Saccharum Executes Agreement with GreenNABR Research Ltd.
July 04, 2013 at 12:10 PM EDT
Saccharum Executes Agreement with GreenNABR Research Ltd.
Calgary, Alberta CANADA, July 04, 2013 /FSC/ - Saccharum Energy Corp. (SHM - TSX Venture), ("Saccharum") announced today that it has negotiated and executed a technology licensing agreement with GreenNABR Research Ltd. ("GreenNABR"). GreenNABR is a Calgary-based corporation which owns proprietary ultrasound technology which it believes can assist with the recovery of bitumen. Saccharum has, through a previously executed and announced farm-in agreement with Oil Reserve Corp. ("ORI"), access to oil concessions located in the carbonate trend of Northern Alberta which contain significant oil resources that have not as yet been commercially producible. The management of Saccharum and GreenNABR believe production of this resource may benefit from the application of the GreenNABR technology and will undertake a test well to deterimine its applicability.
Known as "green non-aqueous bitumen recovery", GreenNABR's technology is a downhole treatment aimed at mobilizing bitumen in various reservoir types including carbonates, shale, oil shale, and heavy oil formations. Using a patented technique which utilizes a combination of solvent and in situ ultra sonic application, the GreenNABR technology offers Saccharum an opportunity to test not only the conventional potential of the well test and core programs it is committed to complete, but also to simultaneously apply and test the viability of this new technology.
The technology licensing agreement entered into by Saccharum and GreenNABR contemplates that Saccharum will drill a vertical well on the subject lands and deploy the technology for the purpose of its testing and further validation. Saccharum will for this purpose establish a budget for the expenditure of up to $1 million to drill and complete a vertical test well which will, among other things, be used to demonstrate the application of the technology, conduct diffusion testing on the target reservoir, and otherwise conduct production testing where appropriate. In addition, a further budget for the expenditure of up to $100K will be established for completion of mandated lab work and analysis in order to evaluate and provide a technical report on the field results utilizing the technology.
"It is clear to us that the discovery and application of new technologies to oil sands extraction represent the next frontier in the development of this vast resource," stated Johannes Kingma, President of Saccharum, "and we see the combination of the testing program we have committed to with Oil Reserve with the initial testing program of the GreenNABR technology to be a perfect fit. The results to be gained from drilling these wells and testing the new technology will offer significant data on the potential of the large Oil Reserve resources as well as the potential of the GreenNABR technology to significantly impact production in a sustainable and environmentally respectful way."
Drilling Program
Oil Reserve holds oil sands rights from below the top of the Viking formation to the base of the Woodbend Group in 151 generally contiguous sections in the Nixon area where Saccharum has committed to a two well test and core program to be completed on or before October 31, 2013, subject to reasonable surface access, regulatory approval and drilling rig availability. The two wells will be spudded on two separate sections of Oil Reserve land and will drill and core through the Viking formation. By completing this initial well program, Saccharum will earn a 50% interest in the two sections drilled as well as a 50% interest in two additional adjacent or offsetting sections of Farmout Lands, as determined by Saccharum at its sole discretion. In addition to this two well commitment, the agreement also provides Saccharum with a "rolling option" to drill up to eleven additional earn-in wells on any of the remaining ORI lands. In return for completing the entire option well drilling program, Saccharum will earn the right to participate jointly with Oil Reserve in the drilling of a SAGD test well at a mutually agreed location on the Farmout Lands. With the completion of that SAGD test well, Saccharum will earn a 50% interest in all 151 sections of Farmout Lands, which include zones in the Nisku and Grand Rapids formations.
Management of Saccharum anticipates that any reasonable measure of success at these locations will allow it to aggressively develop what may be a significant accumulation of hydrocarbon on the sections and in the area in general.
OIL RESERVE
Oil Reserve is a private Western Canadian oil development company with a land position in the carbonate trend of Northern Alberta. Within the carbonate trend the Company holds 297 sections (8.25 Townships/190,080 acres) in the Peace River area which include the Debolt, Elkton and Pekisko formations. Additionally, Oil Reserve holds 621 sections (17.25 Townships/397,440 acres) of land in the Athabasca area which includes the Grosmont and Nisku formations. For further information, see www.oilreserveinc.com .
