SAGD & Heavy Oil
SAGD stands for Steam Assisted Gravity Drainage, which is an enhanced oil recovery technology for producing heavy crude oil and bitumen. The process involves the use of a pair of horizontal wells which are drilled a few metres above each other. The upper wellbore has low pressure steam injected into it to heat the oil and reduce its thickness, which in turn causes the heated oil to drain into the lower wellbore and pumped to the surface.
Heavy oil gets its name because its density is greater than light crude oil. While there is significantly more heavy oil in the world than conventional light crude oil, the increased viscosity and density makes production more challenging. The strategic advantage with heavy oil is that the exploration risk is minimal. While heavy oil prices may be lower than light oil prices, returns on heavy oil production can be similar due to lower finding and development costs when compared to conventional oil reserves.
Lindbergh
Pengrowth's entry into SAGD operations resulted from the 2004 aquisition of our Lindbergh property. Lindbergh is located in the southern portion of the Cold Lake area.
- 100 percent Pengrowth owned pilot project located in Cold Lake, Alberta
- Acquired as part of 2004 acquisition of Murphy Oil
- Pengrowth estimates ultimate recoverable resources of 194 million barrels (“bbl”) based upon Pengrowth’s 100 percent working interest in 0.5 billion bbls of original-oil-in-place
- Current recovery modeling estimates that Lindbergh's reserves alone could be equivalent to approximately 40 percent of Pengrowth's current proved plus probable reserves.
- New leader and team assigned to Lindbergh Project.
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Bodo
The Bodo heavy oil properties straddle the Alberta-Saskatchewan border and produces 12 degree API oil mainly from the McLaren and Lloydminster formations. These mature assets have significant amounts of original-oil-in-place with relatively low (5%) recovery factors attributed to them. These fields are shallow heavy oil plays that are ideal candidates for incremental recovery using a polymer EOR method. Pengrowth has been running a polymer pilot in the area since 2006 and, based on the results of the pilot, the application of the polymer EOR could improve the ultimate recovery of oil from these pools from approximately five percent to 25 percent.
For the remainder of 2011, Pengrowth anticipates spending $30 million at Bodo which will include the drilling of approximately 35 wells which are expected to add incremental production by the fourth quarter of 2011.
