assigned to the Company’s interest at Leduc-Woodbend. Of that amount the existing producing wells were assigned Proved and Probable Producing reserves totaling 1,587.9 Mbbls of oil, 3,678 MMcf of solution gas, 5,097 MMcf of non-associated gas and 269.3 Mbbls of NGLs.
A deep inventory of development projects resulted in Proved and Probable Undeveloped and Proved and Probable Non-Producing reserve assignments of 4,635.7 Mbbls of oil, 10,774 MMcf of solution gas and 466.5 Mbbls of NGLs.
FACILITIES
Produced fluid and gas is collected through a system of gathering lines and satellite batteries to one of two Unit owned central batteries located at 11-20-050-26W4 and 09-16-050-26W4. At the central batteries free water is removed and disposed via 4 salt water disposal wells. Solution gas is separated and sent for processing. Oil is sent to the Company non-Unit 10-22-050-26W4 facility for final treating and transfer to the Pembina Pipeline.
The 10-22-050-26W4 battery is owned 100% by the Company and includes oil treating and blending facilities and a sweet gas refrigeration plant. Gas which requires sweetening is sent to the non-Unit, Calmar 07-23-049-27W4 sweetening plant (Company 100% WI). The sweetened gas is returned to 10-22 for liquids removal and transfer into the ATCO system (Rabbit Hill #2423 meter station) for sales. Alternatively gas can be diverted to the Nova system (NIT). Acid gas is injected into the 07-23-049-27W4/2 disposal well. Unit owners pay fees for use of the Company facilities.
The Company is currently working on a plant consolidation project with ATCO Midstream which would involve sending gas to the ATCO Golden Spike plant and phasing out the 07-23 plant over the next 5 to 10 years. ATCO would increase utilization and efficiency at Golden Spike and the Company would receive increased liquids yields and reduced operating expenses. With additional recoveries and lowered operating costs this project would add approximately $11MM in present value discounted at 10%. This includes a $1.7MM decommissioning cost for the 07-23 plant. ATCO is also considering bringing gas from their Watelet plant to the Golden Spike Deep Cut Gas Plant and would potentially need to use the Company’s pipelines and compression.
The 10-22-050-26W4 plant would remain as an oil blending facility which currently generates between $50M and $100M per month in blending revenue. The blending process is managed by a third party.
MARKETING
All oil produced from the Leduc field is purchased by Vitol on a short term contract, via the Pembina Pipeline. BP Amoco purchases the gas via ATCO transmission. Natural gas liquids are trucked to either the KFG NGL offload or Keyera Rimbey gas plant for sales to BP Canada Resources Company.
SEISMIC
All the Company's lands in Leduc-Woodbend are covered by two large, merged 3-D seismic surveys. The surveys have been reprocessed and reinterpreted and are key to the Company's developmen tprograms.
DEVELOPMENT POTENTIAL/GEOLOGY
At least eleven formations have been productive in the Leduc-Woodbend Field, occurring at depths from approximately 300 m to 1,650 m. The Leduc reef is the dominant geological feature in the field, and had a pronounced effect on the overlying stratigraphic column, influencing both depositional processes and post depositional trapping. The pre-Cretaceous unconformity on the Wabamun surface is also an important feature, directly impacting Lower Cretaceous sedimentation and post depositional trapping. Historical reservoir management of the property was focussed on the Leduc (D-3) Formation and to a lesser extent the Nisku (D-2) Formation. The Company has an extensive inventory of capital projects that currently focus on robust opportunities in the Leduc, Nisku and Ellerslie Formations but also several other horizons, including the Wabamun, Glauconitic, Sparky, Cardium, Viking, Belly River, and Horseshoe Canyon. Opportunities range from infill drilling to initiation of water flood-schemes.