Pulse Oil Corp. announces Phase 1 of the Bigoray Enhanced Oil Recovery project is underway + new well reactivations targeting light oil

CALGARY, March 26, 2018 /CNW/ – Pulse Oil Corp. (“Pulse” or the “Company”) (TSX-V: PUL and PUL.WT) reports today that Pulse has initiated Phase 1 of the Bigoray Nisku Pinnacle Reef Enhanced Oil Recovery (“EOR”) project in the Bigoray area of Alberta (“Bigoray”).

As previously announced on January 9, 2018, and as summarized below, Sproule Associates Limited (“Sproule”), an independent qualified reserves evaluator, completed an independent resource assessment that includes the Bigoray EOR project potential only, and is in addition to the previously disclosed baseline independently assessed reserves in the Company’s core areas at Bigoray and Queenstown.

Sproule assessed a best estimate Discovered Petroleum Initially in-Place (PIIP) of 23.292 million barrels of oil (“boe”) within Pulse’s 100% controlled Nisku D and Nisku E Pools, which Pulse views as conservative, given the Alberta Regulator lists PIIP as 26.51 million boe’s.

The Resource Assessment was prepared in accordance with National Instrument 51-101 –Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”).

For more information on the Sproule independent resource assessment, please see “Independent Resource Assessment Details” below.

Pulse also announces the appointment of a Bigoray EOR Project Manager, Bill Sawchuk, a Professional Petroleum Engineer and an EOR expert to oversee all technical and planning aspects of the EOR program. With over 20 years of experience as a senior engineering manager and a technical expert in reservoir engineering and enhanced oil recovery methods. Bill has previously served as an Exploitation Engineer for Anderson Exploration Ltd. and Devon Canada Corporation and most recently, as Manager of Engineering for ARC Resources Ltd. where he led teams to optimize production and implement valuable Enhanced Oil Recovery projects.

Pulse is excited that initial critical facility aspects of the Bigoray EOR project are now underway, using working capital on hand in preparation for the EOR Injection Phase to be implemented in 2018 as planned.

Phase 1 of the EOR project (“Phase 1”), which includes re-activation of existing injection facilities, will also allow Pulse to cost-effectively reactivate up to 3 current shut-in oil producers to add approximately 400 BOE/d (100% working interest) of new light oil and gas production prior to the EOR project taking place.

Drew Cadenhead, President and COO of Pulse Oil, commented, “We are eagerly awaiting the Bigoray EOR project to be fully underway later this year and the start of Phase 1 is a very low-cost starting point; it’s really exciting for everyone involved.  This critical facility work not only marks the start of the EOR project for us, it allows us to get additional shut-in production re-activated in the near-term while we prepare for the water injection phase of the project in 2018. This interim production boost will provide additional revenues which will be reinvested in the Bigoray EOR program later this year as planned.”  

Independent Resource Assessment Details:

The Sproule Independent Resource Assessment provides estimates categorized as “high”, “best” and “low” for contingent resources associated with the Bigoray EOR project on the two pools, with the unrisked high estimate being 8.07 million boe (92.6% Oil), a best estimate of 6.136 million boe (91.3% Oil) and a low estimate of 3.668 million boe (89.1% Oil).

Additionally, the Resource Assessment prepared by Sproule calculated risked contingent resources where the risked assessment assigned a 77% chance of Pulse proceeding with the EOR project (see Table 2 below) and resulting in a best estimate of risked contingent resources net to Pulse of 4.694 million boe (91.2% Oil).

Drew Cadenhead, President and COO of Pulse Oil, commented, “The Sproule Resource Assessment is a positive independent commercial confirmation for our Bigoray Nisku Enhanced Oil Recovery project. Although this assessment used a more conservative approach to Petroleum Initially in-Place (“PIIP”) compared with the PIIP estimates of the Alberta Energy Regulator, we are excited to see that even this more conservative approach resulted in a strong endorsement for the project. With an independent un-risked high case upside estimated at over 8 million boe’s of contingent resources (92% oil), the opportunity to move forward with our EOR project to bring on stream substantial cashflow while targeting to recover those types of oil volumes without drilling a well, creates a substantial opportunity to enhance value for Pulse and our shareholders.”

The Resource Assessment focussed exclusively on two Nisku pools only in the Bigoray area, and included just 2,720 acres of Pulse’s 44,720 acre core area holdings which includes 14,000 acres at Bigoray alone. Future evaluations may be done on Pulse’s Mannville, Cardium and Pekisko formations that are thought to also provide significant growth opportunities for the Company as well as additional Nisku assets/pools held within Pulse’s existing holdings.

Mr. Cadenhead further added, “As part of the Resource Assessment, the evaluator assessed a total risk of 77% that the project would proceed, citing economic factors and/or timing of development as one of the only risks associated with the project. All technical risks such as evaluation drilling, regulatory approvals, technology, legal factors, infrastructure and markets, political factors and social licence were all assigned 100% chance of commerciality. Our goal is to make this project happen in 2018 and with the oil prices holding firmly above US$60 WTI pricing, the economics of this EOR project and return for shareholders continue to look more and more attractive alongside improving oil prices.”   

The Resource Assessment is based on the results from seventeen wells and, where available, core data. Where core was not available, the assessment considered log data.

Contingent Resource volumes for these discovered resources have been classified as ‘development unclarified’ with Sproule assessing that there is a high probability of the Bigoray EOR project becoming a commercial development. Pulse will continue to complete project planning associated with the project and move forward with its execution plans in 2018.

Summary table (Table 1) from the Contingent Resource Assessment of Pulse’s 100% owned Bigoray Nisku EOR Project are reproduced below.

Table 2:

Significant positive factors relevant to the estimate of Pulse’s contingent resources from the Bigoray EOR project include success of miscible flood development in nearby analogous Nisku reservoirs, a discovered thick oil column providing volumes for the deployment of enhanced oil recovery through a miscible flood and a nearby infrastructure allowing for access to market. Significant negative factors relevant to the estimate of Pulse’s contingent resources from the Bigoray EOR project include uncertainty to how the previously fully waterflooded pools will respond to a miscible flood, economic viability uncertainty, as project capital and operating costs are unclear and areal uncertainties in the estimation of PIIP.

About Pulse Oil Corp.

Pulse is a Canadian company incorporated Under the Business Corporations Act (Alberta) and has plans to become a leading oil and gas company. Pulse has recently completed four transactions to consolidate its interests in the Bigoray area of Alberta, resulting in 100% control of Pulse’s Bigoray operations that include two Nisku oil Pinnacle Reefs. Pulse is moving forward to grow production and execute an Enhanced Oil Recovery project to unlock significant value for shareholders through control of approximately 65 net sections of land across the Mannville, Cardium, Pekisko/Shunda and Nisku trends in Western Canada. Pulse will focus on acquiring affordable, small to medium sized proven oil and gas assets with significant upside. The Company plans to achieve further growth through low-risk, technically diligent drilling, infrastructure ownership and reserve growth utilizing proven enhanced oil recovery techniques and implementation of technology.