Pulse Oil Corp., (“Pulse” or the "Company”) (TSXV: PUL) is pleased
to announce that the Company has recently completed a number of
critical steps to move forward with the Company’s Enhanced Oil
Recovery (“EOR”) project in the Bigoray area of Alberta, Canada.
The Company has agreed to terms and secured a solvent supply, one
of the last remaining commercial project paths before actual
injection can begin. Pulse has also secured an agreement for oil
and gas sales for the EOR project with more details of these
advancements provided below.
EOR Operational
Advancements:
- Pulse
has secured a solvent supply to begin injecting into the first of
two reservoirs (Nisku D) estimated to start in November 2022 with a
large mid-stream company (the “Solvent Supplier”). The contracted
amount of solvent is for the period December 2022 through to March
31, 2023 for up to 6,000 m3 per month of solvent (approximately
38,000 barrels). Going forward after March 31, 2023, Pulse has the
option to lock-in a minimum of 6,000m3/d of solvent supply on an
annual basis or increase the overall volumes to initiate injection
into Pulse’s second reservoir (Nisku E) at that time.
- Pulse
has secured an agreement with a second large mid-stream company to
construct and operate a Lease Automatic Custody Unit (“LACT”) on
Pulse’s behalf. This facility expansion will tie-in the
mid-streamers facilities with Pulse’s existing pipelines to measure
all oil and gas volumes produced from Pulse’s properties at
Bigoray. The project will provide the mechanisms to transfer
custody to the buyer of Pulse’s oil and gas from the Bigoray EOR
project.
- Pulse
has filed the necessary applications with the Alberta Energy
Regulator (AER) to approve of the Bigoray EOR project and injection
well. It is anticipated that approval will be granted in November
2022.
- Pulse
has completed consultation with affected First Nations as part of
the approval to expand our operational area to safely and
efficiently accommodate the extra facility and trucking
requirements associated with the EOR project. The project has
recently been completed and the site is ready for installation of
the remaining facility infrastructure.
- Pulse
has commissioned a third party pump manufacturer to build a fit for
purpose injection skid to satisfy the company’s requirements to
complete the injection of solvent for the EOR project. The pump is
to be delivered in October with an estimated in service date of
November 2022.
Pulse’s CEO Garth Johnson commented; “Our team
is excited to dig into the final phases of initiating this EOR
solvent flood. Pulse was originally created to initiate this
project, and after surviving the past 3 years of global
uncertainty, we managed to clean up our own balance sheet, acquire
facility assets for the EOR at discounted prices, and remained debt
free. We’re now ready to kick this well-proven process off, with
injection scheduled to commence in December 2022.”
EOR Technical Updates
In May of 2019, Pulse released the results of a three-phase
independent viability analysis by one of the world leading
providers of technology for reservoir characterization, drilling,
production and processing to the oil and gas industry.
The purpose of the study was to seek third-party confirmation
that Pulse’s two 100% operated Nisku Pinnacle Reef reservoirs were
viable candidates to initiate a solvent flood EOR scheme, similar
to the fifty surrounding pools where successful solvent floods have
already been initiated. A summary of the results follows:
- The three geo-technical phases of
the EOR study, were the first ever utilising 3-dimensional seismic
data on the Nisku D & E pinnacle reefs.
- The reservoir simulation conducted
as part of the EOR study included over 200 separate computer
iterations of historical production, adjusting the geo-model after
every iteration to ensure the model was as accurate as possible
based on historical production and modern 3-D interpretations,
before beginning the solvent flood forecast.
- The detailed simulation allowed the
team to model the most effective positioning of solvent injectors,
optimum compositions, pressures and rates of injected fluids and
optimum production take-points to maximise ultimate recovery from
these established pools.
- The go-forward simulation under the
EOR program resulted in a peak estimated Nisku D-Pool production
rate of approximately 2,000 barrels of oil/day, with peak
production, including Nisku E production increasing to
approximately 3,000 barrels of oil/d. Although the independent
study was commissioned by Pulse to focus only on the feasibility
and forecast of oil production within Pulse’s Nisku D & E
pinnacle reefs, Pulse’s management team also expects to see similar
amounts of gas production on a BOE basis from gas breakout as oil
flows to the surface. Given recent increases in natural gas prices
in Alberta, the gas could become as important commercially as the
oil recovered at Bigoray.
