Pacific Rubiales announces preliminary independent evaluation of the progress
of the Star Pilot Project in Quifa SW, demonstrating a potential doubling of
the ultimate recovery factor
TORONTO, Sept. 18, 2013 /CNW/ - Pacific Rubiales Energy Corp. (TSX:PRE; BVC:
PREC; BOVESPA: PREB) announced today that it has received independent reports
relating to the progress of its proprietary Synchronized Thermal Additional
Recovery ("STAR") enhanced oil recovery pilot project in the Quifa SW heavy
oil field. The reports include estimates of the Original Oil In Place ("OOIP")
for the project, which combined with the accumulated production from the area
since the inception of the project, allows the Company to estimate that at
least a doubling of the recovery factor has been achieved from commencement of
air injection in February, 2013 to date.
Ronald Pantin, Chief Executive Officer of the Company, commented:
"The estimates from the independent engineers of the OOIP and the drainage
areas that will be affected by the pilot test area, the cumulative oil volumes
produced to date and the sustained thermal ignition of the reservoir and
successful synchronization of the producing pilot wells, have led Pacific
Rubiales to estimate at least a potential doubling the recovery factor can be
achieved by STAR. These results represent an important inflection point in the
path to successful commercial application of STAR in one of Colombia's most
important heavy oil fields.
"Based on these results, the Company is planning on converting two contiguous
well clusters in the pilot test area, which are currently producing on primary
flow, to STAR before the end of 2013. Additionally, the Company has initiated
planning for full commercial rollout of STAR in the Quifa SW field beginning
"We believe that the success of STAR has important implications beyond the
Quifa SW field because more than 75% of Colombia's total oil production growth
since 2004 has come from heavy oil, with the majority of that coming from the
Company operated Rubiales and Quifa fields, producing under primary recovery
flow methods only. The success of STAR also provides an important launching
pad for the future of the Rubiales field, currently under evaluation."
The Quifa SW field is located just southwest of and adjacent to the Company's
Rubiales field, the largest producing oil field in Colombia today. According
to the year-end 2012 reserve report from the Company's external engineering
firm, this field has an estimated OOIP of 1.331 Bbbl which covers a total
field area of approximately 44 thousand gross acres with net pay thickness
greater than 10 feet. During the first half of 2013, the field produced oil at
a rate of 54.4 Mbbl/d gross total field (24.4 Mbbl/d net after royalties). The
Quifa SW field is currently producing under primary recovery techniques
resulting in a recovery factor ("RF") of approximately 14%. As of year-end
2012, the Company had 73.1 MMbbl of net 2P reserves at Quifa SW, representing
approximately 21% of its total net 2P certified oil and liquids reserves base
in Colombia. Pacific Rubiales has a 60% working interest and is operator of
the field, while Ecopetrol, S.A. holds the remaining interest. The Quifa
contract was signed in December of 2003 and expires in December of 2031.
The Company has received technical reports analyzing the progress of the STAR
pilot project from three independent engineering firms: Hot-Tec Energy Inc.
("Hot-Tec"), RPS Energy Canada Ltd. ("RPS") and GLJ Petroleum Consultants Ltd.
("GLJ") which have provided professional opinions on the STAR Pilot project
performance to date.
The drainage areas and OOIP that will be affected by the STAR Pilot project
were estimated by these three firms, depending on their particular
assumptions, as follows:
-- Hot-Tec: 1.62 MMbbl, for a drainage area of 50 acres
-- RPS: 1.86 MMbbl, for a drainage area of 85 acres
-- GLJ: 1.78 MMbbl, for a drainage area of 80 acres
Given that the cumulative production from the project, as a result of primary
recovery, steam and nitrogen injection and in-situ combustion, is
approximately 506 Mbbl to date, it is possible to calculate that the range of
RF attributable to the Project is 27.1% - 31.2%, which at least doubles the RF
estimated for the rest of the field, producing under primary recovery.
The Company considers these RF results as preliminary and expects them to
further increase as the production in the STAR pilot project area continues as
planned for at least a few more months.
Additional highlights from each of the reports include:
-- The Quifa SW field's In-Situ Combustion Project is an
unqualified success. With more than 200 in-situ combustion
field tests, Hot-Tec regards this as the best engineered and
best planned project with real time monitoring and control
capabilities as well as the ability to safely handle H(2)S in
-- In-situ combustion is the process of choice in Quifa, which is
an oil field with a strong water drive.
-- The incremental oil recovery in Quifa SW would have been higher
still under normal operational conditions without rate or time
-- It has been clearly demonstrated that the Quifa SW crude
responds positively to oxidation (through air injection) and is
a good candidate for in-situ combustion.
-- The field performance parameters are in good agreement with
those derived from laboratory tests.
-- The principal reason for success in the application of the STAR
technology is the use of synchronization for identifying and
correcting the combustion front position.
-- Massive expansion of the STAR pilot project by drilling new
injectors and producers, and inclusion of existing wells should
be done soon to capture the gas and oil leaving the current
unconfined pattern, and increasing the combustion efficiency.
-- The STAR pilot project has established incremental oil mobility
and recovery by thermal stimulation by in-situ combustion.
-- Based on the range of OIIP and EUR (Estimated Ultimate
Recovery) estimates, RPS calculates a range of potential
incremental recovery factor due to thermal recovery by in-situ
combustion process of from 26 % to 44 % OIIP.
-- Once injection of gases started, water cuts ceased increasing
and conversely oil cut ceased decreasing.
