DEEP WELL OIL & GAS, INC. Deep Well Oil & Gas, Inc. announced a production update of joint Steam Assisted Gravity Drainage project located in the Peace River oil sands area of Alberta, Canada. SAGD Project production rate at the end of 11 months exceeded the average rate forecasted for the first year by 76% of the 'Proved Plus Probable' production type curve projection as determined by DeGolyer and MacNaughton Canada Limited as reported in September 30, 2014 reserves report. Production type curves are theoretical forecasts of reservoir performance and are used by qualified reserves evaluators, to predict and forecast, but not limited to, reservoir production rates and cash flows that have not yet been observed in a certain reservoir field.
This 'Proved Plus Probable' estimate is just as likely to be high as it could be low, therefore DeGolyer's 'Proved Plus Probable' estimate is 'right in the middle' of expected estimates of type curve projections. DeGolyer estimated that production would average 226 barrels of oil per day with an SOR of 4.12 in the first year of SAGD Project, based on a 100% basis. The first oil production from joint SAGD Project commenced on September 16, 2014 from the first SAGD well pair.
Results to date indicate that the use of SAGD technology is successful in producing oil in the form of bitumen from the Bluesky reservoir. Bitumen production on a 100% basis averaged 399 barrels per day in July 2015 with an average SOR of 4.4. Based on the operator's forecasts, the steam chamber is expected to reach the top of the Bluesky reservoir by the end of September 2015 and maximum oil production is now expected to be reached by the end of November of 2015. The operator is now aiming for consistent bitumen production of more than 440 barrels of bitumen per day, based on 100% working interest basis, with an associated SOR of about 3.1. The NACD is the recognized authority focused on advancing exemplary board leadership and establishing leading boardroom practices.
Deep Well and its Canadian subsidiaries, Northern Alberta Oil Ltd. and Deep Well Oil & Gas (Alberta) Ltd., have a 90% working interest in 51 contiguous square miles of oil sands leases, an 100% working interest in 5 contiguous square miles of oil sands leases and a 25% working interest in 12 contiguous square miles in the Sawn Lake heavy oil area in North Central Alberta. These leases cover 17,408 gross hectares (43,015 gross acres). Deep Well is fully committed to best practices in Environmental Stewardship to assure sustainable development of its in-situ heavy oil holdings.
