Petrobank suffers setback with THAI
Novel technologies for extracting heavy oil and oil sands are more easily promoted than implemented, it turns out. A third-party reserve report conducted by McDaniel and Associates Consultants has cut year-end proven reserves at Petrobank Energy and Resource Ltd.’s THAI Kerrobert project to zero from three million barrels, Dan Healing reports at the Calgary Herald.
In an operation update, Petrobank, which owns 59 per cent of PetroBakken Energy Ltd., said Thursday that early stage production using its experimental toe-to-heel air injection production technique at the Saskatchewan heavy oil property “was less than what our original two demonstration wells were producing in late 2010.”
“This lower estimated production resulted in the proved production profile showing negative net present value and therefore caused the elimination of proved reserves,” the update reads.
The revision is a setback for the THAI technology, Healing writes. It also could affect long-term plans to license the novel extraction technique abroad. As of mid-April last year, Petrobank had eight patents issued or pending in 36 countries for the heavy oil recovery process. At that time, too, the company had signed “technical evaluation agreements” with PDVSA in Venezuela, Petrobras in Brazil and PetroChina Ltd.
Petrobank chief executive John Wright said then that future licensing deals represented a big opportunity for his firm. “There’s no doubt in my mind that the biggest business opportunity we’re going to be able to deliver to our shareholders will be long-term licensing agreements covering assets that we maybe couldn’t touch under conventional business terms,” he told Alberta Oil.
Markets have so far shrugged off the blip. Petrobank stock was up 6 per cent at mid-day today.