RE:Expansion into SAGD production... Wow... Excellent...Kherson wrote: REFORD
Cardinal has identified Reford as its first project for development. We have decided to take a conservative approach in developing our first SAGD asset and have focused our development plan on building a 6,000 bopd SAGD facility. Our decision to start with this size of project was based on the capital cost and the project's ability to produce at a flat production profile for approximately 20 years. By taking a conservative first step into SAGD, Cardinal expects it will be able to increase its sustainability in a controlled growth environment while developing a project that will further our low decline/free cash flow model. Reford development expenditures are targeted to be approximately $155 million in total from start to first steam. We anticipate the project will take 22 months to implement to full production, with project kickoff expected to happen in Q4 2023.
In 2024, the majority of the initial capital costs will be constructing the SAGD facility with minor onsite costs. Cardinal forecasts at estimated pricing and development costs, the Reford thermal project will payout within 18 months of initial production.
In my opinion, this new direction that Cardinal is taking changes everything.
Kherson
The last time I was in a SAGD plant was many years ago. It was an outfit called Southern Pacific Resources in Alberta. The CEO did an excellent job of building the facility. If I remember right it was about $450M on budget and on time.
Problem was the same CEO could then not figure out how to get oil out of the ground and they went belly up in quite a hurry. Not a good memory about SAGD -- but hopefully it was just a management problem. He was great at building and terrible at operating.