Through the 1970s and 1980s, several thermal pilots were conducted on the bitumen deposits of the Grosmont formation, including Unocal’s Buffalo Creek. Oil rates were comparable to the thermal vertical well tests in the McMurray formation, but a combination of low oil prices, poor bitumen differentials, and relatively high capital and operating costs resulted in the projects being decommissioned.
Through the remainder of the 1980s and 1990s, there was little interest in the Grosmont formation. Everyone was focused on the sands near Fort McMurray, Alberta, where infrastructure existed and the economics made more sense. But since then, horizontal well technology has made previously uneconomical reservoirs commercially available, and much experience has been gained in bitumen production. Interest in the Grosmont has been renewed.
Since late 2010, a pilot operation testing SAGD and cyclic steam has been operating with encouraging results. Cavalier has lands in Saleski near a joint venture commercial pilot. We are watching closely for the results.