Enhanced Oil Recovery
Penn West believes in the potential to gain new, long-life reserves and production by maximizing recoveries from known resources of large-scale, mature conventional light-oil pools. Beginning with a series of transactions in the late 90s, Penn West now holds major working interests in six of western Canada's 15 historical conventional light-oil fields, including the largest three.
Penn West intends to create value from these maturing pools through a combination of full development and optimization of secondary recovery (waterflood) schemes plus enhanced oil recovery (EOR) using CO2 as the miscible agent. Some pools could be amenable to absolute growth in daily production, while offsetting the annual production decline, and could extend the reserve life of other pools as they approach their conventional economic limits.
Alongside its growing interests in long-life, light-oil fields, Penn West has actively worked to develop expertise in EOR techniques. The merger with Petrofund in 2006 provided working interests in the Weyburn field, Canada's largest commercial CO2 flood, and increased working interests in the Midale, Swan Hills Units and other Pembina Cardium units and fields.
In addition to enhanced oil recovery, CO2 floods present the environmental opportunity of permanently storing or "sequestering" greenhouse gases that would otherwise be emitted into the atmosphere. Penn West currently believes that CO2 injected into commercial EOR projects would most likely be captured from the emissions stream of industrial plants, purified, compressed and shipped by pipeline for injection into EOR projects. As a result, Penn West believes it is well positioned to mitigate its risk against potential greenhouse gas emission legislation while creating economic value for its unitholders.
