Paramount's Cavalier applies for Hoole SAGD project

Cavalier Energy Inc., a subsidiary of Paramount Resources Ltd., Calgary, has filed a regulatory application for the Hoole Grand Rapids project with the Alberta Energy Resources Conservation Board and Alberta Environment and Sustainable Resource Development.

The Hoole project involves a 10,000 b/d in situ steam-assisted gravity drainage oil sands development in and around 9-23-81-24w4 southwest of Fort McMurray, Alta.

Subject to receiving regulatory approval, the current Hoole project schedule anticipates first steam in the second half of 2015 and the first full year of production in 2016.

If regulatory approval were received in the first quarter of 2014, site work, module fabrication, and drilling initial well pairs could begin later that year, Cavalier indicated.

Cavalier said the capital cost of $45,000/b/d assumes a steam-oil ratio of 3:5 in the Grand Rapids formation and that stronger reservoir performance is expected to reduce that number.

Cavalier sees the Hoole project as a “great platform from which to grow Cavalier into a significant oil sands production company.”

Cavalier expects to receive a reserves report for the project from its independent engineering evaluators in the first quarter of 2013.

A second phase could involve first steam at the end of 2012 boosting production to 35,000 b/d, and a third phase could begin steaming at the end of 2021 to maintain the 35,000 b/d rate. Phase 2 and 3 capital costs are $1.4 billion and $1.3 billion respectively, including facilities, drilling, and completion.

Paramount said Hoole will be its first operated, strategic investment in the oil sands.

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