BlackPearl Resources Inc.

Mooney, Alberta


Working interest100%
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Land 30,720 net acres
2P reserves 16.4 MMboe
(Dec. 31, 2016)
Best estimate risk adjusted contingent resources 11.2 MMboe
(Dec. 31, 2016)
Recent Production 785 barrels of oil equivalent per day
(Q4 2016)
Depth 900 metres
Formation Bluesky
Production Potential 3,000 - 4,500 barrels of oil equivalent per day

Mooney is a conventional heavy crude oil property located in north-central Alberta. BlackPearl has a 100% working interest in approximately 48 sections (30,720 acres) in the Mooney field. The Mooney field produces from the Cretaceous Bluesky sand formation, which is at a depth of approximately 900 metres. Total production from the Mooney area was 801 boe/d in 2016.

BlackPearl acquired its interest at Mooney when it acquired Atlas Energy Ltd. in 2006. The field was initially developed for conventional production using horizontal wells. A water flood was attempted in 2006; however, it only recovered an additional 2% to 3% of the oil in place. The Company believed the performance of the Mooney field could be further enhanced through ASP flooding. ASP flooding involves adding a polymer chemical to the water to thicken it. The addition of alkali and surfactant chemicals reacts with the natural acidity of the oil to create an in situ "soap" to mobilize additional reservoir oil. This water and chemical mix is then injected to initially re-pressurize the reservoir and then sweep additional oil to the producing wells.

A three well polymer pilot, initiated in 2008 and operated for approximately 14 months was undertaken prior to proceeding to commercial development. During the term of the pilot oil recoveries increased to approximately 18% of the oil in place. Conventional recovery rates without ASP flooding are estimated to be 3% to 5%. As a result of the success of the polymer pilot, in late 2009, the Company filed a development application with the ERCB to commence a commercial ASP flood at Mooney.

ERCB approval to proceed with phase one of our commercial ASP flood was received in late 2010 and field construction of the chemical and water handling facilities commenced immediately thereafter. During the implementation of phase one, twenty-five of the existing wells were shut-in and converted to ASP injectors. ASP injection commenced in the third quarter of 2011.

In 2012, a new heavy crude oil processing facility was constructed to handle the increased fluid volumes from the area. The ASP injection facility and heavy crude oil processing facility that have been constructed at Mooney are expected to accommodate future phases of development at Mooney. Production from the ASP flooded area increased from approximately 316 boe/d in 2011 to approximately 1,246 boe/d in 2015.

During the first quarter of 2016, as a result of continued low oil prices, we elected to shut-in the majority of the phase one ASP flood at Mooney, or approximately 900 barrels of oil per day. With the recent improvements in crude oil prices, we plan to selectively bring back on production of the shut-in wells at Mooney. No new drilling activity occurred at Mooney in 2016.

We have also begun development of the phase two and phase three lands at Mooney. As at December 31, 2016, a total of 35 horizontal wells have been drilled on the phase two lands and six horizontal wells have been drilled on phase three lands. In 2013, we applied for and received regulatory approval to expand the existing ASP flood to the phase two lands. Due to low oil prices, the expansion of the ASP flood to phase two lands is not likely to start until 2018 and continue for several years thereafter. We believe there is further expansion potential on our Mooney lands which we plan to test in the future.

The oil quality at Mooney ranges from 12° API to 19° API, with an average of approximately 16° API. The viscosity of the oil ranges from 150 centipoise to several thousand centipoise. The Mooney field lies outside the designated Peace River oil sands region and is therefore not eligible for oil sands royalty treatment. However, the Alberta government has programs that encourage EOR developments by reducing royalties on fields with tertiary recovery programs. The Company has received EOR royalty status for phase one of the Mooney ASP flood. We expect to file our application for EOR royalty status on phase two lands in 2018.

At December 31, 2016, Sproule assigned proved plus probable reserves of 16.7 million boe to the Mooney area (BlackPearl's working interest, before royalties).

At December 31, 2016, on a risked basis, Sproule has assigned 11.2 million boe of contingent resources (best estimate) to the Mooney area.

For additional reserve and contingent resources information see the Company's Annual Information Form on our website.  

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