Brian Zinchuk is editor and owner of Pipeline Online
You don’t have to go too far back in time to remember when Saturn Oil & Gas was producing around 800 barrels per day. That’s because it was only 16 months ago.
And on Sept. 7, the company announced it had hit 12,000 barrels of oil equivalent per day, what it’s calling a milestone achievement.
That phenomenal growth was built largely on acquisitions, principally the 6,700 boepd “Oxbow acquisition” Saturn picked up from Crescent Point Energy announced in May of last year. It also recently bought Crescent Point’s west central Saskatchewan.
But in so doing, it also picked up a lot of wells that were end of life. And so the company also announced it has reached the midpoint of its 2022 Land Reclamation Program (LRP).
But not all of that growth was with a chequebook. Some has been with the drill bit. And so far, the company has found success in its 2022 drilling program.
Beautiful sunrise at the Savanna 431 drilling rig on the Saturn 10-20-25-17W3 oil well location. This is the first section of land to be drilled on what Saturn says is its transformational Viking Acquisition that closed July 6, 2022. The first well on this section was drilled successfully and is expected to be on line later this month. Due to what the company says is the impressive reservoir quality on the first well Saturn, plans to drill three more wells on this section, which are expected to be online producing in September of 2022. Saturn Oil & Gas
Operations Update
Saturn said in a release that since breakup concluded, the company has drilled and rig released 20 horizontal wells, of which nine have been recently placed onto production, seven are imminent to be put into production and four are currently being completed.
“Saturn is now well into its H2 2022 capital expenditure program, which is budgeted for the drilling of 50 horizontal wells, which comparatively is a greater number of wells than Saturn has drilled in its previous history as an oil and gas producer.” stated Jordan Meyer, Saturn’s vice president engineering. “We are pleased with the operational results to date and our continued production growth and we look forward to executing on a very active drilling program for the remainder of the year.”
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Saturn expects to release a more detailed operational update in mid September when sufficient data is available for IP30 results on the new drilled wells. The successful drilling results to date and the increased production to approximately 12,000 boepd, based on field estimates, are encouraging and the Company remains on track to reach stated guidance of 12,500 boepd average production for Q4 2022.
Land Reclamation Program Update
The LRP was initiated in December 2021 with the goal of returning land previously leased for oil and gas production to landowners in pristine condition. Saturn is currently operating three service rigs full time to the remediation of uneconomic wells, and to date:
- 63 wells have been fully abandoned, cut and capped;
- 11 additional wells have been abandoned downhole, awaiting to be cut and capped;
- 32 flow lines have been abandoned;
- 41 additional flow lines are now discontinued; and
- Over 30 local service providers have been contracted under the LRP.
The company is conducting ongoing activities for surface remediation including Electro-Magnetic Surveys, Gas Migration Testing, Surface Casing Vent Flow Assessment, and civil works towards full land reclamation and return to landowners.
Saturn expects up to 90 additional wells to be fully abandoned, cut and capped for the remainder of the year along with 50 additional flow lines to be abandoned.
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The LRP is an important program towards the environmental remediation of legacy operational areas and offers economic support to local business and indigenous communities, the company said. Remediation activities also provide valuable salvaged wellheads, downhole equipment, steel tubing and other materials for reuse which lowers Saturn’s ongoing operating and drilling costs. The progress of the LRP contributes to the elimination of certain abandonment and reclamation obligations (ARO), improving balance sheet strength, reducing company liabilities. Reducing ARO further contributes to increasing the net present value of future net revenue as determined by independent reserves evaluation of the company’s crude oil and natural gas assets.
First Nations Partners and Funding of the Land Reclamation Program
The majority of Saturn’s LRP activities are funded through $12.6 million awarded under the Accelerated Site Closure Program (ASCP) from the Saskatchewan provincial and the Canadian federal governments. Saturn has engaged the Onion Lake and Whitebear First Nations and through the employment of eligible indigenous service companies and has been approved for $1.5 million through the Indigenous Business Credit Pool (IBCP) and the First Nations Stewardship Fund (FNSF).
“I want to congratulate and thank the entire Saturn team for managing the tremendous growth the Company has undergone in the past 18 months. Reaching the important milestone of 12,000 boepd and over 5,000 per cent production growth was only possible with the commitment and hard work of our talented team of industry professionals,” said John Jeffrey, Saturn’s chief executive.
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