Exploration & Production | Oil Sands | Oil Sands Projects | SAGD

Deep Well Confirms SAGD Working in Bluesky Formation

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Deep Well Oil & Gas, Inc. has announced preliminary results of the Sawn Lake Steam Assisted Gravity Drainage (SAGD) Demonstration Project.

For Phase 1 of the SAGD demonstration project, one SAGD well pair was drilled in the fourth quarter of 2013 to a depth of 650 meters and a horizontal length of 780 meters. After the construction of the SAGD facility for steam generation, water handling and oil treating was completed in 2014, steam injection commenced on May 21st, 2014.

Bitumen production commenced on September 16th, 2014. Results to date indicate that the SAGD production process works in this Bluesky formation reservoir. Bitumen sales averaged 221 barrels of bitumen per day, half way through the 3rd thirty day period since the start-up of the SAGD mode production. Over the next several months the SAGD well pair is expected to have increased steam injection and bitumen production as the steam chamber develops.

The objective of this initial pilot well pair was to establish that the SAGD process works in the Bluesky formation reservoir, and results to date support this. We are now focused on achieving commercial rates. We expect to achieve these results in early March 2015 when reservoir modelling indicates that the steam chamber will reach the top of the Bluesky formation sandstone reservoir. Maximum production is anticipated to occur around September 2015 corresponding to the end of the first year of production.

Deep Well is fully committed to best practices in Environmental Stewardship to assure sustainable development of its in-situ heavy oil holdings.

Deep Well and its Canadian subsidiaries, Northern Alberta Oil Ltd. and Deep Well Oil & Gas (Alberta) Ltd., have a 90 per cent working interest in 51 contiguous square miles of oil sands leases, a 100 per cent working interest in 5 contiguous square miles of oil sands leases and a 25 per cent working interest in 12 contiguous square miles in the Sawn Lake heavy oil area in North Central Alberta. The leases cover 17,408 gross hectares (43,015 gross acres).