Our Lindbergh thermal property, the cornerstone of our strategy to becoming a sustainable energy producer, is 100-percent operated by Pengrowth and is located in the Cold Lake area of East Central Alberta in the Lloydminster fairway. Lindbergh is expected to provide Pengrowth with a low-decline, long-life production profile requiring much lower sustaining capital than conventional or other unconventional opportunities. The project offers Pengrowth the potential to ultimately develop annual production of 40,000 to 50,000 bbl per day.
Our Lindbergh project exploits the Lloydminster formation whose greater depth, relative to the more heavily developed McMurray formation, creates higher pressure and better heat transfer. The Lindbergh reservoir is characterized as a clean continuous nearshore marine sand with no significant shales and is believed to possess a laterally extensive high-quality cap rock. The average depth of the reservoir is approximately 540 metres resulting in good heat transfer and steam containment. The enhanced bitumen quality and flow characteristics result in an efficient steam oil ratio which translates into a lower operating cost structure, higher netbacks compared to many other thermal projects, and lower carbon intensity. The project recycles on-site in excess of 95 percent of water used in operations.
In February 2012, we began steam injection into our Lindbergh pilot project, consisting of two well pairs. The pilot results demonstrated very competitive instantaneous steam/oil ratios and well productivity. The two original well pairs outperformed expectations and demonstrated:
- Faster than expected reservoir response to steam
- Lower than expected steam/oil and diluent blending ratios
The two original pilot well pairs continue to demonstrate robust performance.
Excellent pilot results and reserve potential gave us the confidence needed to accelerate the first 12,500 bbl per 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
- Project continues to exceed the 12,500 bbl per day phase I target
- In 2018 Pengrowth executed an optimization program at Lindbergh which aimed to deliver production of approximately 18,000 bbl per day by the end of 2018.
- Lindbergh exceeded its targets again, exiting 2018 at more than 19,000 bbl per day
Our team has developed a common-sense strategy that gives us the flexibility to expand thermal oil production at Lindbergh to 35,000 BBL/d in smaller, bite-sized pieces rather than pursuing expansion in one large phase. Our strategy allows us to rapidly change gears depending on the price of oil, while still enabling us to pursue incremental production growth. This approach will prevent us from incurring large capital deficits and allow us to produce free cash flow to pay down debt in a US $65 per bbl WTI scenario.
In addition to drilling new well pads and infill wells, we will also deploy low-cost proven technologies, including the co-injection of Non-Condensable Gas (NCG) and solvents, to further enhance production, lower steam-oil ratios (SOR), and reduce our carbon intensity. Pengrowth received regulatory approval for the application of NCG injection at Lindbergh in early June 2018.
Securing a partner to build a cogeneration facility at Lindbergh is a cornerstone of our strategy to incrementally grow production to 35,000 bbl/d by the end of 2023 at Lindbergh. After several months of negotiations, Pengrowth reached an agreement with a third-party in January 2019 regarding the engineering, design, construction, commissioning, asset management, energy management, and ownership of a new cogeneration facility at Lindbergh. This new facility is expected to be funded and owned by our partner and operated and maintained by Pengrowth to efficiently provide the electricity and steam under a fee structure required to expand production at our Lindbergh SAGD facility. This LOI is non-binding and there are a number of conditions contained in the LOI making the construction of the proposed cogeneration facility subject to the execution of definitive agreements between the parties.
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.