The Grande Prairie Corporate Operating Unit (“Grande Prairie”) produces natural gas, NGLs, and crude oil in Central Alberta. The core natural gas producing areas in Grande Prairie include established properties at Mirage and Saddle Hills and more recently developed sour gas properties at Ante Creek. Grande Prairie’s primary crude oil producing property is located at Crooked Creek. Paramount continues to evaluate the reservoir dynamics and develop more efficient exploitation and production practices at Ante Creek and Crooked Creek.
Total sales for Grande Prairie averaged 2,640 Boe/d in 2007, comprised of 11.2 MMcf/d of natural gas and 765 Bbl/d of crude oil and NGLs. Sales volumes decreased in 2007 by 17 percent from 2006 primarily due normal production declines at Mirage and Saddle Hills.
At Crooked Creek, where Good Production Practice (“GPP”) was used on a trial basis from July to October, Paramount’s share of production was in excess of 1,100 Boe/d, however, fourth quarter production was reduced to match water injection rates.
Grande Prairie’s capital expenditures for 2007 totaled $31 million (excluding land), the majority of which was focused on Crooked Creek. Drilling activity in 2007 at Crooked Creek consisted of four (0.7 net) crude oil wells, two (0.4 net) water injection wells, and the re-drilling of one (0.2 net) water well that supports waterflood in the Beaverhill Lake “A” pool. Three of the crude oil wells drilled in 2007 were completed at year end and were capable of gross oil production at an aggregate 1,100 Boe/d, with the fourth well in the process of being completed. Paramount anticipates developing the remaining Beaverhill acreage over the next three winter drilling seasons, and plans to drill three wells in the first quarter of 2008, with production expected in late 2008 or early 2009.
In addition to Grande Prairie’s capital program at Crooked Creek, Paramount undertook development activities during 2007 at Ante Creek and Karr. A total of three (1.7 net) wells were drilled at Ante Creek in 2007 on the hydrothermal dolomite zone of which two wells were completed but not tied in, and one well was cased and awaiting completion. Due to limited infrastructure capabilities and high tie-in costs, 2008 capital investment in Ante Creek will be minimal. Following-up on a deep tight gas discovery in 2006, an additional well was completed at Karr in early 2007 and brought on production in December 2007 at restricted rates.
In 2007, Grande Prairie employed a strategic plan to acquire undeveloped land positions and drill critical, pool defining wells. Approximately 53,000 acres of land were acquired, primarily on the deep, light sweet oil trend at Crooked Creek and in adjacent and surrounding land at Karr.
In 2008, Paramount anticipates focusing on drilling and tie-in activities at Crooked Creek.
