"By applying new technology to the project, we expect to revitalize this historic Canadian field," said Dr. Jim Buckee, President and Chief Executive Officer. "The Turner Valley oil field contained an estimated one billion barrels of original oil in place, of which only 15% has been recovered to date. An incremental 3-10% from the nitrogen flood has the potential to increase oil recovery by 30-100 mmbbls and extend the remaining life of the field beyond 20 years."
Talisman has an average working interest of approximately 60% in the four oil Units that comprise the pool. Talisman's current production from these Units is over 1,650 boe/d. The capital investment for the pilot project in 2002 will be approximately $8.5 million in Turner Valley Unit No. 4. Participants in this Unit are Talisman (76.5%), Computershare Trust Company of Canada (16.1%), Enerplus Resources Corporation (5.0%), Canadian Spooner Resources Inc. (1.5%) and National Petroleum Corporation Limited (0.9%).
Oil production began in Turner Valley over 65 years ago and the field has been under waterflood for over 40 years. Talisman's project design uses a membrane technology to extract nitrogen from air, which may offer a cost effective alternative to the cryogenic technology used elsewhere. Capital cost efficiencies may be achieved through the use of suspended wellbores as injectors and integration of nitrogen facilities with existing equipment.
The pilot project is eligible for a 5% flat Experimental Project Petroleum Royalty on the Crown's share of oil production, representing approximately 80% of the total royalty volume.
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