CALGARY, Oct. 25 /CNW/ - Terrex Energy Inc. (TSX-V - TER) ("Terrex") announces its plans to commence Phase I field operations of its first Enhanced Oil Recovery (EOR) project at Strathmore, subject to final regulatory approval.
"Terrex offers a unique, early entry opportunity into what is essentially a new, high potential, oil resource play." said Kim Davies, President and CEO. "The application of enhanced recovery technologies has the potential to really revive many mature oil reservoirs in Western Canada. These projects require technical specialization, substantial upfront capital and planning, but offer significant long life reserve additions without exploration risk. Oil pricing is strong, technology - primarily from the United States - is well developed and improving, and we have assembled a strong technical team" continued Ms. Davies.
The 100% owned Strathmore property, located southeast of Calgary, contained approximately 20 million barrels of Original Oil in Place (OOIP) and has produced nearly 5 million barrels to date. Fluid compatibility tests, core flood analysis and extensive reservoir simulation work indicate that substantial amounts of additional oil can be recovered by means of a properly designed and implemented EOR program.
Terrex has designed a customized chemical flood for the Strathmore property. Implementation is subject to regulatory approval, which Terrex anticipates to receive in the next few months, as well as final equipment procurement. "To date, a significant amount of work has been directed at re-activating well bores and pipelines, as well as injector well conversions necessary for the EOR project " Ms. Davies said. "This mature pool will be developed in several phases, with production expected to show initial results, possibly as soon as three to four months after initiation of chemical injection in each phase. The utilization of existing well bores and pipelines for the majority of the operations means lower capital costs and reduced environmental impact compared to greenfield projects" added Ms. Davies.
Terrex's Strathmore property contains light oil, which has seen little application of chemical floods in Canada, although this process is well developed in the United States and elsewhere. Chemical floods have increased worldwide historical recoveries on average by 14% to 15% of OOIP, a rate that is increasing with experience. The use of reservoir specific technologies is key to achieving optimal results.
Terrex has identified a significant number of additional projects attractive for EOR. Discussions have been initiated with several parties for opportunities that could lead to acquisitions or joint venture arrangements. Ideally, in addition to EOR potential, these projects would also offer Improved Oil Recovery (IOR) opportunities, such as horizontal well drilling, water flooding and other optimization processes
Terrex's long-term objectives are to grow its reserves to more than 50 million barrels in the next five years, and production to 8,000 barrels of oil per day over the same period.
Terrex Energy Inc. is an oil and gas company based in Calgary, Alberta, engaged in the exploration, development and production of petroleum and natural gas in the Western Canadian Sedimentary Basin. Terrex shares are listed and trade on the TSX Venture Exchange under the trading symbol TER and on the Frankfurt Exchange (TRX/WKN: 763600).
Neither the TSV Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. In particular, this press release contains forward-looking statements pertaining to the amount of oil recoverable from the Strathmore property; Terrex receiving regulatory approval in respect to the implementation o the chemical flood at the Strathmore property; anticipated production in respect to the Strathmore property and the timing thereof; the impact of utilizing existing well bores and pipelines on capital costs and environmental impact; the recovery rates in respect to chemical floods; and Terrex's plans to grow reserves to more than 50 million barrels and production to 8,000 barrels of oil per day over the next five year. Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur.
There can be no assurance that the plans, intentions or expectations upon which forward looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Terrex and its shareholders. Forward-looking statements are based on Terrex's current beliefs as well as assumptions made by, and information currently available to, Terrex concerning business prospects, strategies, and market conditions. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. The forward-looking statements contained in this press release are made as of the date hereof and Terrex does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
For further information:
Contact Information:
Kim Davies, President & CEO, or Norm Knecht, VP Finance & CFO, at (403) 264-4430, or visit Terrex's website at terrexenergy.ca for the latest news
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