2013 Capital Efficiency of $18,900 per Boe/d
CALGARY, Nov. 6, 2013 /CNW/ – Longview Oil Corp. (“Longview” or the “Company”) is pleased to announce the following drilling and operations update.
Q3 2013 DRILLING PROGRAM
A total of six gross (5.6 net) wells were drilled during the third quarter of 2013 resulting in five gross (4.8 net) oil wells. At Northgate, Saskatchewan the Company drilled two gross (two net) wells targeting the Mississippian Midale formation. The initial well produced at a rate of 246 boe/d during the initial 30 days of production, comprised of 204 bbls/d of 41O API light oil and 250 mcf/d of natural gas.
The second well has been on-stream for 14 days with production averaging 437 boe/d comprised of 316 bbs/d of 41O API light oil and 725 mcf/d of natural gas. A third well was drilled in early October and will be on-stream by mid-November.
The Company plans on utilizing natural gas production from these wells to generate electricity at the central Northgate battery site with up to 1MW of surplus electricity being sold into the SaskPower grid with the balance used to run our own facility.
Longview has identified up to nine gross (nine net) additional drilling locations on this prospect.
The Company has incurred the following capital expenditures during the first nine months of 2013:
|Drilling, completions and equipment for 15 gross (12.9 net) wells||$23.0|
|Reactivations for nine gross (8.5 net) wells||1.4|
|Waterflood enhancement and facility upgrades||3.8|
|Capitalized G&A and Other||1.6|
|Total capital expenditures (Q1 to Q3 2013)||$29.8|
On a year to date basis our capital expenditures program has resulted in total production additions of 1,578 boe/d comprised of 1,395 bbls/d of light oil and 1,100 mcf/d of natural gas.
This represents a capital efficiency of $18,900 per boe/d with light oil volumes comprising 88 % of total production additions.
Amounts incurred for waterflood and facility upgrades are anticipated to i) increase production volumes; ii) improve recovery of oil reserves and; iii) re-pressure reservoirs in order to enhance future in-fill drilling programs. Waterflood expenditures were incurred at Sunset, Pembina, Rose Creek and Nevis in Alberta and Eyehill, Lashburn and Alameda in Saskatchewan.
OPERATIONS UPDATE – 2013 PRODUCTION SUMMARY
|Natural gas (mcf/d)||7,357||7,374||7,706|
Extreme spring break-up conditions persisted well into the third quarter of 2013 causing delays in our capital program. As a result, Longview went four straight months (May through August 2013) without being able to add any new production volumes.
In spite of these delays in executing our 2013 drilling program, our crude oil production volumes remained relatively stable when compared to levels reported in Q2 and Q1 of 2013.
Natural gas liquids and natural gas production volumes also remained at stable rates demonstrating the high quality, low decline nature of our existing production base.
The Company plans on releasing complete third quarter results after markets close on November 8, 2013.
Forward Looking Statements
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. The use of any of the words “expect”, “seek”, “anticipate”, “continue”, “estimate”, “approximate”, “believe”, “plans”, “intends”, “confident”, “may”, “objective”, “ongoing”, “will”, “should”, “project”, “predict”, “potential”, “targeting”, “could”, “would”, and similar expressions are intended to identify forward-looking information. More particularly, this document contains forward looking statements and information which include, but are not limited to, expected future drilling and completion plans, expected capital expenditures, expected production and reserves growth, expectations of the effect of drilling and completion programs on productivity, recoveries and costs and the future operations of Longview and expectations regarding waterfloods and facility upgrades.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Longview, including with respect to the anticipated exploration and development opportunities and the outlook for the fiscal year ending December 31, 2013, expectations and assumptions concerning the success of future exploration and development activities, production guidance, the performance of new wells and drilling and completion programs, prevailing commodity prices and the availability of additional capital if and when required by the Company.
Although Longview believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Longview can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to satisfy the conditions to closing the Arrangement, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Longview’s Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and Longview’s other public disclosure documents which have been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and Longview undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Any references in this news release to test rates or initial production rates (“IP”), including IP rates of 30 days or less, are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily indicative of long-term performance or ultimate recovery and such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered “load oil” fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
Meaning of BOE
The term “BOE” may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: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 equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. All BOE conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.
SOURCE Longview Oil Corp.
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