Proven Best Practices: March 2014

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Shallow SAGD Approvals on Hold	The Club	Natural Gas Prices on the Rise	Discover Your Superpower

Over the last few months, the Alberta Regulator sent several SAGD operators a note saying applications are on hold until new interim regulations are in place.

The AER is deferring decisions on shallow SAGD projects until consultation on formal regulatory requirements is complete.

The area under closer scrutiny is Townships 80-103 near the town of Fort McMurray. This is where the Clearwater shale is shallower than 150 metres or non-existant. The Clearwater shale is generally accepted as a caprock where it is sufficiently thick.

Perhaps sparked by a bitumen to surface leak last year in CNRL’s Primrose field, the AER has become much more cautious about shallow SAGD projects.

The AER is concerned with schemes whose maximum operating pressure (MOP) is higher than the AER’s standard. The current standard is 80% of the caprock fracture closure pressure.

Several operators have been successful at getting their scheme MOP raised recently. Others have received recent permission for a short term high pressure boost for well start up. Will this AER concern impact such recent approvals?

More information about how the AER is dealing with operators of shallow SAGD schemes can be found in AppIntel. AppIntel is cutting edge web software that data mines intelligence from AER applications. It is an index to and summary of regulatory applications.

~Granger J. Low

For the first time in several years, natural gas prices have topped $5 /GJ.

Sure, WTI oil is up possibly due to concerns about sanctions against Russia in its military involvement in the Ukraine.

But a gas prices recovery is a pleasant surprise. Some traders report a spike of burner tip gas prices in Eastern North America of over $10/GJ.

Will this trend have staying power?

David is an engineer in charge of production for a handful of Alberta wells.

He would often wonder if or how wells offsetting his were cutting in to his production. He had no way of knowing exactly what was going on in his competitors’ wells, and often felt at the mercy of the Board in terms of protecting his production.

Then David discovered AppIntel, which allowed him to see directly what his offsetting competition were doing, and easily discern how they might be cutting into his pool. This gave him the insight and confidence necessary to raise objections over questionable practices and protect his interests.

With newfound vision, David monitors and defends his production, detecting anomalies before they become problems, and keeping his assets secure.

Protect your assets from drainage!