Fracing Saskatchewan: Oil discovery boosts Surge targets. Any baseline aquifer testing? What chemicals are injected? Will the waste be dumped on foodlands? Where will the water come from? Who pays for road damages?

Saskatchewan oil discovery boosts Surge targets, Calgary producer raises its sights for 2014 production by Dan Healing, April 8, 2014, Calgary Herald
A new crude oil discovery and good results from its enhanced oil recovery program have resulted in Surge Energy Inc. already surpassing the year-end target rate it set just three months ago, the company said Tuesday. In a news release, the Calgary producer said it will raise its sights by 300 barrels of oil equivalent per day for a 2014 exit rate of 16,850 boe/d (85 per cent oil and liquids). That’s up from 16,550 boe/d, which was ratcheted upwards in January to reflect a $109-million deal to buy southeast Saskatchewan assets.

Surge said the latest uptick includes the potential payoff of a large new crude oil discovery in the Upper Shaunavon formation in southwest Saskatchewan. “We knew there was a small accumulation there or we felt there was, but we really bought the property for the Lower Shaunavon,” said Paul Colborne, president and chief executive.

“Once we were done our first drilling program, got our waterfloods going in the Lower Shaunavon … we said let’s re-map the Upper Shaunavon. It took the guys two or three months and they went, ‘Oh my gosh, this thing could be upwards of 130-140 million barrels of oil originally in place and maybe 100 drilling locations.’”

A discovery well completed with 21 hydraulically fractured stages is producing 300 bpd of oil, he said. The Upper Shaunavon is about 1,500 metres deep and the Lower Shaunavon is 100 metres below that.

Colborne said each well costs about $1.8 million to drill and complete. The new production can access existing infrastructure and oil batteries but he said the Upper and Lower Shaunavon wells will be drilled separately because each horizontal wellbore gets a 37,000-barrel royalty credit from the Saskatchewan government.

Last week, Surge announced it had struck a deal to buy Calgary junior Longview Oil Corp. for $429 million in shares and assumed debt — if that deal, which requires Longview shareholder approval, goes through, Surge’s exit rate is expected to jump to 21,350 boe/d (84 per cent oil and liquids), it said Tuesday. [Emphasis added]

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