Petrobank Energy and Resources Ltd. says a global energy consulting firm has recognized the effectiveness of Petrobank's heavy oil extraction technology at the company's Kerrobert project.
The McDaniel & Associates study estimates there are three million barrels of proved reserves and 4.8 million barrels of proved plus probable reserves at Petrobank's Kerrobert project in Saskatchewan, the Calgary-based company said Thursday.
Using conventional oil extraction technology, only 10 per cent of the oil in the reservoir can be economically exploited.
But with Petrobank's Toe-to-Heel Air Injection method, the recovery factor for proved plus probable reserves rises to 26 per cent, according to McDaniel.
In the THAI process, air is injected deep underground to ignite a flame in the reservoir. The heat softens the gooey bitumen enough for it to flow to the surface. Petrobank says the technology virtually eliminates the need for natural gas and water in the extraction process, thereby reducing costs and environmental impacts.
Petrobank said it had anticipated McDaniel's first assessment of its reservoirs to be "conservative," and that over time it expects recovery factors to rise to between 65 per cent and 75 per cent.
"We believe that initial THAI reserve recognition at Kerrobert is a fundamental milestone for the THAI technology and with continued operating success we expect to be able to use THAI as the basis for assigning reserves to all our heavy oil and bitumen resources," the company said.
While the actual reserve bookings are small, CIBC World Markets analyst Andrew Potter said "this is an important third-party validation of the THAI technology."