Successful implementation of MEG Energy’s eMSAGP production enhancement system is now going to be further applied at the company’s Christina Lake oilsands project starting this year to the tune of a 20,000 bbl/d production increase, the company announced Wednesday.
About 55 percent of MEG’s $590 million 2017 capital budget will be directed to eMSAGP growth. The full production increase is expected in early 2019, with 80 percent of the associated $400 million capital spend to come this year. Volumes are expected to start coming online in the second half of 2017.
eMSAGP involves non-condensable gas co-injection, infill well drilling, new well pairs and facility debottlenecking, which increases production as well as reducing costs and greenhouse gas emissions.
"To date, we have applied eMSAGP to about 25 percent of our production, which has increased volumes using less steam and cut the steam-oil ratio on those wells by half," MEG CEO Bill McCaffrey said in a statement.
"This phase of eMSAGP growth offers some of the highest economic returns available to the company today…When fully implemented, this growth is anticipated to bring MEG's total production to approximately 100,000 bbls/d, significantly improving the sustainability of the business by driving cash costs down by as much as $4-5/bbl."
The eMSAGP growth project has a capital cost of $20,000 per flowing barrel.
MEG says that 35 percent of its 2017 capital spend will go to sustaining and turnaround costs, and the remainder towards supporting marketing, corporate and other initiatives including $70 million for an eMVAPEX pilot.
“Financial resources available to the corporation to fund its 2017 capital program include net proceeds from a $357 million equity issuance, internally generated cash flow, and cash on hand,” the company says.