"This is an important milestone for Signet Energy that not only demonstrates our ability to execute our farm-in commitments, but also marks the serious development of a project which the company believes may produce up to 10,000 barrels of oil per day within 10 years," said Leigh Cassidy, Chief Executive Officer of Signet Energy. "With initial projected operating cost estimated at under $7 a barrel, we are confident in the company's future prospects."
Signet Energy has a 40% working interest in the Sawn Lake Project, or 328 million barrels of oil in place, as evaluated by two respected third-party petroleum engineering firms. The company expects that primary recovery, using conventional cold pumping methods, may yield at least 10% or 32.8 million barrels of heavy oil ranging from 10 - 13 degrees API.
With the drilling and casing of this first well, pursuant to the Farmout Agreement Signet has earned an interest in section 36-91-12 W5 and the right to pick five additional sections of the Sawn Lake Farm-out area.
Background Information about the Sawn Lake Oil Sands Project:
The Sawn Lake Oil Sands farm-out area has been estimated by two respected third-party petroleum engineering firms to contain a total of 820 million to 1.2 billion barrels of oil in place. The Farm-out consists of 69.5 contiguous sections covering 44,480 acres in the Sawn Lake area of Alberta, Canada.
We believe the production exit rate for the Sawn Lake Oil Sands project may be 2,000 barrels per day, with a target of 10,000 barrels per day within 10 years with conventional means, of which Signet Energy has a 40% working interest. We believe that additional recovery methods, such as hot water flood, have the potential to increase production to exceed 50,000 barrels per day. Based on these initial results we believe that the Sawn Lake Project has a reserve life index of 15 to 25 years. Other oil sands projects producing in the area include Shell Peace River (SHC.TO) and Black Rock Ventures which are within a 60 mile radius of Sawn Lake.
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