We announced we agreed to acquire Thompson Field for $360 million plus a production payment. This is a significant strategic acquisition for us and exactly the type of deal that we want to do for the following reasons.Elsewhere it was stated that it will probably cost $8 - $10/bbl to waterflood the field. The $360 million/60 million bbls (most optimist) --> $6/bbl "plus the production payment." That translates to less than $20/bbl "plus the production payment."
First and foremost, Thompson Field is desirable because it's a large field located only 18 miles from the termination of our Green Pipeline, meaning that there will be minimal additional required pipeline infrastructure to plug this field. It's a field technically similar to Hastings, meaning that what we learned at Hastings, we'll usually transfer over. It's a large field with an estimated 650 million barrels of oil in place, and it is one of our top 10 desired fields in the Gulf Coast area.
As our review has been rather limited thus far, we've not yet determined how much of the field will be floodable, but we are comfortable saying we can target at least 300 million barrels of original oil in place. That would translate into an EOR target of 30 million to 60 million barrels, or expressed in other way, it's an estimated recovery approximate equal to Tinsley Field. While significant, I believe that with further review, we will additional floodable areas at Thompson and the projected EOR recoveries should increase. Although initial EOR production is a few years away, this will fit in nicely with our Gulf Coast program, extending our peak EOR production from that area.
For newbies: a nice discussion of tertiary production/EOR. Note: in the example above, DNR assumes 20% of oil-in-place can be produced via waterflooding; compare with 2 - 8 percent from primary production.