CALGARY, ALBERTA -- (Marketwired) -- 02/23/16 -- Pan Orient Energy Corp. (TSX VENTURE: POE), on behalf of its 71.8% owned subsidiary Andora Energy Corporation ("Andora"), is providing an update for Andora's Steam Assisted Gravity Drainage ("SAGD") oil sands project at Sawn Lake Alberta, Canada.
Highlights
-- Bitumen production in 2016 at the Sawn Lake Demonstration Project has
reached a steady state production level over the past seven weeks of 606
barrels per day ("BOPD") (303 BOPD net to Andora) with an instantaneous
steam-oil ratio ("ISOR") of 2.2 from the one SAGD wellpair. Bitumen
production, on a 100% basis, averaged 596 BOPD with an ISOR of 2.2 in
January and has averaged 620 BOPD with an ISOR of 2.1 during the first
21 days of February. A December 31, 2014 contingent resources report by
Sproule Unconventional Limited assigned the following values to the
demonstration project SAGD well pair as 2016 averages: Low Case of 242
BOPD with an ISOR of 5.7; Best Case of 345 BOPD with an ISOR of 4: High
Case of 449 BOPD with an ISOR of 3.1
-- The demonstration project commenced bitumen production in September 2014
and has successfully captured the key data associated with the
objectives of the demonstration project. The demonstration project has:
-- demonstrated that the SAGD process works in the Bluesky formation at
Sawn Lake
-- established characteristics of ramp up through stabilization of SAGD
performance
-- indicated the productive capability and ISOR, and
-- provided critical information required for well and facility design
associated with future commercial development.
-- Given the current low price environment for bitumen, Andora and its
joint venture partners have decided to suspend the Sawn Lake
Demonstration Project operations at the end of February 2016. This
decision considers the expectation that extremely low bitumen prices may
continue for some time and the estimated time required for approval of
the 3,200 BOPD expansion application at the demonstration project site,
which is being submitted in March 2016.
-- It is expected that a reactivation of the demonstration project facility
and wellpair would be considered as part of a potential commercial
expansion to 3,200 BOPD. An expansion is dependent on regulatory
approval, completion of detailed engineering and a higher commodity
price environment to support project economics and financing.
-- Work continues with respect to submitting the expansion application, and
updating the Sawn Lake reservoir model and contingent resource report to
incorporate the results of the demonstration project.
-- Production results to date are not necessarily indicative of long-term
performance or of ultimate recovery and the Sawn Lake demonstration
project has not yet proven that it is commercially viable.
Andora's SAGD Oil Sands Project at Sawn Lake
-- Andora is focused on developing the bitumen resources at the Sawn Lake
property in the Peace River Oil Sands Region using SAGD development.
-- Andora has interests in 88 sections of oil sands leases at Sawn Lake,
within the central Alberta Peace River Oil Sands area. Andora is the
operator of both the 12 section Central Block, in which it holds a 50%
working interest, and the 16 section South Block, in which it holds a
100% interest. In addition, the North Block contains nine sections where
Andora is the operator with a 100% working interest, and an additional
51 sections where Andora has a 10% working interest and is a non-
operator.
-- At December 31, 2014 a National Instrument 51-101 compliant contingent
resources evaluation for Andora's oil sands project at Sawn Lake
Alberta, Canada, was prepared by Sproule Unconventional Limited
("Sproule") based on development using SAGD. Contingent resources are
those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations using established
technology or technology under development, but which are not currently
considered to be commercially recoverable due to one or more
contingencies. The contingent resources volumes estimated in the Sproule
Unconventional report are considered contingent until such time as
commercial recovery has been confirmed with SAGD production rates from a
SAGD pilot, regulatory approvals for commercial SAGD development have
been obtained and the company has a firm commercial development plan and
funding for the commercial development. Contingent Resources are further
classified as "High", "Best" and "Low" in accordance with the level of
certainty. There is no certainty that it will be economically viable to
produce any of the reported contingent resources volumes.
The December 31, 2014 contingent resources report did not incorporate
the results of the Sawn Lake demonstration project to that date since
those results were very early stage at that point as the steam chamber
continued to build.
The "Best Case" company gross contingent resources at Sawn Lake in the
December 31, 2014 report were 214 million barrels of bitumen recoverable
attributed to Andora's working interests. The Central Block was assigned
139 million barrels of bitumen recoverable, the South Block was assigned
74 million barrels of bitumen recoverable and the North Block was
assigned 1 million barrels of bitumen recoverable. This represented 154
million barrels of recoverable bitumen attributed to the 71.8% ownership
interest of Pan Orient in Andora.
Reference is made to Pan Orient's Annual Information Form Dated April
30, 2015, available on SEDAR, for additional information.
Sawn Lake SAGD Demonstration Project
-- The first step towards determining the commercial viability of the SAGD
recovery process at Sawn Lake is a demonstration project to establish
that the SAGD process works in the Bluesky formation reservoir and to
provide an indication of the productivity of the reservoir and the
amount of steam injection required to produce the bitumen, which are key
components in assessing the potential for SAGD development at Sawn Lake.
-- Andora is the operator and holds a 50% working interest in the
demonstration project, located in the Central Block of Sawn Lake, which
commenced in 2013. The demonstration project consists of one SAGD well
pair drilled to a depth of 650 meters and a horizontal length of 780
meters and the SAGD facility for steam generation, water handling and
bitumen treating. Steam injection commenced May 21, 2014, bitumen
production commenced September 16, 2014 and the steam chamber reached
the top of the Bluesky formation sandstone reservoir in October 2015.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations located onshore Thailand, Indonesia and in Western Canada.
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: the success and stability of bitumen production rates and associated steam oil ratio and the commencement and duration of suspension of the Sawn Lake Demonstration Project, potential reactivation of the project and the factors on which any reactivation is dependent and forward looking information contained in the contingent resources evaluation prepared by Sproule . By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: changes in project schedules, well test, operating and reservoir performance, the effects of weather and climate change, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct. Readers are cautioned that well test results, when announced, will not necessarily be indicative of long-term performance or of ultimate recovery.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Pan Orient Energy Corp.
Jeff Chisholm
President and CEO (located in Bangkok, Thailand)
jeff@panorient.ca
Pan Orient Energy Corp.
Bill Ostlund
Vice President Finance and CFO
(403) 294-1770
