At Pengrowth, We are Working to Become a Leader in Thermal Oil, Adding Additional Long Life Reserves and Low Declines to our Portfolio
Our Lindbergh thermal property, the cornerstone of our strategy to becoming a sustainable energy producer, is currently in development. Lindbergh is located in East Central Alberta, away from the high-cost Fort McMurray area. Here, we are developing this niche opportunity which is expected to provide Pengrowth with a low decline, long life production profile requiring much lower sustaining capital than conventional or other unconventional opportunities.
What is SAGD?
A Low Decline, Low Maintenance Capital Project, Fueling More Stable Free Cash Flow
In February 2012, we began steam injection into our Lindbergh project, consisting of two well pairs. Pilot results have demonstrated very competitive instantaneous steam/oil ratios and well productivity. The two well pairs have outperformed expectations and have:
- Demonstrated faster than expected reservoir response to steam
- Demonstrated lower than expected steam/oil and diluent blending ratios
- Produced an average of approximately 1,561 bbl/d of bitumen from the two well pairs, with an ISOR of 2.8 in the first quarter of 2015.
- Together, produced in excess of 1.7 Million bbls of bitumen as of March 31, 2015, with a Cumulative Steam Oil Ratio (CSOR) of 2.2.
12,500 bbl/d Phase I Commercial Development
Excellent pilot results and reserve potential gave us the confidence needed to accelerate the first 12,500 bbl/day phase of commercial development, approved by our Board of Directors in January 2013. Development of Phase I commenced in late 2013 and since then, we have achieved significant milestones including:
- Completed construction of the central processing facilities and drilled an additional 20 well pairs
- Commissioned the facilities
- Achieved first steam in December of 2014 and generated first production in early 2015
Projected Production and Free Cash Flow
- Potential for ultimate production of up to 40,000-50,000 bbl/d
- Expected to generate free cash flow for many years
Established Market and Access to Refineries
- Large demand for heavy oil within North America
- Ability to refine heavy oil in North America, without having to ship overseas
- Will have the ability to ship across North America via railway or pipeline
- Lindbergh is located near Hardisty, which is known for unit train loading, and other transfer hubs allowing for easy shipping of product
- Located outside the high cost Fort McMurray oil sands fairway
Our Lindbergh project targets the Lloydminster formation whose greater depth, relative to the more heavily developed McMurray formation, creates higher pressure and better heat transfer. Other Lloydminster reservoir advantages include:
- Clean, continuous sands
- Expansive, sheet type accumulations, as opposed to channels
- Lower instantaneous steam-oil ratios result in lower operational costs
Lindbergh Development Team: The Capacity & Capability to Deliver
While thermal oil development is an unconventional operation, the Lindbergh project is helmed by a team that has successfully developed four previous thermal properties. With combined experience of ~65 years, this team has:
- The "know-how" to complete this project
- The talent to successfully develop and operate this project
Key Lindbergh Team Members
The key members of the Lindbergh team bring ~65 years of combined experience with Steam Assisted Gravity Drainage ("SAGD") and thermal development projects, including, but not limited to:
- Deer Creek Energy/Total E&P (Joslyn Pilot & Commercial)
- Connacher Oil and Gas Limited (Great Divide, Algar, Great Divide EIA)
- Syncrude Canada and SynencoEnergy
- Cenovus Energy (Christina Lake, Foster Creek, Borealis, Telephone Lake)
- Husky Energy (Tucker Lake, Caribou, Saleski, Sunrise Joint Venture)
Please follow the links below to view the applications related to the Lindbergh SAGD Expansion Project. Please note these are very large files and will take some time to download. The files must be unzipped in order for the links to work.