Our Midale operating area is located near Weyburn, Saskatchewan.  It began producing in 1953 and is forecast to continue to produce for an additional 50+ years.  It has over 730 million barrels original oil in place (“OOIP”) and its low decline production of 3,200 boepd (net) is supported by both waterflood and CO₂ enhanced oil recovery (“EOR”).  Cardinal operates one of Canada’s largest CO₂ sequestering facilities in Midale. In 2022, we sequestered 292,000 tonnes of CO₂ equivalent, more than offsetting all of Cardinal’s company wide direct emissions.  The wells drilled in 2021, 2022 and 2023 to provide increased CO₂ injection into the reservoir are seeing production responses in offsetting wells that are above expectation.

Midale Unit (77% Cardinal operated)

• OOIP: 730 MMbbls (~22% recovery factor to date)
• Low density development
• Early stages of larger scale development

*P FCF (Property Free Cash Flow) = Net Operating Income Less Capital Expenditures

Oil production historically has been accomplished through natural drive mechanisms (i.e. primary) or after the natural reservoir drive decreases, through water injection into the reservoir, which acts as an “artificial” reservoir drive. Enhanced oil recovery is the process of improving the recovery of an existing conventional oil pool through the application of water, chemical, thermal, gas or solvent injection beyond what has been achieved through primary recovery methods. Enhanced oil recovery (EOR) with CO₂ is a means of improving oil recovery from a pool, beyond waterflood, by injecting CO₂ into an oil reservoir.

Typically under primary recovery, an oil pool is capable of producing 5-20% of the total original oil in place (OOIP). Under a waterflood, the potential recovery factor can increase by an additional 15-30%. With primary and waterflood recovery, an oil pool can see ultimate recovery factors ranging from 20% to 50% of the total OOIP, leaving over half to three-quarters of the total oil untapped. With CO₂ EOR, the injection of CO₂ can improve recovery factors by an incremental 5-30%, meaning up to 25-80% of total oil in place could be recovered.

Typical CO₂ flooding works through the process of miscibility. At the proper reservoir temperature and pressure, CO₂ acts as a solvent; and when mixed with oil, results in reduced interfacial tension, a net oil volume increase (i.e. swelling), and reduction in the oil viscosity. This all leads to improved mobility of the oil from the reservoir.

Because of the reservoir heterogeneity and to prevent CO₂ fingering (or CO₂ breakthrough), water is often injected intermittently with CO₂ injection, called a water alternating gas (WAG) scheme. The WAG technique forms sequential banks of fluids (water, CO₂, and oil) from the injection well to the producing well. The purpose of the WAG technique is to increase ultimate oil recovery.

Source: Ansarizadeh et al, 2015: Carbon Dioxide – Challenges and Opportunities, BMO Capital Markets.

For every CO₂ injection well, there are often between two and four producing wells. CO₂ is compressed or delivered compressed as a liquid via a pipeline to the injection well. The CO₂ is injected down to the reservoir and fills the pore space of the rock. When encountering oil, the CO₂ becomes miscible and eventually forms an oil bank that is pushed or “swept” through to the producing wells. As mentioned above, the WAG process can also be applied, whereby water is injected following CO₂ injection resulting in higher ultimate oil recovery.