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Nexen Provides Long Lake Project Update With the completion of the turnaround at Long Lake, steam reliability has improved significantly and steam rates are at an all time high of over 105,000 bbls/d and increasing. As a result, the company is injecting more steam into more wells than ever before with 57 well pairs now on production and steam circulating in an additional 19 pairs. These circulating wells will be converted to production over the next few months.The reservoir is responding to consistent steaming and bitumen production levels are increasing. Prior to the turnaround, which was completed late last year, Nexen was only providing meaningful steam to about one third of its 91 wells. These wells are providing the majority of the company’s bitumen production, which averaged 13,600 bbls/d (gross) in the fourth quarter. The remaining wells have been cold for about a year and need to go through the circulation and ramp up cycle. Nexen is currently producing approximately 18,000 bbls/d (gross) at an all-in steam-to-oil ratio (SOR) of approximately 6.0. This SOR includes steam to the wells that are in the steam circulation stage and not yet producing bitumen, and wells early in their ramp up cycle. As circulating wells start producing, Nexen expects to see an increase in bitumen production rates with a corresponding decrease in SOR. The SOR of its producing wells is approximately 5.0, and includes well pairs recently converted to production that are in the early stages of ramp up. Nexen continues to expect a long term SOR of 3.0 over the life of the project. "Post turnaround, we have experienced our three best consecutive months of steaming and bitumen production, and we are building on this," said Marvin Romanow, Nexen's President and Chief Executive Officer. "Now that we are in a position to provide consistent steam to the reservoir, we are focusing on optimizing steam injection and individual well performance. To advance well productivity, we have converted about 40 percent of our wells from gas lift to electric submersible pumping and expect to have about 80 percent converted by year end. This offers more flexibility to optimize steam injection and grow bitumen production." Nexen has achieved a number of major milestones at Long Lake over the past year. The facility is running as designed. The gasification process is working, creating a low cost fuel source which reduces the need to purchase natural gas for operations. Post turnaround, the upgrader has processed approximately 90 percent of bitumen feedstock into the highest quality synthetic crude oil in North America. Nexen anticipates ramping up to full rates and generating a significant margin advantage over its peers, even at current gas prices. |
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