Nexen Inc. (NXY.TO), which fell 3% yesterday, has recovered more
than 1% today as it announced that it has reached two major
milestones in its plan to fill the Long Lake upgrader - first oil
production from pad 12 and first steam into pad 13.
It said: "We exceeded our expectations for first production from
pad 12 with conversion of wells to SAGD after approximately 70 days
of steam circulation versus our previous experience of
approximately 90 to 120 days. The acceleration was due to new
completion technologies and processes that will now be the standard
for future wells. Currently three of the nine wells are in
production with the remainder expected to be converted over the
next few weeks as we install the electronic submersible pumps.
"Steam injection on pad 13 is also ahead of schedule primarily
as a result of the efficiency of steam utilization on the pad 12
start-up. We are now steaming all nine wells on the pad. First
bitumen production is expected later this year. Production from
pads 12 and 13 is expected to ramp-up to full rates over an 18 to
24 month period.
"Exceeding expectations on these two milestones is a significant
accomplishment. We continue to see real progress at Long Lake,"
said Kevin Reinhart, Nexen's interim President & CEO.
Nexen continued: "The Long Lake project is also progressing in
other areas. Pad 11 continues to ramp-up and is trending towards
the upper end of our expected range of 4,000 to 8,000 bbls/d. On
pads 14, 15 and Kinosis 1A, we are progressing site civil work and
engineering, and expect to start drilling mid-summer. Steam
injection is expected on pads 14 and 15 in the second half of 2013,
with Kinosis 1A following by mid-year 2014."
Nexen has a 65% working interest in both Long Lake and Kinosis
and is the operator. The remaining 35% interest is held by CNOOC