Connacher Oil and Gas Limited announced that its bitumen production rate surpassed 7,000 barrels per day at its Great Divide Pod One steam-assisted gravity drainage (SAGD) project in Alberta's oil sands region. When added together with Connacher's conventional crude oil and natural gas production of 3,600 boe/d, Connacher's total daily production is now approximately 10,600 boe/d. The company is extremely pleased with the production ramp-up achieved at Great Divide Pod One and with the performance of its conventional oil and gas properties.
Readers are cautioned that a barrel of oil equivalent (boe) is derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of crude oil and that this may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
At Great Divide, Connacher's SAGD project continues to exceed expectations as production builds towards achievement of anticipated production at the project design level of 10,000 bbl/d of bitumen later in 2008. Currently, 14 well pairs out of the 15 well pairs drilled have been converted to SAGD production. As has been stated in earlier releases, monitoring and performance data continues to exceed targets. Connacher's operating, engineering and marketing staff continue to optimize the increased bitumen volumes, which are being blended with diluent and then being trucked to preferred markets The key learnings in these areas will be incorporated into the design, startup and ramp up of the Pod Two ("ALGAR") project, the application for which is currently working its way through the regulatory process. It is anticipated that this project will be approved by the summer 2008, with construction anticipated to start shortly thereafter.
The company continues to evaluate and interpret the results of the first quarter 2008 core hole drilling program, its 3D seismic program as well as Connacher's conventional drilling program and is very encouraged by its interpretation. Results will be released at the end of second quarter 2008, once the results have also been evaluated by the company's independent qualified reserves evaluators.
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