BlackPearl is the operator of the Mooney heavy oil property which is located in north-central Alberta. The Mooney field was initially developed using conventional primary production methods. In 2011, we completed the first phase of an enhanced oil recovery (EOR) development on a portion of the field to enhance production and significantly increase overall oil recovery.
The EOR process employed at Mooney is an alkali surfactant polymer (ASP) flood. An ASP flood involves adding a polymer to the water to thicken it and adding alkali and surfactant to mobilize additional reservoir oil. This ASP mix is then injected, re-pressurizing the reservoir and sweeping additional oil to the producing wells. We ran a polymer flood pilot at Mooney for about a year and a half and in this short time recovered approximately 18% of the oil-in-place. Conventional primary recovery rates without ASP flooding would typically be 3% to 5%.
In 2011, we constructed, commissioned and commenced operating water handling and ASP injection facilities. During the implementation of Phase 1 of the ASP flood at Mooney 25 of the existing wells are being shut-in and converted to ASP injection wells. Significant production response from Phase 1 is expected to occur by late 2012. Peak production from Phase 1 is expected to be 3,000 to 4,000 boe/day.
In 2011 BlackPearl continued its conventional development of the Mooney Phase 2 lands drilling an additional nine horizontal wells directly west of the Phase 1 area. Expansion of the ASP flood into the Phase 2 lands is expected to be implemented after results are seen at Phase 1.
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 encouraging enhanced oil recovery (EOR) developments by reducing royalties on fields where tertiary recovery is implemented. The Company has received EOR royalty status for Phase 1 of the Mooney ASP flood and initial royalty rates for production from the ASP flood are expected to be about 10 percent.
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