Air injection & displacement for recovery with oil horizontal (AIDROH) project Approval #11618 Performance presentation

Transcription

1 Air injection & displacement for recovery with oil horizontal (AIDROH) project Approval #11618 Performance presentation ERCB offices Calgary February 2013

2 Advisory This document contains forward-looking information prepared and submitted pursuant to Alberta regulatory requirements and is not intended to be relied upon for the purpose of making investment decisions, including without limitation, to purchase, hold or sell any securities of Cenovus Energy Inc. Additional information regarding Cenovus Energy Inc. is available at 2

3 Strong integrated oil portfolio TSX, NYSE CVE Enterprise value Basic Shares outstanding $30 billion 756 MM 2012F production Oil & NGLs Natural gas 2011 proved & probable reserves 165 Mbbls/d 590 MMcf/d 2.7 BBOE Bitumen Economic contingent resources* Discovered bitumen initially-in-place* Lease rights** 8.2 Bbbls 56 Bbbls 1.5 MM net acres ALBERTA OIL & GAS P&NG rights Refining capacity 6.1 MM net acres 226 Mbbls/d Values are approximate. Forecast production based on guidance dated December 12, Cenovus land and bitumen estimates at December 31, 2011 have been updated to reflect the divestiture of the Boyer natural gas property in northern Alberta. *See advisory. **Includes an additional 0.5 million net acres of exclusive lease rights to lease on our behalf and our assignees behalf. 3

4 AIDROH* Introduction and overview This presentation was prepared in accordance with ERCB Directive 54 - Performance Presentations, Auditing, and Surveillance of In Situ Oil Sands Schemes Subsurface Issues Related to Resource Evaluation Directive 054, Section Surface Operations, Compliance, and Issues Not Related to Resource Evaluation and Recovery Directive 054, Section * Canadian patent CA

5 ERCB Directive 54 Section Subsurface issues related to resource evaluation and recovery

6 Subsurface issues: Table of contents 1. Scheme Background 2. Geology / Geoscience 3. Drilling and Completions 4. Instrumentation 5. Scheme Performance 6. Future Plans 6

7 Scheme background Subsurface subsection 2 AIDROH Approval # Annual performance presentation

8 Location map AIDROH Project Christina Lake Edmonton Cold Lake 73 10W4 73-1W4 Calgary Foster Creek Cold Lake Air Weapons Range 69-10W4 69-1W4 8

9 Application history October 2010 May 2011 ERCB Primary Production scheme application submitted ERCB Approval #11618 granted 9

10 Geological / geoscience Subsurface subsection 2 AIDROH Approval # annual performance presentation

11 Summary of reservoir properties Depth Thickness Average Porosity Average Bitumen Saturation Average Permeability OBIP (Project Area) Oil 60C API Oil Gravity 465 TVD 25-30m 35% 65% 1,350mD 3,302 e 3 m 3 ~35,000 cp ~600 cp

12 Wabiskaw structure map 103/5-10 Post-burn well N 104/5-10 Hz production well Hz 0 60 m 102/5-10 Pre-burn OB well 100/5-10 Injection well 12

13 Wabiskaw stratigraphic cross-section A A WBSK D Valley Fill WBSK B Valley Fill Regional WBSK A MCMR Bottom water A Interbedded sand and shale lenses and CC layers 13 WBSK B VF Depositional Edge

14 Wabiskaw bitumen thickness OBIP under gas cap = 159 e 6 m 3 AIDROH 14

15 Post-burn 103/ W4 Gas Cap Drilled in late m northwest of 102 observation well 44 m of recovered core Currently evaluating core data Heated Zone Unaffected Zone 15

16 Post-burn 103/ W4 Post-burn 103/ W4 11.5m Pre-burn 102/ W4 Original Gas Cap Swept Zone Chemically Altered Zone Thermally Heated Zone Un-affected Zone 16

17 Core porosity and permeability Porosity remains the same at an average 35% total porosity No overall reduction in absolute permeability observed 17

18 Core oil saturation Low remaining residual HC saturation in original gas cap and swept zone 18

19 Core oil analysis 2,000,000 1,800,000 1,600,000 1,400,000 Viscosity (15 C) API Viscosity (cp) 1,200,000 1,000, , , , , API gravity Depth 19

20 104/5-10 horizontal production well N Hz 102/ W4 100/ W4 104/ W4 Drilled in 2011 east of injector well at surface location m of horizontal leg landed 30m north of injector well and ~15m into heated zone 20

21 Drilling and completions Subsurface subsection 3 AIDROH Approval # annual performance presentation

22 Well layout Drilled 103/ W4 post-burn vertical well in September 2011 Drilled 11m northwest of 102/ W4 pre-burn well Successfully cored 44m from top of Wabiskaw to top of McMurray no lost core Extensive core and oil analysis program started in early 2012 Core - routine core analysis, thin section, SEM, XRD Oil API, viscosity, composition Drilled 104/ W4 horizontal producer in September m east-west horizontal section landed 30m north of 100/ W4 injector well and 15m below Wabiskaw gas/bitumen interface Equipped with 20 thermocouples along horizontal length N 103/5-10 Post-burn well 0 60 m 104/5-10 Hz production well Hz 102/5-10 Pre-burn OB well /5-10 Injection well

