I plan to spend a day working on my models for PetroBakken and PetroBank next week. I am a bit concerned that lower oil prices will cause PetroBakken to cut their dividend but so far they say they are maintaining it. For PetroBank, their Kerrobert Heavy Oil Project is finally ramping up. They had a lot of rain up there last quarter but things are drying out. Any progress on this project will help the share price. - Dan
OPERATIONAL UPDATE
Kerrobert Project
Our Kerrobert project operations are underway with eight of the ten new well-pairs on air injection and in the initial production phase. The first expansion well-pair was placed on air injection and production in the middle of May, with an additional four well-pairs placed on air injection by the end of the second quarter. The PIHC for the remaining five well-pairs began at the end of the second quarter and currently three of these well-pairs are on air injection, with the remainder expected to be on air injection by September.
Our operating procedures continue to evolve. We have been able to reduce the duration of the PIHC from a planned eight weeks to approximately four weeks. Following the PIHC, the vertical wells commence air injection at low rates and the horizontal production wells are brought on production with a progressive cavity pump. The initial clean-up fluids consist of water, including condensed water from the PIHC steam injection, and some native oil. As these fluids are produced, the combustion gas volume increases, the temperature in the horizontal well begins to rise and the well begins to produce an oil and water emulsion at low rates. Well bore temperatures will increase and combustion gas, along with some native oil and occasional upgraded THAI® oil, will be produced. As we measure the combustion gas communication and rising well bore temperatures, we will increase the air injection in stages to facilitate the combustion zone development.
The second quarter was a period of transition for the Kerrobert project. We completed the drilling of the expansion wells, began operations on the new wells and started dismantling the temporary facilities in anticipation of the new wells being tied into the new central processing facility ("CPF"). Very wet weather delayed our access to the CPF and well-site until mid-July. We experienced significant down time on the original Kerrobert wells due to pump changes, decommissioning of the original Kerrobert facilities and delayed tie-in to the new CPF. These activities resulted in second quarter Kerrobert production of approximately 40 bopd.