Hot-Tec Energy Inc. is a private company affiliated with members of the
In-Situ Combustion Research Group, Department of Chemical and Petroleum
Engineering, Schulich School of Engineering, University of Calgary. The In
Situ Combustion Research Group is recognized as a global leader in the
application of in-situ combustion recovery processes.
RPS Energy Canada Ltd. is a part of RPS Group Plc, providing advice upon the
exploration and production of oil & gas and other natural resources. RPS is a
leading consultancy providing support and advice on the development of natural
energy resources across the complete asset life cycle, and is the independent
engineer that has certified the Quifa SW reserves for Pacific Rubiales in the
GLJ Petroleum Consultants Ltd. is a premier oil and gas resource consulting
firm located in Calgary, Alberta, Canada, and was engaged by Hot-Tec Energy
Inc. to analyse the pre-air injection behaviour of the STAR pilot.
Pacific Rubiales, a Canadian company and producer of natural gas and crude
oil, owns 100% of Meta Petroleum Corp., which operates the Rubiales, Piriri
and Quifa heavy oil fields in the Llanos Basin, and 100% of Pacific Stratus
Energy Colombia Corp., which operates the La Creciente natural gas field in
the northwestern area of Colombia. Pacific Rubiales has also acquired 100%
of PetroMagdalena Energy Corp., which owns light oil assets in Colombia, and
100% of C&C Energia Ltd., which owns light oil assets in the Llanos Basin.
In addition, the Company has a diversified portfolio of assets beyond
Colombia, which includes producing and exploration assets in Peru, Guatemala,
Brazil, Guyana and Papua New Guinea.
The Company's common shares trade on the Toronto Stock Exchange and La Bolsa
de Valores de Colombia and as Brazilian Depositary Receipts on Brazil's Bolsa
de Valores Mercadorias e Futuros under the ticker symbols PRE, PREC, and PREB,
Cautionary Note Concerning Forward-Looking Statements
This news release contains forward-looking statements. All statements, other
than statements of historical fact, that address activities, events or
developments that the Company believes, expects or anticipates will or may
occur in the future (including, without limitation, statements regarding
estimates and/or assumptions in respect of production, revenue, cash flow and
costs, reserve and resource estimates, potential resources and reserves and
the Company's exploration and development plans and objectives) are
forward-looking statements. These forward-looking statements reflect the
current expectations or beliefs of the Company based on information currently
available to the Company. Forward-looking statements are subject to a number
of risks and uncertainties that may cause the actual results of the Company to
differ materially from those discussed in the forward-looking statements, and
even if such actual results are realized or substantially realized, there can
be no assurance that they will have the expected consequences to, or effects
on, the Company. Factors that could cause actual results or events to differ
materially from current expectations include, among other things: uncertainty
of estimates of capital and operating costs, production estimates and
estimated economic return; the possibility that actual circumstances will
differ from the estimates and assumptions; failure to establish estimated
resources or reserves; fluctuations in petroleum prices and currency exchange
rates; inflation; changes in equity markets; political developments in
Colombia, Guatemala, Peru, Brazil, Papua New Guinea and Guyana; changes to
regulations affecting the Company's activities; uncertainties relating to the
availability and costs of financing needed in the future; the uncertainties
involved in interpreting drilling results and other geological data; and the
other risks disclosed under the heading "Risk Factors" and elsewhere in the
Company's annual information form dated March 13, 2013 filed on SEDAR at
www.sedar.com. Any forward-looking statement speaks only as of the date on
which it is made and, except as may be required by applicable securities laws,
the Company disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or results or
otherwise. Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking statements are not
guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein.
In addition, reported production levels may not be reflective of sustainable
production rates and future production rates may differ materially from the
production rates reflected in this news release due to, among other factors,
difficulties or interruptions encountered during the production of
Boe may be misleading, particularly if used in isolation. A boe conversion
ratio of 5.7 Mcf: 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. The estimated values disclosed in this news
release do not represent fair market value. The estimates of reserves and
future net revenue for individual properties may not reflect the same
confidence level as estimates of reserves and future net revenue for all
properties, due to the effects of aggregation.
This news release was prepared in the English language and subsequently
translated into Spanish and Portuguese. In the case of any differences between
the English version and its translated counterparts, the English document
should be treated as the governing version.
|Bcf | Billion cubic feet.|
|Bcfe | Billion cubic feet of natural gas equivalent.|
|bbl | Barrel of oil.|
|bbl/d| Barrel of oil per day.|
|boe |Barrel of oil equivalent. Boe's may be misleading, particularly|
| | if used in isolation. The Colombian standard is a boe|
| | conversion ratio of 5.7 Mcf:1 bbl and is based on an energy|
| | equivalency conversion method primarily applicable at the|
| | burner tip and does not represent a value equivalency at the|
| | wellhead.|
|boe/d| Barrel of oil equivalent per day.|
|Mbbl | Thousand barrels.|
|Mboe | Thousand barrels of oil equivalent.|
|MMbbl| Million barrels.|
|MMboe| Million barrels of oil equivalent.|
|Bbbl | Billion barrels|
|Mcf | Thousand cubic feet.|
|WTI | West Texas Intermediate Crude Oil.|
SOURCE Pacific Rubiales Energy Corp.
Christopher (Chris) LeGallais Sr. Vice President, Investor Relations +1 (647)
Roberto Puente Sr. Manager, Investor Relations +57 (1) 511-2298
Kate Stark Manager, Investor Relations +1 (416) 362-7735
To view this news release in HTML formatting, please use the following URL:
CO: Pacific Rubiales Energy Corp.
NI: OIL FIELD
-0- Sep/18/2013 23:05 GMT
Press spacebar to pause and continue. Press esc to stop.