In Part I of this series we learned of some stunning results in an overlooked heavy oil play called the Clearwater, where companies are producing heavy oil without the need for frac stimulation or steam injection, bringing us some much needed uplift in our time of deep morose.
Whether it’s the upcoming opening of the Enbridge Line 3 Replacement (Canadian leg) or the early 2020 startup of the Sturgeon Refinery, we must take our good news where it can be found. Something else has emerged, closer to home than anyone could have guessed.
A billion barrels on Edmonton’s doorstep? That’s what Geologist Steve Donaldson is calling a recent development in the Rex play, within spitting distance of Edmonton International Airport, in the Leduc-Woodbend Field.
Other experts are taking note, with geologist Neil Watson bringing us more details on this in his recent blog post.
The Rex Member is one of many Lloydminster type oil plays that, it seems, has been around forever. A search on PetroNinja reveals over 5000 wells targeting the Rex in the Eastern Alberta heavy oil belt.
Altura Energy Inc., listed on the TSX Venture Exchange, is developing the formation in the historic Leduc-Woodbend field shown below, highlighted in a search of Rex oil production below.
Map 1: Rex Oil Production
Source: Petroninja
Note how far removed the Leduc-Woodbend Rex is from the more familiar Easter Alberta version.
The Rex Member in this area is a fluvial sand transitioning to a deltaic system northwards within Altura’s project area. Stratigraphically trapped, it ranges in pay from 2-8 m in thickness, capped by a 3 m shale before encountering the Sparky Coal above. The oil is 17° API and located at an average depth of 1200 m.
The company’s latest presentation lists 13 producing wells, including extended reach horizontals (ERH), over 1200 boepd of new production, and over a billion barrels in place oil mapped over the Company’s lands. What adds further excitement is the announcement of early waterflooding attempts.
Company documents filed with the AER suggest a primary recovery factor of 10% with an additional 5% allocated to the secondary recovery scheme.
Well 100/03-02-049-26W4 has produced over 76k bbl of oil since Oct-2017. Average rate today is 35bbl/d.
Altura has taken Leduc-Woodbend Rex production from zero to 1200 bbl/d of oil (calendar day) over a three year period, shown in Figure 1 below:
Source: Petroninja
Couple that with the company’s estimates of 330 boepd IP30, 2P reserves of 200 mstboe, available facilities, and $2.3 MM capital cost and it all adds up to a positive return, and room to grow.
Click here for a list of Altura wells to navigate in Petroninja (signup required).
Operators Point Loma and Whitebark Energy have also announced entries into the play, with the former drilling one new horizontal well at 100/01-08-048-27W4M, brought on September, 2019 at 124 bopd average calendar day rate.
Like my earlier article on the Clearwater, this Upper Mannville Rex play is demonstrating there are places in Alberta for junior companies to call home, grow and make money for either private investors or public equity markets.