BlackPearl gets go-ahead for Mooney, Blackrod heavy oil projects in Canada

Source: BlackPearl Resources

BlackPearl Resources Inc. (TSX:PXX) has received approval from the Energy Resources Conservation Board ("ERCB") to proceed with development of the first phase of its polymer flood at Mooney and that the ERCB has approved BlackPearl's application for the construction and operation of its steam assisted gravity drainage (SAGD) pilot at Blackrod, in the Athabasca Oil Sands. 

At Mooney, engineering and design of the polymer and water handling facilities has been on-going and we plan to immediately proceed to field preparation and construction of these facilities. In addition, half of the 44 currently producing wells will be converted to injectors. Polymer injection is expected to commence during the first quarter of 2011 and we anticipate oil production response six to twelve months after initial injection. 

BlackPearl is also pleased to announce that the Alberta Department of Energy has approved enhanced oil recovery status for a portion of the Mooney field, which will initially reduce the royalty burden on Mooney production volumes as a result of the flood. Initial royalty rates are expected to be approximately 10%. 

At Blackrod, as a result of receiving all necessary regulatory approvals, we are planning to drill the SAGD horizontal well pair within the next 30 days, as well as begin construction of the oil handling facilities and install the previously completed steam generation equipment. BlackPearl anticipates commencement of steam injection at Blackrod before the end of the first quarter of 2011. Initial results of the pilot are expected late in 2011. 

John Festival, president of BlackPearl, commenting on these recent developments, indicated that, "Receiving these approvals represents another milestone in the execution of our development plan for our three core properties. Our goal is to develop oil production in excess of 50,000 barrels per day from these properties and these regulatory approvals allow us to continue with development."

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