Pengrowth outlines 5-year plan to double production at Lindbergh
Pengrowth Energy provided an update this week on its plans to dramatically grow output at the Lindbergh in-situ facility over the next 5 years.
Lindbergh uses steam-assisted gravity drainage (SAGD) technology to extract bitumen in-situ from the oil sands. The SAGD facility is located in the Cold Lake area near the Alberta/Saskatchewan border. The Lindbergh deposit holds an estimated 317 million barrels of proven and probable reserves.
The commercial plant achieved first oil in 2015 and underwent an optimization program to boost output beyond its nameplate capacity of 12,500 bbl/day. Through the addition of eight new infill wells, Pengrowth says production currently exceeds 17,500 bbl/day and remains on track to exit the year at 18,000 bbl/day.
The company also says the Alberta Energy Regulator (AER) has approved its plans for the co-injection of non-condensable gas and solvents to further reduce steam loads and improve steam-to-oil ratios (SOR) at the site. Operating costs are currently tracking at about $13.60 per barrel, including transportation, bringing netbacks to $26.16 per barrel.
The SAGD operator is evaluating the addition of more co-generation capacity at the site and the drilling of new well pads and infill wells, with an eye to growing production to 20,000 bbl/day by the end of 2020 and potentially 35,000 bbl/day by 2023. Lindbergh already has regulatory approvals in place for 40,000 bbl/day of production.
Assuming a West Texas (WTI) price of $65 a barrel (roughly US$49), Pengrowth says it is prepared to boost capital spending to $120-125 million next year, allowing it to still remain fully funded through internal cash flow.
Pengrowth stock (TSX:PGF) has come under pressure in recent years and has fallen below the critical $1/share level required to remain listed on the TSX. The company says it expects to finalize its 2019 capital budget early next year.
PENGROWTH ENERGY PENGROWTH PROVIDES FRAMEWORK FOR MULTI-YEAR DEVELOPMENT PLAN
PENGROWTH ENERGY CORPORATE PRESENTATION: MAY 2018
AER LINDBERGH: 2017 ANNUAL PERFORMANCE PRESENTATION
OIL SANDS MAGAZINE PROJECT PROFILE: LINDBERGH