Having locked up a dominant land position in both the Bakken and Lower Shaunavon plays in Saskatchewan, Crescent Point Energy Corp. hopes to more than double its reserves with further exploitation and enhanced recovery.

President and Chief Executive Officer Scott Saxberg told the company's annual meeting last week that with its consolidated land holdings and industry-leading experience in the two formations, Crescent Point is well positioned to further exploit two of Western Canada's hottest plays.

"Crescent Point has a dominant position in two of the largest and most economic unconventional resource plays in Western Canada — the Lower Shaunavon and the Bakken. These mainly untapped resource pools provide us with over 5,000 drilling locations and the potential to add over 500 million bbls of reserves, which could potentially double our current (reserves)," Saxberg said.

"We still believe we have the potential to more than double our current proved plus probable reserves over the next three to five years, just through infill drilling, waterflood implementation and production optimization."

At eight wells per section, the company estimates it has an inventory of about 3,800 net drilling locations in the Bakken and 1,500 in the Lower Shaunavon.

In the Bakken, which Saxberg called the "main engine" for the company's future growth, Crescent Point will continue to pursue secondary recovery and tinker with its completion strategy.

Saxberg noted that the company currently operates two waterflood pilot projects in the Bakken field and has received regulatory approval to implement another. With more than 18 months of production data from the first pilot and more recent data from the second, Crescent Point is becoming increasingly confident in the potential for broader application of a waterflood throughout the Bakken resource play.

"We're going to continue to push the technology here. We're continuing to move more towards cement liners versus the Packer's system. We're moving more towards development of the waterflood then just focusing on primary drilling," Saxberg said, adding that initial results indicate that waterflood has the potential to increase recovery factors in the Bakken from about 10% to 30%.

"So in 2010 ... our goals are to really prove up the waterflood further and improve how we actually do the waterflood. We believe it works very well but we want to enhance that as best we can. We also want to enhance the completion technique and fine-tune that."

Saxberg said that by this time next year, Crescent Point will have about six waterflood pilots up and running in the Bakken and that the company will "be in a position to further expand that."

After having drilled more than 1,000 wells in the Bakken, Saxberg said the company's Lower Shaunavon program, where about 200 wells have been punched to date, should benefit from experienced gained and that the learning curve will not be steep.

"This pool is kind of where the Bakken was three years ago. It has the advantage that we have all the technology and knowledge from the Bakken ... we've got a tremendous amount of knowledge and the scale of knowledge that we can transfer over into the Lower Shaunavon," he said.

Saxberg said that because of the Shelter Bay acquisition the company recently increased its 2010 capital budget to $750 million from $625 million, and that about 15% of the total will be directed toward the Lower Shaunavon where 70 net wells are planned and an initial waterflood pilot program is expected to commence.

"We're going to have probably three waterflood pilots running (in the Lower Shaunavon) by the end of the year, before the first quarter of 2011," he said.

Although Alberta's Cardium light oil play has garnered a significant amount of industry attention of late, Saxberg and Crescent Point are not the least bit envious. Instead, he believes his company's strategy of consolidating its position in the two Saskatchewan plays bodes well for the future, especially when the fragmented nature of land holdings in the Cardium and the high cost of land there are factored in.

"If you look back and think of some of the newer plays that are emerging in Alberta and elsewhere and the fight that is happening over those plays and how difficult it is to consolidate (land) in a complete play ... and decide how it's going to be managed going forward, it highlights to me that it's really hard to acquire and obtain large oil accumulations," Saxberg said.


Source: New Technology Magazine