Southern Pacific has filed its Interim Condensed Consolidated Financial Statements and Management Discussion and Analysis for the three and nine months ended March 31, 2013 on SEDAR at www.sedar.com. Copies are also available on the Company's website at www.shpacific.com.
Southern Pacific is in the process of adding significant production growth throughout fiscal 2013 and 2014. The Company expects to ramp up the STP-McKay volumes through the remainder of this and the next fiscal year, with production expected to approach nominal plant capacity of 12,000 bbl/day in fiscal 2014. This production base, coupled with STP-Senlac, should open up new opportunities for Southern Pacific as the Company utilizes its cash flow to finance continued growth.
STP-McKay Thermal Project
STP-McKay exited the quarter at approximately 1,200 bbl/day. During the month of April, production averaged 1,023 bbl/day and has averaged 1,250 bbl/day for the first seven days of May. STP-McKay reached cumulative bitumen production of over 200,000 bbls since steam-assisted gravity drainage ("SAGD") production ramp-up commenced in October 2012.
The month of April provided some significant steps forward in the ramp-up of the STP-McKay project. An additional well pair was converted to full-time SAGD mode, bringing the total wells on full-time SAGD to six. Operations were focused in April and continue to be focused on increasing the overall operating pressure of these six well pairs by increasing steam injection, which in turn adds more heat and allows steam chamber growth, both vertically and laterally. The increased operating pressure resulted in an initial loss of fluid rate in early April as fluids were redistributed into the reservoir, but the ambient reservoir pressure has now stabilized with the steam chambers and the well pairs have shown positive improvements in their production rates over the last three weeks. Of the remaining six well pairs, another well pair was also converted to full-time SAGD in early May bringing the total to seven in full-time SAGD mode. An additional three well pairs have produced for extended periods in SAGD mode, but the Company has currently elected to return them to circulation in order to improve wellbore conformance. These three well pairs are believed to be close to a full-SAGD conversion and will be tested again over the next several weeks. There are two well pairs that continue to circulate and have not established enough conformance to operate in extended SAGD mode, however, improved conformance has been noted in these pairs as well. The Company has developed guidelines related to controlling temperature and subcool within the wellbores, which are aimed at protecting the wellbore integrity. If a well pair approaches these guidelines, the well pair is returned to circulation for a few weeks after which a SAGD conversion will be attempted again. By repeating this process over the past several months, significant improvements in well pair conformance have been observed and pairs have been fully converted to SAGD, which provides confidence in the successful conversion of the remaining well pairs. The STP-McKay Thermal Project has ample steam capacity available with only approximately 32% of 34,700 bbl/day of steam capacity utilized during the quarter. The central processing facility continues to operate at high levels of reliability, with no significant downtime since the plant was commissioned last summer.
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