Baytex Energy Trust Announces Results of Successful Thermal Pilot at Seal
Baytex Energy Trust announce results from our thermal pilot at Seal in the Peace River Oil Sands of northern Alberta. Highlights from the pilot project include:
– Successful execution of all operational phases of the cyclic steam pilot in a representative part of the Bluesky reservoir at Seal; – Initial post-steam production rate in excess of 900 barrels of oil per day, with an average post-steam production rate of approximately 300 barrels of oil per day to date; – Incremental steam-oil ratio (“incremental SOR”) of 2.3 to date; and
– Indication that a commercial-scale thermal project at Seal will offer economic rates of return.
Baytex began the pilot project with injection of steam into a single well in April, and now has nearly three months of production history from the pilot well. Baytex had a number of operational, reservoir performance and economic forecasting objectives for the pilot project. We believe that substantially all of these objectives have been met.
Operational objectives included demonstration of the feasibility of injecting steam into the Bluesky Oil Sand and successfully pumping the well after steaming. Additionally, Baytex sought to obtain all necessary pilot results at minimum cost. Cost for the pilot project, including fuel gas for steam generation, totaled $3.4 million.
With respect to reservoir performance objectives, Baytex sought to test horizontal well cyclic steam injection (“CSS”) in a part of Seal that has representative reservoir quality and a history of primary production. One of the critical aspects of reservoir performance was to achieve adequate steam injectivity into the Bluesky Oil Sand. Injection of approximately 35,500 barrels of steam (cold water equivalent) over a thirty-five day period met our expectations which were derived from numerical reservoir simulation.
The most critical aspect of reservoir performance to be determined from the pilot project was post-steam production as compared to cold primary production. The final cold primary production rate from the pilot well before injecting steam was 72 barrels of oil per day. Initial post-steam production rates from the pilot well were in excess of 900 barrels of oil per day. For the 79-day period during which the pilot well has been on production after steam injection, average production rate has been approximately 300 barrels of oil per day. Current rate is approximately 200 barrels of oil per day.
A common measure of thermal efficiency for CSS is the ratio of injected steam to incremental oil production, over and above the cold primary production trend. This ratio, known as incremental SOR, currently stands at 2.3 for the pilot, after deducting projected cold primary production that would have occurred had the pilot well not been steamed. The current incremental SOR of 2.3 is lower than our expectation based on numerical reservoir simulation, reflecting better-than-modeled thermal efficiency. Because the current post-steam production rate still significantly exceeds the cold primary rate, we expect that the incremental SOR from the pilot will ultimately be significantly lower than the current ratio.
Baytex holds approximately 67,000 net acres of long-term oil sands leases at Seal and believes that this land position has significant potential for both primary and thermal development. With respect to economic forecasting of a commercial-scale CSS project, Baytex believes that the pilot has provided adequate data to validate and guide our numerical reservoir simulation efforts for predicting CSS performance. Based on our preliminary estimates of capital and operating costs for a commercial-scale thermal project at Seal, we believe that such a project will offer economic rates of return at current oil prices. Baytex is in the process of putting the organizational resources in place to permit, design and execute a commercial-scale project, and will periodically provide updates on our progress in this regard. Baytex does not expect production from a commercial-scale thermal project at Seal for approximately three years.
Baytex Energy Trust is a conventional oil and gas income trust focused on maintaining our production and asset base through internal property development and delivering consistent returns to our unitholders. Trust units of Baytex are traded on the Toronto Stock Exchange under the symbol BTE.UN and on the New York Stock Exchange under the symbol BTE.
Contacts: Baytex Energy Trust Ray Chan Chief Executive Officer
(403) 267-0715
Baytex Energy Trust Anthony Marino President and Chief Operating Officer
(403) 267-0708
Baytex Energy Trust Derek Aylesworth Chief Financial Officer
(403) 538-3639
Baytex Energy Trust Erin Cripps Investor Relations Representative (403) 538-3681 Toll Free Number: 1-800-524-5521
Website: http://www.baytex.ab.ca