23 Completion 2012 No recompletions No workovers Requirements under subsection c wellbore schematics are included in the Appendix 23

24 Artificial lift Subsurface subsection 4 AIDROH Approval # annual performance presentation

25 Artificial lift The artificial lift mode is: PCP rotor pump Operating pressure range Casing pressure range TSTM to 300 kpag Fluid levels 50m to 165m TVD Bottomhole temperature operating range 13 o C to 91 o C Lift capacity range m 3 /d 25

26 Artificial lift performance Basically zero down time since startup Flowline temperatures (avg) 16 o C Casing pressure (avg) 215 kpag 26

27 Instrumentation Subsurface subsection 5 AIDROH Approval # annual performance presentation

28 Instrumentation in well 104/ W4/00 is equipped with thermocouples Requirements under subsection a wellbore schematics, 5c and 5d are included in the Appendix 28

29 Scheme performance Subsurface subsection 7 AIDROH Approval # annual performance presentation

30 Oil rate forecast 30

31 Production history 31

32 Thermocouple temp vs. depth 32

33 Thermocouple history Pump slowed down Sales Oil Facility issue Pump slowed down H2S event Csg gas volumes increased 33

34 Affected area cross section 34

35 Heated oil volume Calculated using analytical geometry based method Combustion front heats bitumen by conduction in shape of sphere cap Thermally affected radius ~ 219 m Chemically affected 36,800 m 3 Thermal affected * 431,100 m 3 * Based on horizontal well depth 15m below gas/bitumen interface 35

36 104/ W4 casing gas analysis 36

37 H 2 S event EnCAID influence 37

38 H 2 S event Indicators Sept / W4/0 Thermocouples increase 443 m (gas/bitumen) 211C 214C, 3C rise m (1m into bitumen) 196C 209C, 13C rise m (10 m into bitumen) 99C 126C, 27C rise 104/ W4/0 Hz producer Thermocouples increase TC 1/2/3/4/5/6/7/8/9/10/11/12 no change TC 13/14/17/19 ~1C rise TC 15/16/18/20 ~2C to 3C rise 38

39 Produced oil quality Original oil ~45,000 res conditions (dead) Not expecting significant upgrading 39

40 Key learning's Thermocouple data key to understanding when combustion gas break through is expected Low operating temperatures impacted use of separator to flow bitumen through Casing gas pressures and flows TSTM until impacted by EnCAID combustion gases H 2 S presence 40

41 Future plans Subsurface subsection 8 AIDROH Approval # annual performance presentation

42 Future plans A second horizontal producer is expected to be placed on production by end of Q The well will be equipped with fibre-optic cables for temperature monitoring Incorporate learning's from 104/ W4/0 into completion and producing strategy for second well 42

43 ERCB Dir 53 Section Surface operations, compliance and issues not related to resource evaluation and recovery

44 Surface operations: Table of contents 1. Facility overview / modifications 2. Measurement and reporting 3. Water, water disposal well and landfill waste 4. Environmental issues 5. Compliance statement 6. Non-compliance discussion 7. Future plans 44

45 Facility overview / modifications Surface subsection 1 AIDROH Approval # annual performance presentation

46 Site Survey 46

47 Plant schematic 47

48 Facility performance Separator did not function as expected due to low inlet temperature of produced bitumen, piping restrictions and low initial casing gas flows By-passed until sufficient casing gas flow commenced Casing gas flows through separator starting Aug. 20, 2012 H 2 S analyzer on site that feeds data to SCADA system was undersized Sept 2012 sour gas event illustrated equipment limitations 48

49 Measurement and reporting Surface subsection 2 AIDROH Approval # annual performance presentation

50 Measurement and reporting 50

51 Water, water disposal wells and landfill waste Surface subsection 5 AIDROH Approval # annual performance presentation

52 Water and waste disposal No produced water Produced bitumen volumes typically <2% BS&W No processing occurs on site All produced volumes are trucked out for processing 52

53 Environmental issues Surface subsection 7 AIDROH Approval # annual performance presentation

54 Environmental issues Venting of H 2 S in September, 2012 Self-disclosure to ERCB Details covered in non-compliance discussion section 54

55 Compliance statement Surface subsection 8 AIDROH Approval # annual performance presentation

56 Compliance confirmation One non-compliance event occurred September 2012 H 2 S detected in gas stream at levels in excess of 10 ppm Self disclosure to ERCB on September 18,

57 Noncompliance discussion Surface subsection 9 AIDROH Approval # annual performance presentation

58 104/ W4 self disclosure H 2 S detected in gas stream September 14, 2012 at levels in excess of 10 ppm Self disclosure to ERCB on September 18, 2012 Amend H 2 S on existing well license Obtain < 1t-d sulphur inlet bitumen multi well battery facility license Make necessary modifications to existing oil battery Until well license/obtaining of facility license occurs, operate well at reduced rate to ensure H 2 S concentrations do not exceed 10 ppm 58

59 Future plans Surface subsection 10 AIDROH Approval # annual performance presentation

60 Future Plans Modification of existing oil battery facility to comply with <1t-d sulphur inlet bitumen multi well battery facility license Construction of associated battery facilities for the second AIDROH well 60

61 Appendix

62 Wellbore schematic 62