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 & |
Water Cut (1) |
BOEPD |
Oil & |
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.