Petrobank first received independent recognition of THAI® reserves at our Kerrobert project for year-end 2010. The Kerrobert THAI® project was operational with all 12 production wells capable of production in September 2011 and has since experienced quarter-over-quarter production growth. However, at the end of 2012, production was not meeting the performance criteria assumed by McDaniel in its year end 2011 report, resulting in a revision of 2P reserves for the project to zero. We anticipate that 1P and 2P reserves will be assignable to the project when sustainable commercial production rates are reached. McDaniel also reduced its estimate of peak production rates, leading to a 36% reduction in 3P reserves.
McDaniel has assigned best estimate contingent resources and EOIIP on our Kerrobert Trend Lands of 20.6 million barrels and 48.8 million barrels, respectively. Including EOIIP associated with the Kerrobert THAI® project, total EOIIP of all the Company's Saskatchewan heavy oil properties was 67.5 million barrels.
Petrobank engaged Sproule to evaluate our Dawson lands in 2012. Based on conventional cold production in our THAI® project area, Sproule assigned 0.7 million barrels, 1.2 million barrels and 1.7 million barrels of 1P, 2P and 3P reserves, respectively. Sproule also provided a resource evaluation of our Bluesky channel and Bluesky/Gething non-channel lands. Based on Sproule's experience with other operators near our Dawson lands, they assigned 58.3 million barrels of best estimate contingent resource and exploitable bitumen initially in place of 436.2 million barrels based on cyclic steam stimulation, significantly higher than the 33.2 million barrels assigned by McDaniel in 2011 when our non-channel lands were not assessed.
Kerrobert THAI® Project, Kerrobert Trend Lands and Kerrobert Conventional Cold Production Initiative
Fourth quarter 2012 production averaged 307 barrels of oil per day ("bopd"), a small increase from Q3 2012 production of 305 bopd and an increase from 41 bopd in the fourth quarter of 2011. January 2013 production was 236 bopd based on field estimates.
At our Kerrobert THAI® project, our operating focus is to continue to reduce costs and to significantly increase air injection. With increased injection, we will generate more heat in the reservoir and therefore mobilize more oil. This process began in the fourth quarter of 2012 and will continue through 2013. We began by increasing air injection on two wells, and we are now increasing air on a full-field basis. As the wells have different operational characteristics, our operating procedure involves evaluating individual well performance to assess increasing air injection rates. Since beginning this process we have increased the field air injection rate to 20% of design capacity and we now have all wells involved in the operating plan.
Early in 2013, we experienced frequent interventions into our KP-12 production well due to a build-up of fines that impacted downhole pump performance. We have recently shut-in this well to evaluate a remediation plan.
We continue to evaluate our Kerrobert Trend Lands, where we have completed three vertical stratigraphic wells and a large 3D seismic program. The stratigraphic wells and 3D seismic data contributed to the increase in the EOIIP assigned by McDaniel to the Kerrobert Trend Lands. We also completed a 4D seismic update at our Kerrobert THAI® project.
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