More well pairs set as Senlac oil output climbs

By OGJ editors
HOUSTON, July 19
-- Southern Pacific Resources Corp., Calgary, is preparing to drill the next three well pairs at its STP-Senlac thermal project in Saskatchewan as heavy oil production improves.

Two steam-assisted gravity drainage well pairs brought on production in April have performed as expected at Senlac, 70 miles south-southeast of Lloydminster. The pairs drove SPRC to record production of 4,915 boe/d in the quarter ended June 30 compared with 3,663 boe/d in the previous quarter.

The next three well pairs will be set up and placed on standby, ready to be activated once plant capacity becomes available. SPRC’s development plan is to maintain STP-Senlac output at 4,000-5,000 b/d for 10-14 years.

Meanwhile, SPRC said construction remains within budget for Phase 1 of its STP-McKay thermal project west of Fort McMurray, Alta.

As of June 30, SPRC had committed $355 million of the budgeted $450 million in capital required to construct Phase 1 of the SAGD project designed to process 12,000 b/d of bitumen. Costs incurred to June 30 totaled $212 million.

The company continues to expect to be steaming the first SAGD well pairs in the calendar 2012 second quarter, which implies oil production start-up in mid-2012. A 6 to 12-month ramp-up will be needed to bring the plant to capacity.

Field construction is well under way. Crews have completed a 29-km all-season access road and four permanent bridges, finished the central plant site and well pad civil work, completed a 14-km natural gas pipeline from the TransCanada pipeline system to the plant, completed water source wells and pipelines, drilled the first pad of six SAGD well pairs, and are 50% complete on the second pad.

Results from drilling the horizontal wells have been positive from reservoir quality and drilling efficiency perspectives, the company said.

SPRC has procured all major equipment, and modules are in various stages of fabrication in shops mainly in Alberta. Site construction is focused on pile driving, 30% complete, and building nine site-fabricated 10,000-bbl storage tanks for fluids such as boiler feedwater, produced water, diluent, and the diluted bitumen sales product. Bases are being built for 12 shop-fabricated tanks.

SPRC has also elected to increase dil-bit storage capacity by adding one 40,000-bbl tank as a buffer to ensure production operations are maintained in event of a downstream upset. The $6.5 million capital cost is expected to be offset with savings from initial project stages.

Planning and application preparation for STP-McKay Phase 2 continues to advance, with an application for a 24,000 b/d expansion expected to be filed this fall.

Elsewhere, SPRC began steaming wellbores in June at its STP-Red Earth project in the Peace River oil sands. This pilot project will be tested in the rest of summer and fall, after which the test information will be interpreted and onward plans prepared.

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