A Pearl of a project

By Geoff Lee

December 10, 2015 11:13 AM

BlackPearl Resources Inc.will begin preliminary planning in 2016 for the second 6,000 barrels-per-day phase (BPD) of its Onion Lake thermal project.
The first phase, 6,000 BPD project began to produce oil in September using steam-assisted gravity drainage at Onion Lake First Nation about 50-km north of Lloydminster.
The decision to plan ahead, given the low oil price environment at Onion Lake, follows approval this week of a limited $15 million 2016 capital expenditure budget for the Calgary-based company.
The budget will allow BlackPearl to continue to operate its pilot Blackrod SAGD project in northern Alberta, conduct a small conventional oil drilling program and fund maintenance capital in its core areas.
Despite the challenging oil price environment and limited capital investment, BlackPearl expects average daily oil production to increase more than 25 per cent in 2016 from 2015 levels.
“We expect our overall 2016 production to average between 10,000 and 10,500 BPD,”  John Festival, chief executive of BlackPearl, said Monday.
Production gains will come primarily from the continued ramp-up in production from the first phase of the Onion Lake SAGD project.
The growth in thermal production will offset expected declines in the company’s conventional production due to limited re-investment in these properties.
“We have a significant inventory of projects but we will defer development of many of these until oil prices recover and we can achieve better returns for our shareholders,” said Festival.
“During this period we will continue to optimize the Onion Lake thermal project as it represents long life, low cost production.”
The company also renewed its credit facilities with the same $150 million borrowing limit it had in 2015.

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