Connacher Oil and Gas has commenced its first quarter 2010 drilling program. The primary focus of the drilling program is on expanding bitumen resources and reserves through the drilling of core holes on the company's Great Divide and Halfway Creek oil sands leases in northern Alberta. It will also include a conventional oil and gas exploration and exploitation program in northern Alberta and southwest Saskatchewan.
Moreover, two horizontal well pairs will be added at Great Divide Pod One (Pod One), the company’s first 10,000 bbl/d steam assisted gravity drainage (SAGD) oil sands project.
The company’s Q1 2010 core hole program anticipates 60 wells at Great Divide; however, subject to budget and other considerations, including per well costs, weather and actual results obtained, it could accommodate up to 70 core holes. Five drilling rigs are contracted to be utilized for the core hole program, three rigs having already commenced operations and two more scheduled to follow later this week.
A sixth rig is also being utilized as a surface hole pre-set rig. The program is expected to finish in early March 2010. Additionally, there will be stepout core holes drilled to delineate and extend the existing pods already identified within the main Great Divide lease block.
The Halfway Creek core hole program will also commence and is designed to explore the oil sands potential of this block. Ten core holes (50% Connacher or 5 net core holes) will be drilled on this block.
In addition, two 3D seismic programs will be run at Great Divide and at Thornbury, located southwest of Great Divide, to identify potential oil sands accumulations that could be the target of future core hole programs. The budget for the core hole and seismic programs is $28.3m and was included in the company’s previously announced 2010 capital program.
The company’s Q1 2010 conventional drilling program will consist of nine wells to be drilled primarily for natural gas in northern Alberta, including offset locations to a new pool discovery made in 2007. Also, one development oil well will be drilled on the company’s lands at Battrum in southwest Saskatchewan. The budget for the 2010 conventional drilling program is $6.4m and was also included in the company’s previously announced 2010 capital program.
The drilling of the two additional horizontal SAGD well pairs at Pod One commenced in December 2009 and is anticipated to be completed in January 2010. The drilling rig used for this program was one of the two rigs which recently drilled 17 horizontal SAGD well pairs at Connacher’s second 10,000 bbl/d oil sands project (Algar) at Great Divide.
The two new well pairs are expected to increase the total number of horizontal well pairs at Pod One to 19. It is anticipated these two new well pairs will be completed and tied-in to Pads 101 and 102 at Pod One, but will not receive steam injection until 2011 or until surplus steam is available at Pod One, once the full impact of the installation of electrical submersible pumps and other operations procedures is evident.
The budget for the two new well pairs is $10.2m and was included in the company’s previously announced 2010 capital budget.