"The idea that Saskatchewan could replace Alberta as Canada's leading oil and gas producer would have been dismissed as wishful thinking, at best, and outright lunacy, at worst, not that many years ago.
Yet that's exactly what delegates were told at an oil and gas forum in Regina this week..."
"Conventional oil production has also been declining in Alberta for years -- from 750,000 barrels per day in 2000 to 525,000 barrels a day in 2007. Meanwhile, Saskatchewan's oil production has virtually doubled in the last 20 years to 428,000 barrels a day in 2007.
However, Alberta still has the edge in conventional oil reserves, with 1.6 billion barrels in 2006 (based on the most recent National Energy Board estimates), versus 1.2 billion in Saskatchewan, but year by year we're catching up.
But that's not taking into consideration the Bakken light oil play in southeastern Saskatchewan, which could boost the province's recoverable reserves by 2.5 to 10 billion barrels (depending on whether you believe Saskatchewan Energy and Resources or the U.S. Geological Survey).
Nor does the NEB reserves estimate take into account the full impact of enhanced oil recovery (EOR) from CO2 being injected in the Weyburn-Midale oilfields, which could boost recovery rates to more than 15 per cent over the next 25 years..."
A quote from Crescent Point's annual report:
"Over time, our large resource in place pools have outperformed initial expectations. At Crescent Point, we strive to realize increased recovery factors on these pools through infill drilling, water flood optimization and improved technology. The larger the pool, the greater the potential impact on reserves and value."
A quote from Painted Pony Petroleum's April presentation:
"Why Target Oil in the Bakken Zone?
...Eventual downspacing and waterflood expected to significantly increase reserve recovery"
When the amount of original oil in place is measured in billions of barrels an increase of a single percentage in the recovery factor can grow company reserves with tens of millions of barrels. The application of EOR technology will of course increase the production costs, but since water and CO2 flooding are relatively well established recovery methods the additional costs should be moderate.
Crescent Point's proven+probable reserve life index is at the moment 14 years, CEO Saxberg predicts that the reserves can be more than doubled through EOR, which would extend the RLI to three decades. CPG's reserves also have potential upside in the company's undeveloped land base, which grew quite a bit through the Talisman acquisition.
I do intend to increase my position in the Co., but the Fridays closing price of 29 CAD is a bit too expensive in today's oil price environment and also in the light of a possible dividend cut.
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