Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP) (COPL) has noted that a hearing on the application by its affiliate, Southwestern Production Corporation to flare additional gas volumes at its Barron Flats Shannon Unit (BFSU), located in Converse County Wyoming, has been delayed.
Southwestern has made an application to the Wyoming Oil and Gas Conservation Commission (WOGCC) to temporarily flare additional gas at its operated BFSU miscible flood project. The WOGGC hearing on the application was scheduled for September 13, 2022.
COPL said Southwestern has requested a continuance to the scheduled hearing docket in October in response to an objection to the application filed shortly before the scheduled September hearing.
The objector is known to the company as they hold a 0.1% working interest in the BFSU as well as ownership of the surface rights, COPL noted, saying it is Southwestern's preference to have an uncontested hearing. As such, therefore, it is in discussions with the objector regarding their concerns and conditions to withdraw the objection, which the company feels the majority of these can reasonably be met.
In a statement, Arthur Millholland, COPL president & CEO, commented: "While the delay in the hearing is unfortunate, the company's application is based on extensive and sound engineering which we look forward to presenting to the WOGCC in October. Flaring gas is something we do not do lightly as we own the enriched gas flared as it was purchased for the miscible flood. In addition, we are seeing positive responses to our wax treatment program in the field and I look forward to updating the market with results once we see some stability. We also continue to be focused on our 2022 objectives as laid out earlier this year."
COPL said it has previously disclosed the BFSU miscible flood is performing beyond its expectations, which is also outlined in the application. The issues facing the company are unexpected very high pressures on certain producing wells. These high pressures have caused safety issues during workovers, at well-site production facilities and with the current gas gathering system in addition to restricting oil production.
The company said that temporary gas flaring at some or all of these wells will mitigate these issues until a field-wide solution is engineered and implemented.
Gas production from one of these wells has recently been tied directly into the gas plant to reduce the load on the gas gathering system. Two additional wells will also be tied directly into the gas plant after recent receipt of direct right of why consent from the objector. Once completed these actions will mitigate the high-pressure effects on three of the current five wells with the issue, and current flared gas volumes will also be reduced, COPL said.
As the miscible bank continues to move across the field, certain wells will respond as simulated but some are more than likely to respond similarly to the current wells causing the issues at hand. Thus, the company said it requires flexibility to operate with safety being paramount under ongoing 'Good Oilfield Practices.
COPL is an international oil and gas exploration, development and production company actively pursuing opportunities in the United States with operations in Converse County, Wyoming, and in sub-Saharan Africa through its ShoreCan joint venture company in Nigeria, and independently in other countries.
The company's Wyoming operations are one of the most environmentally responsible with minimal gas flaring and methane emissions combined with electricity sourced from a neighbouring wind farm to power production facilities.