BlackPearl is the operator at Blackrod, which is an in situ (SAGD) oil sands project located south of Fort McMurray, in the Athabasca oil sands region of northern Alberta.
In 2011, we successfully completed construction of a SAGD pilot on our lands. The Blackrod pilot consists of a single SAGD horizontal well pair, water source and disposal wells, observation wells, water monitoring wells and a central facility consisting of water treatment and steam generation equipment and other associated facilities. Steam injection was initiated in June 2011 and following a warm up period, the production well was put on pump in September 2011. The SAGD well pair is expected to reach its ultimate production potential of over 500 barrels per day by Q1 2013.
The information collected from the pilot operation is being used, in part, to prepare an 80,000 barrels per day commercial development application. Other ongoing work necessary to submit this application includes collection of environmental baseline data, interpretation of 3D seismic program and additional delineation drilling. The 80,000 barrels per day commercial development application will be submitted to regulatory bodies in the second quarter of 2012, with the first phase of the project designed for 20,000 barrels per day.
In 2012, we will begin the detailed engineering work for the first commercial development phase of our SAGD project. We will also be adding a second horizontal well pair to our existing SAGD pilot at Blackrod to provide us with additional completion and start-up information that will further enhance the design of our commercial operations.
The yearend reserves assigned to Blackrod relate to our SAGD pilot while the 2C resources relate to the 80,000 barrels per day commercial SAGD development.
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