- This production simulation was
prepared, at Pulse’s request, to assume initiation of the solvent
injection into the two reservoirs was staggered by 12-18 months.
Beginning with the Nisku D Pool, and then following with the Nisku
E Pool allows the Company to preserve working capital and begin
generating cash flow during the initial years of the program.
- Pulse, subject to having sufficient
working capital, can accelerate this schedule to initiate the E
Pool EOR program at any time in conjunction with the D pool. The
simultaneous implementation of both pools results in peak forecast
rates of approximately 5,000 barrels/day.
- Importantly, the estimate for
Discovered Petroleum Initially-In-Place (“DPIIP”) as part of the
newly interpreted geo-model was calculated at 33.5 million barrels
of oil, which is 26% higher than the DPIIP volume calculated by the
Alberta Energy Regulator (“AER”) of 26.5 MM barrels. (1)
- The estimated total oil recovery
factor can be doubled from the currently recovered approximately
35% to at least 70% of PIIP. (1)
- The estimated incremental oil
reserves from the Nisku D and E EOR program could range from 9.28
million barrels to as high as 11.73 million barrels.(2)
(1) The Resource Assessment was prepared in accordance with
National Instrument 51-101 – Standards of Disclosure for Oil and
Gas Activities of the Canadian Securities Administrators ("NI
51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook").
(2) All disclosure of reserves in the statement has been
prepared in accordance with the COGE Handbook.
About Pulse
Pulse is a Canadian company incorporated under
the Business Corporations Act (Alberta) that is primarily focused
on a 100% Working Interest Enhanced Oil Project Located in West
Central Alberta, Canada. The project includes two established Nisku
pinnacle reef reservoirs that have been producing sweet light crude
oil for over 40 years. The Company plans to institute a proven
recovery methodology (NGL solvent injection) to further enhance the
ultimate oil recovery from these two proven pools. With under 10
million barrels of oil recovered to date, and representing
approximately 30% recovery factor from the pools, Pulse is moving
forward to execute the EOR project and unlock significant value for
shareholders. Pulse’s total reclamation liabilities are just $2.46
million which, when compared to many peers in the industry in
Western Canada, are very low.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information contact:
Pulse Oil Corp.
Garth
JohnsonCEO604-306-4421garth@pulseoilcorp.com
Drew
CadenheadPresident604-909-1152drew@pulseoilcorp.com
Barrels of oil equivalent (boe) is calculated
using the conversion factor of 6 mcf (thousand cubic feet) of
natural gas being equivalent to one barrel of oil. Boes may be
misleading, particularly if used in isolation. A boe
conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current
price of crude oil as compared to natural gas is significantly
different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis.
Forward Looking Statements:
This news release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation. All statements, other than statements of historical
fact, included herein are forward-looking information. In this
news release, such statements include but are not limited to
Pulse’s operations and oil and gas resources. There can be no
assurance that such forward-looking information will prove to be
accurate, and actual results and future events could differ
materially from those anticipated in such forward-looking
information.
This forward-looking information reflects
Pulse’s current beliefs and is based on information currently
available to Pulse and on assumptions Pulse believes are
reasonable. These assumptions include, but are not limited to,
conditions facing Pulse at the time of the planned expenditure in
advancing the Bigoray EOR project, conducting operations on time
and on budget and the anticipated reserves, resources, production,
revenue and cash flow anticipated from these operations.
Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Pulse to be
materially different from those expressed or implied by such
forward-looking information. Such risks and other factors may
include, but are not limited to: general business, commodity
prices, economic, competitive, political and social uncertainties;
general capital market conditions and market prices for
securities; consistent production and cash flow from current
operations, the actual results of future operations; competition;
changes in legislation, including environmental legislation,
affecting Pulse; the timing and availability of external financing
on acceptable terms; and loss of key individuals. A description of
additional risk factors that may cause actual results to differ
materially from forward-looking information can be found in
Pulse’s disclosure documents on the SEDAR website at www.sedar.com.
