Post by
JohnJBond on Dec 20, 2024 2:57pm
OBE Recent Project Approvals.
OBE recent project approvals.
Polymer Flood 1.0
Those following along on Twitter will know that on Oct 31 OBE applied for approval to start a Polymer Flood on two sections within their Harmon Valley South heavy oil field.
The application stated an expectation of improving the oil recovery from 5% of the oil in place (as is without the polymer flood), to 10% with the polymer flood. A doubling of the expected oil recovery from about 3.8 million barrels of oil to about 7.64 million barrels. Or in simple terms, it is expected to add an additional 3.8 million barrels of oil. This is from about 8 existing wells.
The heavy oil in this area is recovered by drilling wells with several long horizontal well bores (8-12 seems to be the current number of horizontal laterals). These laterals extend for around a mile (some shorter, some longer).
Even though these wells have average initial oil flows around 250 bbls oil per day (with some starting out over 600 bbls oil per day or more), and ultimate oil recovery in the 300,000 – 600.000+ barrel range, they only get about 5% of the oil in the pay zone.
This means, when the well goes dry, 95% of the oil is still in the ground.
You get really good wells, that produce nicely for 10-15 years, but there is so much oil here, that when the well reaches the end of its life, 95% of the oil is still there!
This situation is perfect for enhanced recovery – ie adding something to the mix that increases the recovery. In the case of a polymer flood, an increase in the recovery rate of 5% may not sound like much, but because the unenhanced recovery rate is only 5%, adding another 5% means you double the amount of oil from a well.
In this context, adding a polymer flood to the mix, is a big deal. Big enough to take a good well, and make it twice as good.
On Dec 12, OBE received approval to implement their polymer flood in Harmon Valley South.
This is a first for OBE. If it works as anticipated, it will double the ultimate oil recovery in the affected wells (About 8 wells are directly affected. Surrounding wells may also benefit).
More importantly, if it works, this increase in recovery may be applied elsewhere in OBE’s Peace River heavy oil well portfolio.
Cadotte Oil Field Approval
On Oct 2, OBE applied to develop a large 54 section area at Cadotte (the Cadotte Application).
The application can be found online. I’ve posted many of the pages I found interesting on Twitter. I encourage you to look for yourself.
The application sets out some useful information.
1. An estimate of the amount of oil that can be recovered per quarter section using their cold flow multi-lateral extraction method. That estimate is 6% (apparently better than the successful Harmon Valley South oil field).
2. An estimate of the amount of oil that can be recovered per quarter section – about 600,000 bbls of oil.
3. An average pay thickness of 11 meters
4. A map of the sand thickness
5. A vertical log along a line stretching through the cadotte application.
6. A statement from OBE that upon approval, OBE will initiate development of this field in Q1 2025.
54 sections is 216 quarter sections.
600,000 bbls of oil per quarter section is about 130 million barrels
On Dec 16 OBE received approval for this Cadotte Application.
What is 130 million barrels of oil worth? I’ll let you do that math yourself.
Go one step further, and consider what the Cadotte Application might produce if OBE were to use a polymer flood in this area similar to the one just approved above!
Summary
In my view, Dec 12, and Dec 16 provided OBE shareholders with two important approvals.
If they turn out as presented in their applications to the Regulator, they may add major value to OBE. Value the market seems to presently value at nothing.
Please review these applications yourself, and draw your own conclusions. I may be mistaken.
Sincerely,……………….