As a footnote to the issues covered above I did ask management a few questions regarding the use of steam etc. and I have been given permission to post the questions and responses from John Begg below fyi:
1. When is it planned to commence the use of steam at NSA? What would be the trigger to commence application of steam?
Although we may experiment with the effects of steam on selected wells we do not plan steam flood operations until 2010
2. What impact would you expect in terms of increased production from the introduction of steam to the well(s)? Would the effect be lasting as long as steam continues to be used?
We would expect once the steam chamber is effective to push oil production back up to peak levels and for the decline from these levels over a number of years to be much slower than during the primary production phase
3. T o what extent is steam used in heavy oil fields in the region?
Very common. The giant field next door has a very large steam operation that has been running for many years.
4. What would be the additional production cost of using steam? What energy source is used to produce the steam?
The energy source is gas and it is common for the cost of burning gas to generate steam to be up to 70% of total operating costs. Costs during steaming could be up to US$20 /barrel but at forecast oil prices our margins will still be high. This is a very important point.
5. Is the steam injection facility already in place and ready at the central pad? Is it capable of, and is it intended, to use the steam facility at say McCool Ranch in due course?
We have steam facilities almost ready capable of cyclic steam (of individual wells) but not yet enough to carry out a steam flood ( of the whole oil reservoir)
At Mccool we are currently not planning to develop that field with steam. Rather we expect to produce the wells at high water cuts as cheaply as we can.
SAE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
