Athabasca Oil Corp. (AOC), Calgary, said bitumen production from its Hangingstone 1 steam-assisted gravity drainage oil sands project in Alberta has reached 8,000 b/d and is on track to reach design capacity of 12,000 b/d in this year’s fourth quarter.
Hangingstone, about 20 km southwest of Fort McMurray, began production in July (OGJ Online, July 31, 2015). Twenty-one well pairs have been converted to SAGD production and two additional well pairs are on circulation steaming.
AOC forecasts “a relatively flat production profile” at Hangingstone for several years after it reaches design capacity.
The company recently provided early 2016 operational updates along with financial and operating results for 2015. Among these updates included the following:
• In the Montney formation, AOC recently completed a three-well pad at Placid with average drilling and completion costs of $6.9 million/well. A project connecting Placid with AOC’s Kaybob system is on track for commissioning in April.
• In the Duvernay, recent drilling and completion costs have averaged less than $10 million/well. A two-well pad at Kaybob East was recently brought on stream, and production included 44 ° gravity field condensate. The completion design was intended to test increased proppant loading in the volatile oil window.
• In the condensate-rich gas window at Kaybob West, AOC completed drilling operations on a four-well cost demonstration pad in January. Average drilling costs were $4 million/well. The company plans to complete the wells and bring them on stream in the third quarter.
AOC said it “has achieved material cost reductions with the transition to pad style operations and remains encouraged by early production results in the volatile oil window where the Company has significant exposure.”
The $475-million (Can.) light oil joint venture with Murphy Oil Co. Ltd. in the Kaybob area “is progressing towards closing” in the second quarter, the company said.