BlackPearl Resources Inc.

Blackrod, Alberta



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Working interest100%
Land 40,960 net acres
2P reserves 182 MMbbl (Dec. 31, 2013)
2C resources 566 MMbbl (Dec. 31, 2013)
Pilot Production 262 barrels per day (Q4 2013)
Depth 300 metres
Formations Lower Grand Rapids
Production Potential     80,000 barrels per day

Blackrod is an in situ (SAGD) oil sands project located south of Fort McMurray, in the Athabasca oil sands region of northern Alberta. BlackPearl has a 100% working interest in the Blackrod lands.

The geological formation of interest is the Cretaceous Lower Grand Rapids at a depth of approximately 300 metres. The Lower Grand Rapids formation is a shoreface sand which was deposited in a broad coastline setting. This depositional setting allowed for a large, regionally consistent reservoir. The Lower Grand Rapids reservoir sand ranges in thickness from 8 to 28 metres. Bitumen saturation is between 50% and 75%. The Lower Grand Rapids is stratigraphically equivalent to known producing reservoirs in the Sparky, General Petroleum and Rex intervals within the Manville Group.

In 2011, the Company began a single well SAGD pilot on the Blackrod lands. The purpose of the pilot was to demonstrate the use of SAGD technology to produce bitumen from the Lower Grand Rapids on the Blackrod lands. The pilot data was used to better understand the reservoir deliverability and optimum operating methods. In 2012, production from the 700 metre long pilot well reached 400 barrels per day with a steam oil ratio (SOR) of just under 3. In 2013, BlackPearl drilled a second pilot well pair at Blackrod. The second well pair was drilled slightly deeper in the reservoir and is longer than the original pilot well pair, at approximately 950 metres. Steam injection in the second well pair is expected to begin in the second half of 2013.

In May 2012, BlackPearl filed an 80,000 barrels per day commercial development application with the ERCB and Alberta Environment for its Blackrod SAGD Project in northern Alberta. The project will likely be developed in phases. The first phase of this project is planned for 20,000 barrels per day. Regulatory approval for similar types of projects by other companies has typically taken 18 to 24 months.

In 2013, we acquired an additional 6,400 acres of oil sands acreage directly south and contiguous to our existing Blackrod lands. Our internal estimate suggests that the acquisition could add 50 to 75 million barrels of "best estimate" contingent resources to the Blackrod commercial project.

As at December 31, 2012, Sproule assigned 182 million barrels of proved plus probable reserves (BlackPearl's working interest, before royalties) to the pilot operations and the first phase of commercial development of the project. In addition, Sproule has assigned 476 million barrels of contingent resource (best estimate) to the remainder of the Blackrod SAGD Project.  

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