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Pembina Cardium waterflood expansion proposed

Kallisto Energy Corp., Calgary, is reviewing a proposal from the operator of its Pembina Cardium oil field in Alberta to install a waterflood on one of the three sections in which Kallisto has a working interest.

The proposal contemplates the drilling of five more horizontal oil wells in the section, two in 2012 and three in 2013, bringing the total number of wells in the section to seven. The new wells are expected to be produced through the 5% royalty period for horizontal oil wells, the earlier of two years or 60,000 bbl.

It is anticipated that three of the seven wells in the section will then be converted to water injection, one in 2012 and two in 2014-15. Kallisto’s share of project costs is expected to be $1.6 million in 2012, $2.3 million in 2013, and $0.3 million in 2014-15.

Development of Pembina lands the last few years has added great reserve value and cash flow, Kallisto said. The company’s 10 Pembina area wells produce a gross 444 b/d of oil equivalent, including 335 b/d of oil. Kallisto has a 30% interest.

Since the beginning of production operations, the 10 Pembina area wells have produced 398,000 boe, including 342,000 bbl of oil.

Pembina Cardium is western Canada’s largest conventional oil pool with more than 7.8 billion bbl of original oil in place.

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