Although Pulse has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. Readers are cautioned that the foregoing list of factors
is not exhaustive. Readers are further cautioned not to place
undue reliance on forward-looking information as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Forward-looking information contained
in this news release is expressly qualified by this cautionary
statement. The forward-looking information contained in this news
release represents the expectations of Pulse as of the date of
this news release and, accordingly, is subject to change after such
date. However, Pulse expressly disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or
otherwise, except as expressly required by applicable securities
law.
Reserves
All production and reserves quantities included
in Pulse’s public filings have been prepared in accordance with
Canadian practices and specifically in accordance with National
Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities. These practices are different from the practices used
to report production and to estimate reserves in reports and other
materials filed with the SEC by United States companies.
Accordingly, information concerning resources, deposits,
production, reserves and any similar information of the Company may
not be comparable with information made public by companies that
report in accordance with United States standards.
Resource Definitions
Resources encompasses all petroleum quantities
that originally existed on or within the earth's crust in naturally
occurring accumulations, including Discovered and Undiscovered
(recoverable and unrecoverable) plus quantities already produced.
"Total Resources" is equivalent to "Total Petroleum Initially
In-Place". Resources are classified in the following
categories:
Total Petroleum Initially In-Place ("TPIIP") is
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.
Discovered Petroleum Initially In-Place
("DPIIP") is 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 DPIIP includes production,
reserves, and Contingent Resources; the remainder is
unrecoverable.
Contingent Resources are those quantities of
petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology
or technology under development but which are not currently
considered to be commercially recoverable due to one or more
contingencies. Economic Contingent Resources (ECR) are those
contingent resources that are currently economically
recoverable.
Undiscovered Petroleum Initially In Place
("UPIIP") is that quantity of petroleum that is estimated, on a
given date, to be contained in accumulations yet to be discovered.
The recoverable portion of UPIIP is referred to as Prospective
Resources and the remainder is unrecoverable.
Prospective Resources are 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.
Unrecoverable is that portion of DPIIP and UPIIP
quantities which is estimated, as of a given date, not to be
recoverable by future development projects. A portion of these
quantities may become recoverable in the future as commercial
circumstances change or technological developments occur; the
remaining portion may never be recovered due to the
physical/chemical constraints represented by subsurface interaction
of fluids and reservoir rocks. Uncertainty Ranges are described by
the Canadian Oil and Gas Evaluation Handbook as low, best, and high
estimates for reserves and resources as follows:
Low Estimate: This is considered to be a
conservative estimate of the quantity that will actually be
recovered. It is likely that the actual remaining quantities
recovered will exceed the low estimate. If probabilistic methods
are used, there should be at least a 90 percent probability (P90)
that the quantities actually recovered will equal or exceed the low
estimate.
Best Estimate: This is considered to be the best
estimate of the quantity that will actually be recovered. It is
equally likely that the actual remaining quantities recovered will
be greater or less than the best estimate. If probabilistic methods
are used, there should be at least a 50 percent probability (P50)
that the quantities actually recovered will equal or exceed the
best estimate.
High Estimate: This is considered to be an
optimistic estimate of the quantity that will actually be
recovered. It is unlikely that the actual remaining quantities
recovered will exceed the high estimate. If probabilistic methods
are used, there should be at least a 10 percent probability (P10)
that the quantities actually recovered will equal or exceed the
high estimate.
Development Unclarified is a project maturity
sub-class of contingent resources that refers to the development
plan evaluation is not complete and there is ongoing activity to
resolve any risks or uncertainties.
Certain resource estimate volumes disclosed
herein are arithmetic sums of multiple estimates of DPIIP or UPIIP,
which statistical principles indicate may be misleading as to
volumes that may actually be recovered. Readers should give
attention to the estimates of individual classes of resources and
appreciate the differing probabilities of recovery associated with
each class as explained under this Resource Definitions
section.
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