Petrobank Takes 50% Stake in Heavy Oil Assets in the Peace River Area
Petrobank Energy and Resources has entered into a THAI™ license agreement to acquire a 50% interest in certain heavy oil lands and related assets in the Peace River region of northwest Alberta (the "Dawson Property") owned by Duvernay Oil Corp.
The Dawson Property:
The Dawson Property is comprised of 2,880 acres of land in the Peace River area of Alberta, and includes two existing horizontal wells and related facilities. Petrobank's internal evaluation of the Dawson Property yields an estimated original-oil-in-place resource of approximately 100 million barrels, utilizing existing 3D seismic and available well data. Of significant note, the main producing zone in the Dawson area is the Bluesky formation, which contains conventional heavy oil capable of being produced using cold production techniques. There are already numerous cold producing operations in the area, and many operators have indicated plans to implement conventional thermal recovery projects. For Petrobank, this property represents an excellent opportunity to implement the THAI™ process in a conventional heavy oil reservoir, which was the initial target reservoir application for THAI™ when it was first developed at the University of Bath in England.
Chris Bloomer, Vice President Heavy Oil, commented, "With the success of our THAI™ operations at WHITESANDS, we are eager to commence a roll-out of this technology into other reservoir applications, both here in Canada and internationally. Initial development plans at Dawson will involve an update of the existing reserve evaluation and a two-well THAI™ project, which can then be expanded to accommodate additional wells on the property. Petrobank will be the operator and we intend to commence engineering and regulatory work to undertake this THAI™ project in 2008."
In addition, Petrobank and Duvernay have established an area of mutual interest in lands surrounding the Dawson Property. Within the AMI, the Companies have the opportunity to further expand production and reserves through the application of the THAI™ technology on third-party lands and/or jointly acquired properties in the region.
THAI™ License Agreement:
Petrobank's wholly-owned subsidiary, Archon Technologies Inc., has entered into a license and royalty agreement with Duvernay to allow Petrobank's patented THAI™ process to be utilized on the Dawson Property and within the AMI. Archon will earn a 10% gross overriding royalty on Duvernay's share of production following recovery of a specified amount of production.
The acquisition of the Dawson Property and the licensing agreement with Duvernay is an important first step in Petrobank's development plans for the commercialization of the THAI™ technology on a global basis. The Dawson Property and AMI cover an extensive heavy oil belt with a number of large existing conventional cold heavy oil production operations that typically recover only 6% to 10% of the original-oil-in-place. The application of the THAI™ process in these reservoirs has the potential to increase recoveries up to 70% to 80%.
Saskatchewan Land Position Established:
In addition, Petrobank has acquired a 23,040-acre Oil Sands License in Saskatchewan. The license has a primary term of five years and forms the basis for a possible future expansion of the application of the THAI™ technology into an exciting new potential oils sands resource fairway.
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Company: Petrobank Energy and Resources Ltd. more info
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