South West Saskatchewan
Rock has focused on building a production platform in South West Saskatchewan for these reasons:
Mantario is the foundation block of Rock’s production base. Currently the pool produces over 3,300 boe per day from 38 vertical and 2 horizontal wells. In 2014 the Company plans to spend another $38 milllion at Mantario to drill 10 vertical and 9 horizontal oil wells, and construct a major production battery and water injection facility. This activity will move the development of the field from primary production (producing oil wells) to secondary development involving a water flood/pressure maintenance scheme. Early in 2015 the Company will begin the injection of chemicals (polymer) to further increase the recovery factor. On primary production, the pool is expected to recover 9-10 percent of the oil-in-place; under water flood it is forecast to recover 15 percent and under polymer flood (tertiary) the recovery factor is expected to be 25 percent. Though the recovery factor, recoverable reserves and value of the pool are increasing significantly, the Company is not forecasting a significant increase in production, but rather a flat production profile. This pool is forecast to produce flat for four to five years, generating over $40 million per year of cash flow, before starting to decline at 15-20 percent per year.
In addition to the development project at the main Mantario pool, Rock has identified 6-10 exploration leads in the area, similar in nature to the main pool, that will be tested in the next 12 months.
Viking: Rock began to explore the Viking play in early 2013 by testing for oil production in 3 vertical wells in the Onward area. With these successful tests the Company assembled over 38 net sections of lands in an area we believed to be oil-charged. Once the land was tied up, the Company drilled its first two horizontal wells (September 2013) to confirm the production capabilities. These two wells came on at an average rate of 40 barrels of oil per day which verified the potential for commercial production. By the end of the first quarter of 2014, the Company has drilled a total of 18 wells (including the first 2) in the play and achieved average initial production rates (30-day IP) of 50 barrels of oil per day, with total production from the Viking exceeding 500 barrels of oil per day. This activity has de-risked 15.5 sections of land, and generated up to 230 new development locations. For the remainder of 2014 Rock will focus on testing the remaining lands to determine the full extent of this resource. In 2015 the Company will consider the development of a significant Viking light oil production platform.
Mannville: Rock entered the Onward area in 2012 through the acquisition of a producing Mannville pool. At the time of the acquisition the pool was producing 200 barrels of oil per day from the Lloydminster Formation. Once acquired, the Company proceeded to optimize the production practices, by drilling new oil producers and re-configuring the injection patterns, and grew production to 325-350 barrels of oil per day. Further optimization is being completed on this pool and we expect production to continue to climb before entering a period of very shallow decline (10 percent per year).
During 2013 Rock was actively exploring for other Mannville targets in this area. A new pool discovery well was drilled in the fourth quarter and is currently producing over 100 barrels of oil per day from the Lloydminster Formation. This discovery will be followed up by three or four development locations in the third quarter. Rock has identified numerous other exploration targets in this area and we expect to test four to six of them in the next 12 months