Petrobank Energy and Resources Ltd.
TSX : PBG

Petrobank Energy and Resources Ltd.

October 27, 2009 08:19 ET

Petrobank Fires Up Kerrobert THAI™ Project

CALGARY, ALBERTA--(Marketwire - Oct. 27, 2009) - Petrobank Energy and Resources Ltd. ("Petrobank") (TSX:PBG) is pleased to announce the commissioning and commencement of air injection at our Kerrobert THAI™ heavy oil project. This project applies the THAI™ technology in a conventional heavy oil reservoir at Kerrobert, Saskatchewan. Initially a two-well project, Kerrobert is a 50/50 joint venture with Baytex Energy Trust.

Kerrobert heralds a new era for fast track heavy oil projects in Canada.

- July 9, 2009: Regulatory approval received only 54 working days after filing the application.

- September 7, 2009: Drilling and completion operations completed.

- September 8, 2009: Plant construction initiated and completed in six weeks.

- September 12, 2009: The pre-ignition heating cycle ("PIHC") commenced (in the vertical wells only) and we have now started air injection.

The PIHC performed as expected, allowing us to achieve the necessary injectivity into the reservoir zone. The horizontal wells have temporary downhole pumps which were turned on at low rates to achieve a slight drawdown pressure across the horizontal well prior to air injection. Air injection has been initiated at a rate less than 10% of designed volumes to establish the in-situ combustion zone. Currently, we expect to begin producing through the plant in the next twenty-four hours. Once combustion gas is consistently produced from the horizontal well, we will cease pumping and ramp up air injection to allow the wells to flow. We will then increase air injection rates and oil production volumes are expected to increase concurrently.

This project will highlight the applicability of the THAI™ technology in Saskatchewan's conventional heavy oil resource base. We believe that a significant portion of the Province's estimated 20 billion barrels of unrecovered conventional heavy oil resources can be commercialized using THAI™. In addition, Saskatchewan is actively encouraging oil and gas development and the application of advanced technologies through an efficient, accountability-based regulatory process and competitive royalty regime.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada and Latin America. The Company operates high-impact projects through three business units and a technology subsidiary. The Canadian Business Unit, operated by Petrobank's 64% owned TSX-listed subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is a premier light oil production company combining high growth, long-life Bakken reserves and production with legacy conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. The Latin American Business Unit, operated by Petrobank's 67% owned TSX-listed subsidiary, Petrominerales Ltd. (TSX:PMG), is a Latin American-based exploration and production company producing oil in Colombia with 16 exploration blocks covering a total of 1.9 million acres in the Llanos and Putumayo Basins of Colombia and 2.6 million acres in the Ucayali Basin of Peru. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., owns 75 net sections of oil sands leases in Alberta, 36 sections of oil sands licenses in Saskatchewan and operates the Whitesands project which is field-demonstrating Petrobank's patented THAI™ heavy oil recovery process. THAI™ is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil that integrates existing proven technologies and provides the opportunity to create a step change in the development of heavy oil resources globally. THAI™ and CAPRI™ are registered trademarks of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank.

Resources and Contingent Resources. In this press release, Petrobank has discussed "contingent resources" or "resources". "Resources" are oil and gas volumes that are estimated to have originally existed in the earth's crust as naturally occurring accumulations but are not capable of being classified as "reserves". The following are excerpts from the definition of "contingent resources" as contained in Section 5 of the COGE Handbook, which is referenced by the Canadian Securities Administrators in "National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities". "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. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as "contingent resources" the estimated discovered recoverable quantities associated with a project in the early evaluation stage. "Contingent resources" are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status. "Resources" and "contingent resources" do not constitute, and should not be confused with, reserves.

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to the operations of Petrobank's Kerrobert heavy oil project. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: technology risks, general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability, the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrobank that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrobank assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information

  • Petrobank Energy and Resources Ltd.
    John D. Wright
    President and Chief Executive Officer
    (403) 750-4400
    or
    Petrobank Energy and Resources Ltd.
    Chris J. Bloomer
    Senior Vice President and Chief Operating Officer, Heavy Oil
    (403) 750-4400
    or
    Petrobank Energy and Resources Ltd.
    Corey C. Ruttan
    Senior Vice President and Chief Financial Officer
    (403) 750-4400
    or
    Petrobank Energy and Resources Ltd.
    Suite 1900, 111 - 5th Avenue S.W.,
    Calgary, Alberta, T2P 3Y6
    (403) 750-4400
    (403) 266-5794 (FAX)
    Email: ir@petrobank.com
    Website: www.petrobank.com