Suncor Energy Inc (TSE:SU, Mkt cap 60.94B, Div/yield 0.29/3.15, EPS -1.95, Shares 1.66B) has awarded a three-year contract to Wood Group for its cost-saving heavy oil well pad design.
Wood Group said on Tuesday that its standard well pad design reduces Suncor’s well pad costs by at least 50%.
The Scottish-based company has received the first authorization under a recently signed multi-use agreement with Suncor Energy, for work to be completed at its Firebag site in Alberta, Canada, approximately 120 km northeast of Fort McMurray.
Wood Group developed its standard well pad design in response to growing concerns about escalating costs for in-situ heavy oil facilities, especially steam-assisted gravity drainage (SAGD) well pads. It uses the same design-one, build-many approach that Wood Group has applied successfully to other heavy oil and offshore facilities, the company explained.
The design delivers cost savings by eliminating much of the operator’s costs associated with engineering, procurement and project management. The design accommodates pad sizes of up to 12 well pairs and uses a drilling pattern with the production and steam injection wells in two parallel rows, and wells drilled at 10-meter spacing.
Robin Watson, chief executive of Wood Group, said in a statement: “Our standard well pad design provides heavy oil producers the opportunity to lower costs and increase profit margins, and offers a new design solution for heavy oil production.”
Over the life of a SAGD project, approximately two-thirds of all capital spending is on well pads and gathering line infrastructure. Suncor’s well pad facilities costs, which previously ranged from more than C$4m to C$9m per well pair, are now approximately C$2m per well pair using the Wood Group design.
Suncor Energy Inc. (TSE:SU) is a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »
What is Successful Investing? Learn more here>>
Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>
We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>
The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.