Cougar O&G provided an operations update for the Trout production area.
Cougar finished drilling the horizontal Keg River oil well on March 20th. The horizontal leg was successfully drilled in the top two (2) meters of a ten (10) meter thick Keg River zone and has approximately 400 meters of horizontal productive formation.
The service rig moved on as soon as the drilling rig was off the lease. The completion operations for Cougar's horizontal well consisted of landing the tubing string and swabbing in multiple spots along the toe to the heel of the horizontal wellbore to confirm and induce formation inflow. The final production equipment including the bottom hole pump and rods was run and the well has been put on production. It is anticipated it will take several weeks to recover all of the lost drilling fluids and begin producing the Keg River reservoir fluids.
This horizontal well will also benefit from two Alberta royalty incentive programs. The production will receive a 12 month royalty holiday of 5% under the New Well Royalty Rate and Cougar is also eligible to receive the $200 per meter Alberta Drilling Royalty Credit.
Cougar has completed the initial review of the processed 3D seismic data that was acquired in January. The seismic data confirms the 10 to 12 well vertical and horizontal development potential of the existing Keg River and Granite Wash oil pools but the 3D seismic also identified several new undeveloped oil reservoirs. The new oil reservoirs found using the 3D seismic will initially be developed with vertical drilling and coring to confirm net pay and volumetrics but may ultimately be developed with horizontal oil wells. The Corporation is finalizing the locations for the next drilling program and expects to begin the permitting process by the end of April once the next phase of the seismic review has been completed.
Mr. William Tighe, CEO and Chairman of the Board for Cougar stated, "We are very excited to be able to provide this operations update to our shareholders. The reservoir that was encountered during the drilling of the Keg River horizontal well confirmed the advantages of this type of production prospect. Instead of having to coordinate and execute a very expensive multi-stage fracture stimulation we were able to get the well tested and on production in less than 5 days.
"The new 3D seismic has provided a tremendous opportunity to develop existing reserves and it also identified some exciting structural prospects with the potential to add new reserves and cash flow for the company."
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