The Viking formation in the Nixon area of Alberta is a thick channel sand present on the Farmout Lands. Based on the Report (as defined below), potential reservoir zones on the Farmout Lands average 34 metres of gross thickness, with 32 percent porosity, and 43 percent water saturation. Intervals within the Viking appear to be hydrocarbon charged in many areas of the property based on volumetric calculation, and drill stem test recovery. One metre of heavy oil was tested from 3-9-75-23W4 well and the 16-19-72-18W4 well located on Farmout Lands recovered oil cut mud. The Viking formation depth ranges from 219-310 metres TVD.
Summary of Athabasca area resources on ORI lands
Grosmont Formation
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Gross Mstb
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Resource class Low Best High
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Cumulative production - - -
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Remaining reserves - - -
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Surface loss/shrinkage - - -
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Total commercial - - -
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Contingent resources - - -
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Unrecoverable - - -
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Total sub-commercial - - -
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Total discovered PIIP - - -
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Prospective resources 13,342.0 40,903.0 125,400.0
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Unrecoverable 3,053,069.0 7,757,850.0 19,709,044.0
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Total undiscovered PIIP 3,066,411.0 7,798,753.0 19,834,444.0
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Total PIIP 3,066,411.0 7,798,753.0 19,834,444.0
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WI Mstb
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Resource class Low Best High
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Cumulative production - - -
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Remaining reserves - - -
-------------------------------------------------------------------------
Surface loss/shrinkage - - -
-------------------------------------------------------------------------
Total commercial - - -
-------------------------------------------------------------------------
Contingent resources - - -
-------------------------------------------------------------------------
Unrecoverable - - -
-------------------------------------------------------------------------
Total sub-commercial - - -
-------------------------------------------------------------------------
Total discovered PIIP - - -
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Prospective resources 13,342.0 40,903.0 125,400.0
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Unrecoverable 3,053,069.0 7,757,850.0 19,709,044.0
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Total undiscovered PIIP 3,066,411.0 7,798,753.0 19,834,444.0
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Total PIIP 3,066,411.0 7,798,753.0 19,834,444.0
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Summary of Manning and Seal area resources on ORI lands
Debolt, Elkton and Pekisko Formations
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Gross Mstb
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Resource class Low Best High
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Cumulative production - - -
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Remaining reserves - - -
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Surface loss/shrinkage - - -
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Total commercial - - -
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Contingent resources - - -
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Unrecoverable - - -
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Total sub-commercial - - -
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Total discovered PIIP - - -
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Prospective resources 15,440.0 30,750.0 59,570.0
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Unrecoverable 1,710,062.0 2,789,313.0 4,571,963.0
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Total undiscovered PIIP 1,725,502.0 2,820,063.0 4,631,533.0
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Total PIIP 1,725,502.0 2,820,063.0 4,631,533.0
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WI Mstb
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Resource class Low Best High
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Cumulative production - - -
-------------------------------------------------------------------------
Remaining reserves - - -
-------------------------------------------------------------------------
Surface loss/shrinkage - - -
-------------------------------------------------------------------------
Total commercial - - -
-------------------------------------------------------------------------
Contingent resources - - -
-------------------------------------------------------------------------
Unrecoverable - - -
-------------------------------------------------------------------------
Total sub-commercial - - -
-------------------------------------------------------------------------
Total discovered PIIP - - -
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Prospective resources 15,440.0 30,750.0 59,570.0
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Unrecoverable 1,710,062.0 2,789,313.0 4,571,963.0
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Total undiscovered PIIP 1,725,502.0 2,820,063.0 4,631,533.0
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Total PIIP 1,725,502.0 2,820,063.0 4,631,533.0
