By OGJ editors
HOUSTON, Jan. 20 -- Signet Energy Inc., a subsidiary of Surge Global Energy Inc., San Diego, will complete this month a production test of the first horizontal well drilled in the Sawn Lake oil sands area of Alberta.
The well, which targeted the Bluesky formation, was drilled vertically to 680 m, plugged back, drilled 600 m laterally, and cased. It encountered more than 40 ft of oil pay and indicated a substantial gas concentration. Core analysis from the vertical well confirmed an average porosity of 32% and permeability of about 4 darcys.
By drilling and casing this first well, Signet Energy, under terms of a farmout agreement with Deep Well Oil & Gas Inc., Edmonton, Alta., has earned an interest in section 36-91-12 W5 and the right to select five additional sections of the Sawn Lake farmout area.
Deep Well Oil & Gas Inc. has an 80% working interest in the Sawn Lake heavy oil area. After Signet, field operator, drills 10 wells at no cost to Deep Well, Signet will fully earn its 40% interest in the project. Deep Well will then directly hold 40%.
The Sawn Lake oil sands project, consisting of 69½ contiguous sections covering 44,480 acres, contains 820 million bbl of oil reserves. It lies within a 60 mile radius of two producing oil sands projects: Shell Peace River and Black Rock Ventures.
Signet Energy Chief Executive Leigh Cassidy said Sawn Lake could produce up to 10,000 b/d of oil within 10 years with conventional methods. He said additional recovery methods such as hot-water flood have the potential to increase production to more than 50,000 b/d.
Signet Energy expects primary recovery of 10% or 32.8 million bbl of 10°-13° gravity oil.
Signet's parent company, Surge Global Energy Inc., and technology development company, Genoil Inc., Calgary, Alta., signed a letter of intent to jointly build a 10,000 b/d heavy-oil upgrader for the Sawn Lake heavy oil development (OGJ Online, June 22, 2005).
