Also throughout the first quarter of 2009, Action Energy accomplished three sand cleanout operations on wells at Lloydminster which emerges to be efficient in removing packed sand from horizontal wellbores. The early results of these operations appear to have been successful at restoring individual well production. The company considers there are up to twenty three potential well cleanout and pump change operations out of 26 horizontal heavy oil wells that have been drilled in the region. Each operation costs $25,000 to $50,000 depending on the situation of the wellbore. Action Energy intends to perform further cleanout operations on this 100% working interest property after spring break-up and when financial conditions improve for heavy oil operations.
Production:
Action Energy said that during the first quarter of 2009, it has produced an average of 1,236 boed (3.8 mmcf/d of natural gas, 487 bbl/d of heavy oil and 107 bbl/d of oil and natural gas liquids (NGLs). The company’s average production for the quarter reduced to 13% or 177 boed from 1,413 boed (3.5 mmcf/d of natural gas, 545 bbl/d of heavy oil and 278 bbl/d of oil and NGLs) for the fourth quarter of 2008. The fall in production is due to around 150 boed that was restrained during January and February 2009 due to freezing temperatures, no new production brought on stream during first quarter of 2009 because of limited capital spending in fourth quarter of 2008 and no capital spending in first quarter of 2009, normal and anticipated production declines on all properties and about 100 bbls/day of heavy oil production that was voluntarily shut in at Lindbergh/Lloydminster in consequence of low heavy oil prices experienced in first quarter of 2009 and poor operating economics on certain single-well operations.
Current production for Action Energy’s is around 1,050 to 1,100 boed (55% natural gas, 25% heavy oil and 20% light oil and NGLs). There is about 200 to 250 boed that was also voluntarily shut in or with the hope of some form of remedial operation to return to production. With improving heavy oil price discrepancy and dryer lease access, it is expected that these production quantity will be restored after spring breakup. Action Energy also has surplus of 100 boed of natural gas and NGL discovery that is likely to be tied in to production facilities by the fourth quarter of 2009.
