The historic Leduc Woodbend field in central Alberta represents a significant stepping stone for the growth of the modern Canadian oil and gas business. However, as with many fields of historical significance, recent developments have been as interesting, and as relevant, as those of 50 years ago. After the original operator Imperial Oil Ltd sold the field to Probe Exploration Ltd. ("Probe"), there was a rapid rise in fortune followed by an equally steep plummet. In early 2000, after less than three years of ownership, Probe was placed into receivership.
The court appointed receiver-manager ("receiver") contracted with a team of engineering professionals to assist with the management of daily operations while a sales process was conducted. However, with declining volumes, a perceived environmental roadblock and a processing system rife with costs and onerous agreements, it was soon apparent that there were few purchasers with the necessary wherewithal or desire to acquire the asset. The receiver therefore turned to their professional team to improve production rates. The ever changing business environment led the team to develop and implement a longer term game plan in addition to the immediate business necessities.
This paper discusses the business, technical and operational philosophies that were employed to yield quantum improvement in the economic operation. This was achieved within a context of stringent regulatory compliance requirements, tight economic constraints and a fifty + year old infrastructure all while simultaneously contending with urban sprawl. These positive results ultimately led to a successful sale of the asset just over three years after Probe was placed into receivership.
In November 1946 Imperial oil discovered the Leduc Woodbend oilfield in central Alberta with the drilling of the 5–22-50–26 W4M oil well. This well, which penetrated the Nisku (D-2) formation, started the modern age of Alberta's petroleum industry. The Leduc Woodbend field, located only 20 miles southwest of the provincial capital of Alberta, Edmonton, continued to be developed over the next 10 years. This ultimately led to a total of 525 wells being drilled into both the Nisku and the Leduc (D-3) horizons, in addition to the construction of central oil treating and gas conservation plants. With original oil in place of 600 mmbbls and 850 bcf of gas, the discovery still represents Alberta's ninth largest oilfield.
In 1997 Probe Exploration Ltd. ("Probe"), a small producer, purchased the majority of the Leduc Woodbend field from Imperial Oil Resources ("Imperial") to become the operator, and on average an 87.5% owner. Probe's purchase tied together their land position to the south of the main Leduc property from which it had built a small production level and included the construction of a sour gas plant at Calmar, Alberta. Once the Imperial properties had been acquired, Probe attempted to exploit the remaining reserves contained in all the formations penetrated by the vast number of wellbores. With high capital costs, relatively low levels of production success in three majorprojects, flat commodity prices and ever increasing debt financing associated with these and other projects, Probe Exploration was placed into receivership on March. 1st, 2000.