CALGARY, ALBERTA--(Marketwire - July 6, 2011) - BlackPearl Resources Inc. ("BlackPearl" or the "Company") (TSX:PXX)(FIRST NORTH:PXXS) is pleased to provide a mid-year operations update on its three core projects.
BlackPearl has commissioned its polymer facilities for phase one of its ASP (alkali, surfactant polymer) flood at Mooney. We have begun injecting soft water into the reservoir and will begin adding polymer and other chemicals during the next two weeks. It is anticipated it will take six to twelve months of injection before we see meaningful increases in oil production. The first phase of the ASP flood included construction of water and chemical handling facilities as well as converting 22 (out of a total of 49 wells) existing oil producing wells into polymer injection wells.
Our Mooney operation suffered delays and shut-in production in May due to forest fires in the area, and most recently wet weather caused some delays with respect to construction and start-up of the polymer project. During the second half of 2011 we plan to drill up to seven wells at Mooney; three vertical stratigraphic wells and four horizontal producers which are needed to complete the injection / production pattern within phase one of the ASP flood.
Blackrod SAGD Project
At our pilot SAGD project at Blackrod in the Athabasca Oil Sands, steam injection commenced in May and is in the initial warm-up phase where steam is injected into both of the horizontal wells. After the warm-up phase (two to four months), the lower well will be converted into a producer to establish the SAGD process.
We are continuing to work on the regulatory application for a 40,000 barrel per day first phase of commercial development at Blackrod. This application is expected to be filed during the first half of 2012. Ultimate production potential for Blackrod is over 70,000 barrels per day.
At Onion Lake, 76 wells have been drilled in the first six months of the year. While spring weather has hampered production operations in the second quarter, all new drills should contribute to third quarter production. We expect to drill a total of 100 – 120 wells at Onion Lake in 2011.
We have not established the timing for SAGD development at Onion Lake; however, we plan to pre-drill some of the horizontal wells before we complete conventional development to reduce the risk of reservoir damage caused by lost circulation from drilling through partially depleted zones.
John Festival, President of BlackPearl, commenting on current operations indicated that, "Operationally, two of our primary objectives for 2011 were to complete construction and commence steam injection at Blackrod and to initiate commercial development of a polymer flood at Mooney. I am very pleased that we have met these objectives and I look forward to positive results from both of these projects over the next several months. Conventional development at Onion Lake is on-going as planned and we have started preparing for thermal development in the area.
Oil production growth has been hampered during the first half of 2011 due to lack of rig availability, wet weather and the forest fires in northern Alberta this spring; however, we still expect to reach our production target of 11,000 barrels per day by the end of the year."
This news release contains certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this document contains forward-looking statements pertaining to the Company's estimated production levels, development plans at Onion Lake, Blackrod and Mooney, and future drilling locations at Onion Lake.
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 be realized. Actual results will differ, and the differences may be material and adverse to the Company and its shareholders.
With respect to forward-looking statements contained in this press release, management has made assumptions regarding future production levels; future oil and natural gas prices; future operating costs; timing and amount of capital expenditures; the ability to obtain financing on acceptable terms; availability of skilled labour and drilling and related equipment; general economic and financial market conditions; continuation of existing tax and regulatory regimes; and the ability to market oil and natural gas successfully to current and new customers. 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 the goals or figures contained in forward-looking statements will not be achieved. These factors include, but are not limited to, risks associated with fluctuations in market prices for crude oil, natural gas and diluent, general economic, market and business conditions, substantial capital requirements, uncertainties inherent in estimating quantities of reserves and resources, extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations from time to time, the need to obtain regulatory approvals on projects before development commences, environmental risks and hazards and the cost of compliance with environmental regulations, aboriginal claims, inherent risks and hazards with operations such as fire, explosion, blowouts, mechanical or pipe failure, cratering, oil spills, vandalism and other dangerous conditions, potential cost overruns, variations in foreign exchange rates, diluent supply shortages, competition for capital, equipment, new leases, pipeline capacity and skilled personnel, uncertainties inherent in the SAGD bitumen recovery process, credit risks associated with counterparties, the failure of the Company or the holder of licences, leases and permits to meet requirements of such licences, leases and permits, reliance on third parties for pipelines and other infrastructure, changes in royalty regimes, failure to accurately estimate abandonment and reclamation costs, inaccurate estimates and assumptions by management, effectiveness of internal controls, the potential lack of available drilling equipment and other restrictions, failure to obtain or keep key personnel, title deficiencies with the Company's assets, geo-political risks, risks that the Company does not have adequate insurance coverage, risk of litigation and risks arising from future acquisition activities.
Further information regarding these risk factors may be found under "Risk Factors" in the Annual Information Form. Readers are cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. Accordingly, readers are cautioned that the actual results achieved will vary from the information provided herein and the variations could be material. Readers are also cautioned that the foregoing list of factors is not exhaustive. Consequently, there is no representation by the Corporation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained in this report are made as of the date hereof, and the Corporation does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
BlackPearl's Certified Advisor on First North is E. Öhman J:or Fondkommission AB.
Company Registration Number: 409596-1
The report for the three months ending June 30, 2011 will be published on August 10, 2011.