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Summary of Athabasca area resources on ORI lands (1)
Nisku, Viking and Grand Rapids Formations
Detailed Summary of Resources on Oil Reserve Inc. Lands (1)
NIXON
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Gross MBbl
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Resource Class Low Expected High
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Cumulative Production - - -
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Remaining Reserves - - -
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Surface Loss/Shrinkage - - -
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Total Commercial - - -
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Contingent Resources - - -
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Unrecoverable - - -
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Total Sub-Commercial - - -
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Total Discovered PIIP - - -
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Prospective Resources 1,828.0 5,493.0 20,456.0
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Grand Rapids 304.0 655.0 1,412.0
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Nisku 1,120.0 4,702.0 19,738.0
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Unrecoverable 2,037,127.0 3,348,787.0 5,554,649.0
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Total Undiscovered PIIP 2,038,955.0 3,354,280.0 5,575,105.0
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Total PIIP 2,038,955.0 3,354,280.0 5,575,105.0
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Viking 1,419,623.0 2,460,916.0 4,265,997.0
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Grand Rapids 4,437.0 8,461.0 16,133.0
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Nisku 233,075.0 671,933.0 1,937,121.0
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Notes: (1) Effective March 31, 2012
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WI MBbl
-------------------------------------------------------------------------
Resource Class Low Expected High
-------------------------------------------------------------------------
Cumulative Production - - -
-------------------------------------------------------------------------
Remaining Reserves - - -
-------------------------------------------------------------------------
Surface Loss/Shrinkage - - -
-------------------------------------------------------------------------
Total Commercial - - -
-------------------------------------------------------------------------
Contingent Resources - - -
-------------------------------------------------------------------------
Unrecoverable - - -
-------------------------------------------------------------------------
Total Sub-Commercial - - -
-------------------------------------------------------------------------
Total Discovered PIIP - - -
-------------------------------------------------------------------------
Prospective Resources 1,828.0 5,493.0 20,456.0
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Grand Rapids 304.0 655.0 1,412.0
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Nisku 1,120.0 4,702.0 19,738.0
-------------------------------------------------------------------------
Unrecoverable 2,037,127.0 3,348,787.0 5,554,649.0
-------------------------------------------------------------------------
Total Undiscovered PIIP 2,038,955.0 3,354,280.0 5,575,105.0
-------------------------------------------------------------------------
Total PIIP 2,038,955.0 3,354,280.0 5,575,105.0
-------------------------------------------------------------------------
Viking 1,419,623.0 2,460,916.0 4,265,997.0
-------------------------------------------------------------------------
Grand Rapids 4,437.0 8,461.0 16,133.0
-------------------------------------------------------------------------
Nisku 233,075.0 671,933.0 1,937,121.0
-------------------------------------------------------------------------
Notes: (1) Effective March 31, 2012
-****-
The foregoing tables are excerpts from NI 51-101 compliant resource
reports dated February 1, 2012, January 15, 2012 and March 31, 2012
respectively (the "Reports") prepared for Oil Reserve by Deloitte and Touche LLP, an independent, qualified reserves evaluator. Copies of the full Reports are available at the Oil Reserve website, www.oilreserveinc.com . Readers are cautioned that resources are not reserves, and there is no certainty that it will be commercially viable to produce any portion of the discovered resources, nor that any portion of the undiscovered resources will be discovered or, if discovered, that it will be commercially viable to produce any portion of the resources. Defined terms have the respective meanings ascribed to such terms in the "Canadian Oil and Gas Evaluation Handbook" prepared jointly by The Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Canadian Institute of Mining, Metallurgy & Petroleum (Petroleum Society) as amended from time to time, including:
"Prospective Resources" means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development.
"Discovered PIIP" or "discovered petroleum initially-in-place" means that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves and contingent resources; the remainder is unrecoverable.
"Total PIIP" or "total petroleum initially-in place" means that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered.
"Undiscovered PIIP" or "undiscovered petroleum initially-in-place" means that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially-in-place is referred to as prospective resources; the remainder is unrecoverable.
In October 2012, Green NABR was contracted by Oil Reserve Inc. to perform their proprietary non aqueous Bitmen Recovery laboratory analysis to demonstrate its potential effectiveness on carbonate samples from the Grosmont Carbonate zone in the Nixon are of Alberta, Canada.
