The project has existing Energy Resources Conservation Board approval for a Phase 1 project of 10,000bpd and has made an application for a Phase 2 project that will increase production to 30,000bpd.
The project has 259mmboe of proved plus probable reserves as at December 31, 2009 as determined independently by GLJ Petroleum Consultants in accordance with National Instrument 51-101. An incremental 30 million barrels of best estimate contingent resource also determined independently by GLJ.
Project costs for the first phase during 2010-2012 are estimated at $450m – $500m, which includes drilling cost of 15 SAGD well pairs for start up. The steam generation and fluid processing facility has been committed to at a fixed cost of $312m.
Harvest’s upstream capital budget for 2010 will increase to $415m to allow for the 2010 development costs of the project. KNOC has agreed to inject additional capital into Harvest in order to fund the 2010 BlackGold project costs.
The project is located in northeastern Alberta near Conklin and is in close proximity to a number of major oilsands developments. The acquisition was financed by Harvest with the issuance of additional shares to KNOC.
