Ouch - SP didn't need this!Second Wave Petroleum Inc. ("Second Wave" or the "Company") is providing the following update on its Judy Creek operations.
On December 10(th), the Company experienced a fire at its Judy Creek 08-24-063-10W5 gas plant resulting in the plant's gas refrigeration system and the associated building suffering significant damage. While the exact cause of the fire is under review, it appears the fire commenced while third party mechanics were completing routine maintenance on a compressor engine within the refrigeration building. No injuries occurred during this incident and the fire was contained to the single building. Both the third party contractors and Second Wave operations personnel responded quickly to the situation resulting in the fire being isolated. All corporate, regulatory and emergency personnel were appropriately notified in a timely manner.
The extent of the damage to the facility will require the Company to replace the unit, the installation of which is expected to take 15 to 20 days. The Company believes that insurance proceeds will cover substantially all of the associated costs.
Prior to the outage, Judy Creek production had reached a daily net rate of approximately 1,300 boe/d with approximately 1,050 boe/d being produced from the Company's Judy Creek Pekisko oil battery. As solution gas from the Company's Pekisko oil battery is processed exclusively at the damaged 08-24-063-10W5 gas plant, production of approximately 1,050 boe/d was shut in on December 10, 2010 as the Company could no longer meet its hydrocarbon due point requirements on its sales gas stream. The Company's Judy Creek Ellerslie oil battery, which produces approximately 250 boe/d, will remain on line during this outage as the solution gas from this battery is processed at a third party facility.
The Company had completed the tie-in of its 100% working interest 09-13-063-10W5 and 12-14-063-09W5 Pekisko horizontal oil wells on December 5 with both wells still cleaning up prior to the outage. The start up of the Company's 03-14-063-09W5 Gilwood gas well and its 05-14-063-09W5 Pekisko horizontal oil well, both of which tie into the Company's Pekisko oil battery, was scheduled for December 14, 2010. Behind pipe volumes associated with these four wells is estimated at 600 boe/d and as such the temporary outage of the Company's gas plant will result in the shut in of approximately 1,650 boe/d of net production over the repair period.
The Company will provide additional guidance on progress made on repairs to the facility and related start up as timing becomes clearer.