CALGARY, Dec. 14, 2017 /CNW/ - Altura Energy Inc.
("Altura", or the "Corporation") (TSX Venture: ATU) is pleased to
provide an operational update on its Leduc-Woodbend core area and
its preliminary 2018 capital budget.
OPERATIONAL UPDATE
In the third quarter of 2017, Altura drilled two 1.5-mile
extended reach horizontal ("ERH") wells in the Leduc-Woodbend Upper
Mannville Rex oil pool that commenced production on October 27, 2017. Each well was drilled to
a vertical depth of 1,300 meters with a horizontal length of
approximately 2,000 meters, and completed with an average of 43
frac stages. Drilling and completion costs are estimated at
$2.5 million per well.
Altura's operational efficiencies continue to improve on this
play with the most recent spud to rig release time on the second
ERH well at 10.2 days (344 meters per day) compared to a one-mile
horizontal well drilled in January
2017 at 8.8 days (329 meters per day).
A summary of the current ERH well production rates and initial
production rates over the first 45 calendar days ("IP45") is as
follows:
|
CURRENT
RATE(3)
|
IP45
|
Well
UWI
|
BOEPD
|
Oil &
Liquids(1)
|
Water
Cut
(1)
|
BOEPD
|
Oil &
Liquids(1)
|
Water
Cut
(1)(2)
|
100/03-02-049-26W4
("03-02")(4)
|
478
|
92%
|
47%
|
289
|
95%
|
56%
|
102/13-14-049-26W4
("13-14")(5)
|
306
|
71%
|
62%
|
292
|
74%
|
62%
|
(1)
|
Production rates, oil
and liquids percentages and water cuts are averaged over the
referenced calendar days.
|
(2)
|
Referenced water cut
is inclusive of completion load fluid recovery.
|
(3)
|
Current rate is the
average over the last seven calendar days.
|
(4)
|
03-02 well run-time:
IP45 – 94%; current rate – 100%
|
(5)
|
13-14 well run-time:
IP45 – 82%; current rate – 83%
|
The 03-02 well production rates progressively increased over the
first 45 days of production due to decreasing water cut and
upsizing the artificial lift. The 13-14 well production rates
have been consistent over the first 45 days of
production.
Current production rates from both ERH wells are exceeding ERH
type curve expectations. With limited production history to date,
Altura is modeling each well to follow type curve decline rates
which average approximately 160 boe per day over the first 12
months of production and exit the 12-month period at 105
boe/d. For detailed production plots, type curves and
related economics, please refer to Altura's corporate presentation
on the Corporation's website at www.alturaenergy.ca.
The Corporation is encouraged with the results of its first four
horizontal wells drilled into the Upper Mannville Rex oil pool at
Leduc-Woodbend. The pool is stratigraphically trapped and defined
by nearly 700 vertical wellbore penetrations with bypassed
pay. Altura currently has only five proven and probable
drilling locations that were assigned reserves in the mid-year
update (see Altura's press release from August 10, 2017) on its 60 net sections of land
at Leduc-Woodbend, providing Altura with significant future
potential.
Altura is in the early stages of evaluation of this large oil
pool and has acquired 10 multi-well surface leases that can
initially accommodate up to 30 potential drilling
opportunities.
PRELIMINARY 2018 CAPITAL BUDGET
The board of directors of the Corporation has approved a capital
development budget of $15 million for
2018, funded with cash flow from operating activities and Altura's
$10 million credit facility.
The capital development budget is split approximately 60% to
drilling, completion, equipping and tie-in ("DCET") capital and 40%
to infrastructure and other capital. The significant
weighting to infrastructure investments positions Altura to reduce
operating costs and grow production profitably as it continues to
evaluate the Leduc-Woodbend pool.
The capital budget is forecasted to grow 2018 annual average
production by 12% to 1,260 boe per day. Based on $9.5 million of well-related capital, the
proposed budget is forecasted to deliver a capital efficiency on an
annual basis of approximately $17,000/boe per day.
Management intends to continuously monitor commodity prices and
control capital expenditures as necessary throughout the year and
may at any time adjust the 2018 capital program if oil prices
deteriorate or strengthen. The preliminary budget leaves Altura
with a conservative balance sheet and the flexibility to accelerate
development in the second half of 2018 if results and commodity
prices are supportive.
ABOUT ALTURA ENERGY INC.
Altura is a junior oil and gas exploration, development and
production company with operations in central and east central
Alberta. Altura predominantly produces from the Sparky and
Rex reservoirs in the Upper Mannville group and is focused on
delivering per share growth and attractive shareholder returns
through a combination of organic growth and strategic
acquisitions.
An updated corporate presentation is available on Altura's
website at www.alturaenergy.ca.
