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Trust looks toward Alberta CO2 operations

By OGJ editors
HOUSTON, Dec. 30 -- ARC Energy Trust, Calgary, closed the $462 million (Can.) acquisition of stock in two ExxonMobil Corp. affiliates that operate and hold interests in two central Alberta fields it believes have large remaining light oil recovery potential.

The subsidiaries of Imperial Oil Resources and ExxonMobil Canada Energy own a 45.57% working interest in North Pembina Cardium Unit No. 1, and another subsidiary of Imperial Oil Resources owns a large interest in the Redwater oil field.

ARC Energy Trust said the fields have a large but undisclosed potential beyond the estimated 40 million bbl of existing proved and probable reserves. That estimate doesn't include a large expected enhanced oil recovery potential. The fields combined have produced more than 1 billion bbl of oil and have a 20-year reserve life.

The fields average 5,460 b/d of oil equivalent, 95% liquids, and have high operating costs, and Redwater has a material abandonment liability, ARC Energy Trust said.

The transactions ARC to receive lower tax pool coverage than would have been received had this been an asset purchase.

The Pembina Cardium field, 120 km southwest of Edmonton, covers 800 sq miles and is Canada's largest conventional oil field. Original oil in place is estimated at 7.4 billion bbl of 39° gravity oil. The 1953 discovery well still produces. Remaining oil in place is 860 million bbl.

Redwater Leduc oil pool, discovered in 1948, had 1.3 billion bbl of OOIP. Drilled up on 40-acre spacing, it has 860 million bbl left in place for primary recovery. Production averages 580,000 b/d of fluid net to the trust's interest, 3,480 b/d of which is oil. The field is 40 km northeast of Edmonton.

Including Pembina and Redwater, ARC Energy Trust believes its assets have more than 750 million bbl of light and medium oil in place that is not expected to be recovered under existing projects. It has large holdings at Pembina, Alta., and in southeastern Saskatchewan amenable to EOR techniques such as carbon dioxide miscible recovery. It holds interests in Saskatchewan's Weyburn and Midale fields, Canada's two largest CO2 miscible floods.

No CO2 infrastructure exists in Alberta, but the company is developing a dedicated CO2 EOR team.


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