Copyright of the Daily Oil Bulletin 2018
Bigoray Nisku EOR Project Economics Looking More Attractive, Says Pulse
Pulse Oil Corp. says it will continue to complete project planning associated with its Nisku enhanced oil recovery (EOR) project in the Bigoray area of Alberta after receiving an independent resource assessment by Sproule Associates Limited.
Pulse’s goal is to “to make this project happen” in 2018 and with the oil price market appreciating heading into 2018, the project economics continue to look more and more attractive alongside improving oil prices, Drew Cadenhead, chief operating officer of Pulse, said in a news release.
The resource assessment includes the Bigoray EOR project potential only, and is in addition to the previously disclosed baseline independently assessed reserves in its core areas at Bigoray and Queenstown, said Pulse.
Sproule assessed a best estimate Discovered Petroleum Initially In-place of 23.29 million bbls of oil within Pulse’s 100 per cent controlled Nisku D and Nisku E pools, which Pulse said it views as being conservative. The resource assessment was prepared in accordance with National Instrument 51-101 and the Canadian Oil and Gas Evaluation Handbook.
In addition, the resource assessment provides estimates categorized as “high”, “best” and “low” for contingent resources associated with the Bigoray EOR project on the two pools, with an unrisked high estimate of 8.07 million boe (92.6 per cent oil), a best estimate of 6.14 million boe (91.3 per cent oil) and a low estimate of 3.67 million boe (89.1 per cent oil).
“The Sproule resource assessment is a positive independent commercial confirmation for our Bigoray Nisku enhanced oil recovery project,” Drew Cadenhead, chief operating officer of Pulse, said in a news release.
“Although this assessment used a more conservative approach to Petroleum Initially in-Place (“PIIP”) compared with the PIIP estimates of the Alberta Energy Regulator, we are excited to see that even this more conservative approach resulted in a strong endorsement for the project,” he said.
“With an independent un-risked high case upside estimated at over eight million boes of contingent resources (92 per cent oil), the opportunity to move forward with our EOR project to bring on stream substantial cashflow while targeting to recover those types of oil volumes without drilling a well, creates a substantial opportunity to enhance value for Pulse and our shareholders.”
The resource assessment focused exclusively on two Nisku pools only in the Bigoray area, and included 2,720 acres of Pulse’s 44,720 acre core area holdings which includes 14,000 acres at Bigoray alone.
Future evaluations may be done on Pulse’s Mannville, Cardium and Pekisko formations that are thought to also provide significant growth opportunities for the company as well as additional Nisku assets/pools held within Pulse’s existing holdings.
As part of the resource assessment, Sproule assessed a total risk of 77 per cent that the project would proceed, citing economic factors and/or timing of development as one of the only risks associated with the project, said Cadenhead. “All technical risks such as evaluation drilling, regulatory approvals, technology, legal factors, infrastructure and markets, political factors and social licence were all assigned 100 per cent chance of commerciality.”
The Resource Assessment is based on the results from 17 wells and, where available, core data. Where core was not available, the assessment considered log data.
Contingent Resource volumes for these discovered resources have been classified as “development unclarified,” with Sproule assessing that there is a high probability of the Bigoray EOR project becoming a commercial development.
Significant positive factors relevant to the estimate of Pulse’s contingent resources from the Bigoray EOR project include success of miscible flood development in nearby analogous Nisku reservoirs, a discovered thick oil column providing volumes for the deployment of enhanced oil recovery through a miscible flood and a nearby infrastructure allowing for access to market.
Significant negative factors relevant to the estimate of Pulse’s contingent resources from the Bigoray EOR project include uncertainty to how the previously fully waterflooded pools will respond to a miscible flood, economic viability uncertainty, as project capital and operating costs are unclear and areal uncertainties in the estimation of PIIP.