READER ADVISORIES
Forward‐looking Information and
Statements
This press release contains certain forward-looking information
and statements within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "budget",
"forecast", "continue", "estimate", "objective", "ongoing", "may",
"will", "project", "should", "believe", "plans", "intends",
"strategy" and similar expressions are intended to identify
forward-looking information or statements. In particular, but
without limiting the foregoing, this press release contains
forward-looking information and statements pertaining to 2018
capital budget guidance, number of Leduc-Woodbend drilling
locations, number of Leduc Woodbend potential drilling
opportunities, forecasted 2018 annual production, and forecasted
capital efficiency.
The forward-looking information and statements contained in this
press release reflect several material factors and expectations and
assumptions of Altura including, without limitation:
- the continued performance of Altura's oil and gas properties in
a manner consistent with its past experiences;
- that Altura will continue to conduct its operations in a manner
consistent with past operations;
- the general continuance of current industry conditions;
- the continuance of existing (and in certain circumstances, the
implementation of proposed) tax, royalty and regulatory
regimes;
- the accuracy of the estimates of Altura's reserves and resource
volumes;
- certain commodity price and other cost assumptions;
- the continued availability of oilfield services; and
- the continued availability of adequate debt and equity
financing and cash flow from operations to fund its planned
expenditures.
Altura believes the material factors, expectations and
assumptions reflected in the forward-looking information and
statements are reasonable but no assurance can be given that these
factors, expectations and assumptions will prove to be correct. To
the extent that any forward-looking information contained herein
may be considered future oriented financial information or a
financial outlook, such information has been included to provide
readers with an understanding of management's assumptions used for
budgeted and developing future plans and readers are cautioned that
the information may not be appropriate for other purposes.
The forward-looking information and statements included in this
press release are not guarantees of future performance and should
not be unduly relied upon. Such information and statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information or statements
including, without limitation:
- changes in commodity prices;
- changes in the demand for or supply of Altura's products;
- unanticipated operating results or production declines;
- changes in tax or environmental laws, royalty rates or other
regulatory matters;
- changes in development plans of Altura or by third party
operators of Altura's properties,
- increased debt levels or debt service requirements;
- inaccurate estimation of Altura's oil and gas reserve and
resource volumes;
- limited, unfavorable or a lack of access to capital
markets;
- increased costs;
- a lack of adequate insurance coverage;
- the impact of competitors; and
- certain other risks detailed from time to time in Altura's
public documents.
The forward-looking information and statements contained in this
press release speak only as of the date of this press release, and
Altura does not assume any obligation to publicly update or revise
them to reflect new events or circumstances, except as may be
required pursuant to applicable laws.
Oil and Gas Advisories
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. Per boe amounts have been
calculated by using the conversion ratio of six thousand cubic feet
(6 mcf) of natural gas to one barrel (1 bbl) of crude oil.
The boe conversion ratio of 6 mcf to 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current
price of crude oil as compared to natural gas is significantly
different from the energy equivalent of 6:1, utilizing a conversion
on a 6:1 basis may be misleading as an indication of value.
Drilling Locations
This news release discloses drilling locations and potential
drilling opportunities at Leduc-Woodbend. Proven locations
and probable locations, which are sometimes collectively referred
to as "booked locations", are derived from the Corporation's most
recent independent reserves evaluation as of June 30, 2017 and account for drilling locations
that have associated proved or probable reserves, as
applicable. Potential drilling opportunities are internal
estimates based on the Corporation's prospective acreage and an
assumption as to the number of wells that can be drilled per
section based on industry practice and internal review.
Potential drilling opportunities do not have attributed reserves or
resources. Potential drilling opportunities have specifically
been identified by management as an estimation of our multi-year
drilling activities based on evaluation of applicable geologic,
seismic, engineering, production and reserves data on prospective
acreage and geologic formations. The drilling locations on
which Altura will actually drill wells will ultimately depend upon
the availability of capital, regulatory approvals, seasonal
restrictions, oil and natural gas prices, costs, actual drilling
results and other factors. While certain of the potential
drilling opportunities have been derisked by drilling existing
wells in relative close proximity to such potential drilling
opportunities, the majority of other potential drilling
opportunities are farther away from existing wells where management
has less information about the characteristics of the reservoir and
therefore there is more uncertainty whether wells will be drilled
in such locations and if drilled there is more uncertainty that
such wells will result in additional oil and gas reserves,
resources or production.
Initial Production Rates
Any references in this press release to initial production rates
are useful in confirming the presence of hydrocarbons, however,
such rates are not determinative of the rates at which such wells
will continue production and decline thereafter. Oil and gas
formations are inherently unpredictable, particularly in the early
stage of their development. While encouraging, readers are
cautioned not to place reliance on such rates in calculating the
aggregate production for the Corporation.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Altura Energy Inc.