MEG Energy's reservoir enhancements drive operating costs to record lows
MEG Energy's proprietary reservoir enhancement technology is being credited with lowering Christina Lake's steam-to-oil ratios to record lows.
The eMSAGP program (enhanced Modified Steam And Gas Push) involves co-injecting trace volumes of a non-condensable gas, such as methane, along with the steam to keep a consistent pressure in the reservoir, even as the steam cools. Infill wells (or collector wells) are also drilled between producing SAGD well pairs, allowing for higher bitumen production rates without additional steam.
Steam-to-oil ratios (SOR) average 1.0 to 1.25 in the eMSAGP wells, lowering the overall SOR at Christina Lake to 2.3 for the first 6 months of this year. Excluding energy costs, operating costs declined to $4.23 a barrel in the second quarter. Including the cost of natural gas, operating costs are now down 12% from the same time last year to $7.42 per barrel.
The technology is currently being used at MEG's Phase 1 and 2 wells, representing about 25% of the company’s production. eMSAGP is now being applied to Phase 2B wells, covering the remaining 75% of output.
The next phase of evolution for MEG is the addition of solvent, which it hopes will drop GHG emissions 43% below the industry average. eMVAPEX received over $12 million in funding from both the federal and provincial governments.
For the full year, MEG says it expects non-energy operating costs to now be in the range of $5.00 - $5.50 per barrel, approximately 16% lower than its original 2017 guidance.