RE:RE:RE:Cardium players Kavern (Nov and Dec) production estimateThat is exactly what I would do, either SAGD or waterfood.
As of now, neither are competative IRR wise with cold flow.
However in my view, oil will be significantly higher in price a few years down the road (impossible to give a date, but it seems unquestionable that we are at the early stages of outgrowing oil supply).
Nuclear power expansion has at least a 2030 horizon.
Oil demand will be growing 1-2 million barrels/day for the 6 years until 2030.
How will that demand be met? SA and UAE have small increases planed for 2027 ish. Guyana will have a bit to add. Meanwhile it looks like the US may of peaked in Oct/23. Add that to SA's spare capacity of about 2 mm/b/day, and about 3 billion barrels of accessable oil in global inventories - and thats it. It all adds up to a global oil panic sometime between now and 2030.
(insert plug here for OBE, which intends to offer 50,000 barrels/day for sale in 2026 - possibly right into a very tight oil market)
When the oil price increases, then previoulsy uneconomic options become doable.
My personal reservation about SAGD is that it's a business model based on low cost Natural Gas. North American (especially Albertan) natural gas is in a supply surplus, which has resulted in the creating of numerous businesses based on that low Nat Gas price. That model can not be expected to last indefinately.
With all the LNG export facilities being built (expanded), I expect domestic natural gas prices will increase. That said, natural gas is abundant in N.Am - so maybe producers will just drill more, and pipelines will get expanded. I've no idea what Alberta Natural Gas prices will be in 5-10 years. I'm concerned (because I don't know) what impact $10 natural gas for example, would have on SAGD production? You get the idea. SAGD is not something you can just shut in if Nat Gas gets expensive - once you've built it, you are stuck with it.
At the end of the day, it will be an NPV calculation - and NPV calculations are tricky when there is a lengthy period between cash out, and cash in.