Pengrowth Energy Corporation says it now expects the second phase of its Lindbergh SAGD project to cost significantly less than its previous estimates due to “relentless focus on cost structures.”
The 17,5000 bbl/d project received Environmental Protection and Enhancement Act (EPEA) approval in June.
In May 2015, Pengrowth estimated Lindbergh Phase 2 would have a capital cost of about $850 million, or about $48,600 per flowing barrel. The company reports this figure has steadily decreased, to $750 million in November 2015 and $650 million, or about $37,100 per flowing barrel in July 2016.
Pengrowth started operating a SAGD pilot at Lindbergh in early 2012, which it says achieved faster than expected reservoir response to steam and lower than expected steam-to-oil and diluent blending ratios.
The company felt so much confidence in its Lindbergh asset that its board of directors sanctioned the first commercial 12,500-bbl/d phase before regulatory approval was in hand in 2013. First steam was achieved in December 2014, followed by first oil in early 2015.
In the second quarter of 2016, Lindbergh production averaged 15,532 bbls/d at an average steam-oil ratio of 2.35, compared to average daily production of 15,256 bbl per day in the first quarter.
Lindbergh Phase 1 was completed at a capital cost of $630-million, or $50,400 per flowing barrel.
The execution timeline for Lindbergh Phase 2 has not been released.
In the second quarter of 2016, Pengrowth recorded a net loss of $173 million, compared to a net loss of $134 million in the second quarter of 2015.
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