Canada gets its first subsea tieback

Subsea installation and commissioning began in early June 2009. Modifications to theSea Rose FPSO to accommodate future production from the satellite field were carried out in 2009 during the vessel’s planned major maintenance turnaround in July and August and development drilling resumed that November.

Tieback of the North Amethyst field will represent the first satellite expansion to the White Rose project and holds an estimated 90 MMbbl of reserves (28.2 proved, 41.8 probable and 20 possible as of 4Q 2008). The protective glory holes were dredged for the project’s subsea structures in 2007; and fabrication of major components including subsea flowlines, an umbilical, manifolds, and subsea wellheads and controls commenced in 2008.

On the second North Amethyst producing well, G-25 3, Husky reportedly installed the second longest string of Inflow Control Device (ICD) screens in the world for this configuration. The ICD screens help the oil flow into the well with even pressure along its length to maximize the amount of oil produced throughout the life of the well. Husky is the first company on the East Coast to use these ICDs.

With G-25 3 finished, the team moved onto its most complex well. E-18 10 is an 18,045-ft long pilot well. According to the Schlumberger directional difficulty index, it is a challenging well. E-18 10 has a three-zone intelligent completion design.

The complex design will allow Husky to reach the West White Rose satellite field from existing infrastructure in the Central Drill Center, resulting in significant cost savings. First oil from North Amethyst was achieved on May 31, 2010, and is expected from West White Rose in 2011.

Husky operates White Rose, holding a 72.5% working interest in the main White Rose field and a 68.9% interest in the satellites, which include North Amethyst and West White Rose. Suncor Energy holds 27.5% in the core White Rose field and 26.1% in the satellite fields. The government of Newfoundland & Labrador, through Nalcor Energy --- Oil and Gas, holds 5% working interest in the satellite fields

Husky Energy increased its 2010 capex and production guidance to $3.1 billion, an increase of 20% over 2009, and its offshore plans focused on development at North Amethyst.

White Rose field development

White Rose is 350 km (217 mi) east of Newfoundland, approximately 50 km (31 mi) from both the Terra Nova and Hibernia fields Total capital costs were about $2.35 billion.

The area has oil and gas in Avalon formation sandstones deposited in early Cretaceous along a north-south trending shoreline parallel to the eastern margin of the Jeanne d’Arc basin. The first three wells – N-22, J-49, and L-61 – were drilled between 1984 and 1986. White Rose E-09 drilled in 1987-1988, 90 m (295 ft) of net oil pay to the South Avalon oil reservoir. In 1999 and 2000, three additional delineation wells were drilled plus a stepout.

The field has been developed from three or four drill centers on the seafloor, with production and water and gas injection wells located at each center. These drill centers are in excavated glory holes that lie below the seabed to protect the wells from iceberg scour.

FPSO

The drill centers connect with flexible flowlines and risers to a ship-shaped FPSO, theSea Rose. The FPSO’s turret is allows it to disconnect from the subsea centers and move in the event of an emergency. This FPSO has contains topside processing units, accommodations, and the turret.

In April 2002 Husky awarded Samsung Heavy Industries of South Korea the contract to build the FPSO hull. The design is derived from the proven purpose-builtGrand Banks shuttle tanker design and features an ice-strengthened double hull. It has dual conventional propulsion systems and two high efficiency rudders.

SBM IMODCO won the contract for the turret and mooring system. The contract scope included the engineering, procurement, and construction of a disconnectable turret. The mooring system connects the turret to the seabed and allows the FPSO to weathervane around the turret while connected.

The contract for the engineering, procurement, construction, and installation of topsides was awarded to Aker Maritime Kiewit Contractors.

In 2003 and 2006, exploration drilling in and around the White Rose field led to the discovery of three additional oil pools: North Amethyst, West White Rose, and the South White Rose Extension.

In November 2009, Husky filed an amended development plan with the Canada-Newfoundland and Labrador Offshore Petroleum Board (“C-NLOPB”) for a two well pilot scheme at the West White Rose field. The proposed staged development plan for West White Rose would initially start with one production well and one water injection well drilled from the existing central drill centre at the main White Rose field. It is expected that this well pair would provide data pertinent to the next phase of the West White Rose development. Subject to receipt of the West White Rose development plan amendment approval, first oil could come in early 2011.

Husky says North Amethyst and White Rose are not the end of the story. Husky says it can increase resource recovery from the White Rose to more than the 30 to 35% level under the current development scheme. In addition, there may be production from other reservoir zones such as the Hibernia formation. Husky also is looking at alternatives to produce the 2 tcf of natural gas in White Rose alone.

Husky has extended the agreement for theHenry Goodrich offshore drilling rig. This will enable Husky to continue the development of White Rose and adjacent oil fields through January 2013.

Analysis of results from the North Amethyst E-17 exploration well that was drilled in 2008 to the deeper Hibernia formation revealed 55 m (180 ft) of net oil-bearing reservoir. The resources of the Hibernia formation will be further assessed by reservoir studies and future drilling at both the North Amethyst and White Rose fields.

Husky continues to evaluate the results of its recently acquired 2,150 sq km (830 sq mi) 3D seismic program in the Jeanne d’Arc basin to identify additional exploratory well locations that can be drilled in the near-term.

Key data

Name: North Amethyst

Location: Offshore Canada

Operator: Husky Energy

Distance from shore: 350 km (217 mi)

Partners: Husky Energy (68.875%), Suncor (26.125%), government of Newfoundland and Labrador (5%).

Major contractors

Hull construction: Samsung Heavy Industries of South Korea

Turret construction: SBM IMODCO

Topside construction: Aker Maritime Kiewit Contractors

Shuttle tankers: Knutsen OAS

Subsea flowlines, umbilicals, and installation: Technip

Subsea wellheads and controls: Cameron

Project engineering support: AKCS

Manifold fabrication/subsea equipment: NECL.

Subsurface data

Reservoir: Avalon formation sandstones

Age: Cretaceous

Recoverable reserves: 36 MMcu m (226.2 MMbbl) 30º API

Area: 40 sq km (15 sq mi).

Suppliers

Autronica Fire and Security

Beck Prosper

Champion Environmental Technologies

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MEDC

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Roxar Flow Measurement

Timberland

Turner Designs Hydrocarbon Instruments

Welaptega Marine

Wilhelmsen Marine Engineering

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