Final Preparation Underway for Ash Creek Oil Production
- All mechanical equipment is installed.
- Tie-in of electrical and instrumentation components of the facilities are being completed.
- Power supply to the field and facilities is in the process of being installed.
- Commissioning of the facilities is expected to commence next week.
- Approval for the re-entry of other Ash Creek wells is to be sought.
- Preparations for reservoir computer modelling of the Ash Creek.
Update
Elk Petroleum Ltd (ASX Code: ELK) today announced the last mechanical component required for production to commence at its 100% owned Ash Creek oil and gas project has been received. The final step to commence production from the oil field, connection of power to the field, should be completed by the end of next week.
Production from the re-development of the field is expected to be ultimately in excess of 4.5 million barrels with the implementation of enhanced oil recovery (EOR) technology. Early production from a limited number of re-entered wells is aimed at achieving 120 barrels of oil per day (BOPD) in the first half of 2011.
The water re-injection facility for the first phase of the Ash Creek production facilities was delivered to the field on the 3 January 2011 (see image contained in ASX announcement).
Delivery of the building containing the injection pump, filters, controls and switchgear was delayed for several days by weather which ultimately resulted in further delays coupled with Christmas and the New Year. Once the building was delivered, all mechanical aspects of the production facilities were completed and the tie-in of the electrical and instrument components is being completed.
Commissioning of the facilities is now awaiting the connection of power to the field. This is proceeding and is expected to be completed next week, weather permitting. It involves running approximately 1.5 km of power lines and poles from the existing power distribution system to the production facilities and the two producing wells (Trusler #1 and Trusler #8). Once power is available in the field, the interface to the wells and the facilities will be made and production can commence at Ash Creek.
The preliminary clearances prior to the submission of an application for a permit to drill (APD) necessary for re-entry of an abandoned well, has been obtained for Trusler #4 well. The APD for Trusler #4 is to be submitted to the Wyoming Oil & Gas Conservation Commission (WOGCC) for approval to enable its re-entry once production is established from Trusler #1 and #8..
Elk has collated all the available Ash Creek geological and production data with the view to having a reservoir model prepared to assist with future development plans and ultimately chemical flood program.
Ash Creek Background
The Ash Creek oil field is located in the northern Powder River Basin on the Wyoming/Montana state line and was discovered in 1952.
Two sandstone reservoirs in the Upper Cretaceous age Shannon Sandstone Member produced 35 degree API Gravity oil from an average depth of 4800 feet. The structural trapping mechanism is a south plunging faulted nose or anticline. The field was completely plugged and abandoned in 1998. Peak oil production was almost 2000 barrels per day (BOPD) and cumulative production from the entire field has been just over 6 million barrels of oil from a maximum number of 25 production wells. After 1998, all of the oil and gas leases within the field expired.
Elk’s field re-development plans for Ash Creek, the potential oil volumes being targeted by this program, and forward plans were provided to shareholders and the market in an ASX release dated 15th April 2010. Total recoverable oil targeted by the full re-development and chemical flood program is over 4.5 million barrels.
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