Granite Oil Corp. Press Release, February 22, 2016, MarketWired
GRANITE OIL CORP. (“Granite” or the “Company”) (TSX:GXO)(OTCQX:GXOCF) Granite is pleased to announce its budget and guidance for 2016.
Granite also announces that it has received the approval of the Alberta Energy Regulator (“AER”) to operate its gas injection enhanced oil recovery (“EOR”) scheme on its 100%-owned Alberta Bakken property under a consolidated regulatory framework across 23 contiguous sections of land. This approval is a key milestone for Granite as it provides Granite with additional flexibility to expand and optimize its EOR scheme, a process which forms the backbone of Granite’s operational plan for 2016.
Fourth Quarter 2015
Granite drilled two horizontal production wells during the fourth quarter of 2015 and averaged approximately 3,330 bbls/d of oil production during the quarter. Capital expenditures were approximately $8.5 million, including $1.7 million for the expansion of its gas injection facilities, which provides long-term injection capacity for the continued expansion of the EOR scheme. Granite also drilled a vertical test well in the western portion of the Bakken pool at a cost of $1.6 million. This was Granite’s final commitment well and continued to expand the size of Granite’s Bakken oil resource.
Granite paid down approximately $1.8 million of bank debt during the quarter resulting in year-end net debt of approximately $39.8 million, a 4% reduction relative to September 30, 2015.
Granite’s budget for 2016 is sustainable and is funded by internally generated funds flow. It is designed to bridge the current low commodity price environment plus maximize shareholder value over the long-term. …
Regulatory Approval of Enhanced EOR Scheme and Operational Update
A key component to Granite’s success is the evolution of its gas injection EOR scheme on its 100%-owned-and-operated Bakken oil pool. The Alberta Energy Regulator (AER) approval, obtained in the fourth quarter of 2015, allows for an accelerated implementation of Granite’s long-term plan while providing the flexibility to optimize injection volumes, production rates, and future drilling.
The approval grants Granite Good Production Practice ‘GPP’ over 23 contiguous sections of land, estimated by Granite to contain approximately 200 million bbls of original oil in place (“OOIP”). The approval removes gas-associated rate restrictions for all wells within the EOR scheme area. The Company currently has five producing oil wells flowing at restricted rates located within this area. The approval also allows for injected volumes to exceed produced volumes (VRR of greater than 100%) for a period, until cumulative production has been met, providing the opportunity to return the pool to original pressure conditions.
The map attached shows the scope of the AER injection approval area and the associated gas injection wells and production wells.
In anticipation of this approval, a gas pipeline and meter station from a local gas utility provider was recently commissioned by Granite. This provides Granite access to its existing gas production located north of the Bakken oil pool to support its EOR scheme. This infrastructure also allows the Company to access any third party gas through the Alberta sales distribution network.
The Company took advantage of low equipment costs in the fourth quarter of 2015 with the purchase of approximately 2,000 HP of additional gas injection compression. This equipment is currently being installed and will provide the Company with additional gas injection capacity for up to 15 MMscf/d. With current oil production rates, the Company needs approximately 7.5 MMscf/d of gas injection to achieve a VRR of 100%. As Granite’s recently received EOR approval allows for injection rates above 100% VRR, investing in this infrastructure is a key component to the Company’s 2016 plan, and the long-term development of the EOR scheme. With this infrastructure build out, Granite will be well-positioned to take advantage of potential depressed gas prices to further increase injection, thereby further accelerating re-pressurization of the Bakken reservoir, should the opportunity arise. … [Emphasis added]
Granite receives approval for EOR on Bakken property by Scandinavian Oil & Gas Magazine, February 23, 2016
Granite Oil Corp. has received the approval of the Alberta Energy Regulator (AER) to operate its gas injection enhanced oil recovery (EOR) scheme on its 100%-owned Alberta Bakken property under a consolidated regulatory framework across 23 contiguous sections of land.
This approval is a key milestone for Granite as it provides Granite with additional flexibility to expand and optimize its EOR scheme, a process which forms the backbone of Granite’s operational plan for 2016.