Grosmont core was chosen for the full scale test from the well of 100/01-24-072-17 W4M in the Nixon area of Alberta. Core analysis shows 23% porosity, 2,150 bulk density, 2,791 gran density, 234.02 maximum permeability, 85.03 oil saturation and 7% water saturation in the core.
Three rock samples were selected for the test well and were identified as the "Untreated" sample, the "solvent Only" sample and the "solvent Ultrasonic" sample. The experiment was designed to account for and remove variables in order to assess the action of the ultra sound on the rock and the captive bitumen.
Results from the Rock Analysis
Following the test fluids were extracted from the core samples by a commercial 3rd party laboratory. The original core sample generated 8.5% by mass oil in the extraction. The Solvent Only sample produced 23% of the Original Oil In Place, (OOIP), while solvent and Ultrasound produced 42% of the OOIP, almost twice the recovery of solvent alone.
The results of the limited sample test were positive, demonstrating a potential method to produce bitumen from the Grosmont formation. Further testing is anticipated in the field to better understand and predict the results of the bench scale laboratory tests.
Previously Green NABR field tested their patented equipment and procedures in the Athabasca oil sands with a major oil and gas producing partner. Although the field scale trial was cut short, it did demonstrate that;
1. The equipment was safely and effectively run into a standard oil field wellbore;
2. The equipment functioned as planned, and treated McMurray bitumen in-situ;
3. The Green NABR process reduced viscosity and density of sampled bitumen;
4. Bitumen composition after the treatment was noticeably improved, with reduced heavy ends and increased C9 to C12 content.
Conclusions and Recommendations
The following conclusions can be drawn from the limited field test;
. Bitumen under ultrasound treatment does not behave as a 'pure fluid' with constant composition and properties. Rather, bitumen contains many hydrocarbons which behave independently to changes in environment, including ultrasonic activity.
. Solvent soaking alone changes the composition of the fluids trapped inside the core sample. The components most affected by soaking alone were C8H10 and C9.
. Ultrasound further enhanced the solvent induced compositional change. Two observed results indicate that the influence of ultrasound and solvent increases with longer treatment time. The components most affected by ultrasound and solvent treatment were C10, C11, C14, C15 and C17.
. The fluids which moved out of the oil sands core sample into the fluid surrounding the sample were C8H10, C10, C12, C15, C17, C19 to C23. This process is analogous to production in a field setting.
. The fluids which moved from the surrounding fluid into the rock samplewere C9H12, C5H10, C9, C11, C13, C14, C18. This process may represent reservoir storage or field losses.
. The fluids which appear to be unchanged by the ultrasound were C16, C23 to C30+.
. Ultrasound increased the extraction of oil from the oil sands core sample by almost 50% compared to solvent alone.
. Changes to bitumen viscosity and density cannot be determined from this test due to solvent dilution.
The results of the test were positive, demonstrating a potential method to produce bitumen from the Grosmont oil sample deposit. Further testing was recommended in order to better predict field results and reduce capital risk.
Given the positive results achieved on the Grosmont core, it is anticipated that there is potential to enhance recovery with this method of extraction in conventional oil sands deposits. Testing using the same procedure on other assets with conventional oil sands contents was recommended.
The foregoing statements are excerpts from a report prepared for Oil Reserve Inc. by Green NABR dated December 20, 2012 authored by Laureen C. Little, P. Eng and Bruce Rout, M Sc.
SACCHARUM
Saccharum is a growing junior company with a variety of oil and gas interests in Alberta and is managed by a team which has recently completed the sale of another oil and gas company. Saccharum's participation in the Oil Reserve farm-out agreement represents an opportunity to expand its holdings in northern Alberta and are but part of a growing portfolio of oil and gas exploration and development opportunities being pursued and acquired by the Company.
For further information regarding Saccharum Energy Corp., please refer to the Company's filings available on SEDAR (Http://www.sedar.com) or the following contacts:
Johannes Kingma, President (403) 612-5655
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Source: Saccharum Energy Corp. (TSX-V)
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