BlackPearl Resources Inc.



Onion Lake, Saskatchewan - Thermal Production


KEY FACTS

2P Reserves138.5 MMbbls
(Dec. 31, 2017)

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Best estimate risk
adjusted contingent resources
23.0 MMbbls
(Dec. 31, 2017)
Recent Production 6,204 barrels per day
(Q4 2017)
Production Potential   12,000 - 18,000 bbls/d



A portion of the lands at Onion Lake are amenable to thermal development in the Lower Cummings formation. In 2009, BlackPearl undertook a successful two well thermal (CSS) pilot on the property. The reservoir in this area of the Onion Lake lands ranges between 8 and 25 metres thick, which makes it suitable for thermal development.

In 2011, BlackPearl filed a 12,000 bbls/d modified SAGD (horizontal producer wells and vertical steam injection wells) commercial thermal development application with Saskatchewan Energy and Resources and Indian Oil and Gas Canada. The thermal application was amended in 2012 to include additional lands for development. In 2013, the Company's thermal development application was approved. In order to manage capital spending on the thermal project BlackPearl elected to develop the project in phases; the first phase of the thermal project was designed for oil production of approximately 6,000 bbls/d. Construction of the first phase of the Onion Lake thermal project began in the first quarter of 2014.

During the second quarter of 2015, construction of the first phase of the Onion Lake thermal project was completed with initial steam injection occurring in May 2015. Effective October 1, 2015, the Company commenced commercial production at the Onion Lake thermal project. During the second quarter of 2016, the first phase of the Onion Lake thermal project reached its productive design capacity of 6,000 barrels per day.

During the first quarter of 2017, the Company commenced construction of the second phase of the Onion Lake thermal project. Total estimated costs for the project are between $180 and $185 million. The Company entered into a fixed price agreement to fabricate the central processing facilities and pad facilities for this second phase, which represents approximately 40% of total estimated capital costs.

Steam injection at the second phase of the project began in February 2018. First oil is expected before the end of the second quarter of 2018 and we anticipate reaching peak production approximately 12 months after initial steam injection, a similar timeline to that achieved for phase one.

During 2017, BlackPearl produced an average of 5,686 boe/d at Onion Lake from thermal production wells (BlackPearl's working interest, before royalties), primarily heavy crude oil with an API gravity between 10° and 11°. As at December 31, 2017, there were 13 thermal producing wells on the property. Production from the Onion Lake area is currently trucked to third party processing facilities or pipeline and rail terminals.

At December 31, 2017, Sproule Associates Limited assigned proved plus probable reserves of 138.5 MMbbls to the Onion Lake area thermal operations (BlackPearl's working interest, before royalties).

At December 31, 2017, on a risked basis, Sproule Associates Limited assigned 23.0 MMbbls of contingent resources (best estimate) to the Onion Lake thermal operations (BlackPearl's working interest, before royalties).

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



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