CALGARY, Jan. 15, 2014 /CNW/ – Connacher Oil and Gas Limited (CLL – TSX; “Connacher” or the “Company”) provides the following operational update for the fourth quarter 2013 (“Q4 2013”). All production related results disclosed herein are based on field estimates.
Production and Operations
Connacher’s Great Divide production for Q4 2013 averaged 11,400 bbl/d. Production was 3% lower than the prior quarter (Q3 2013 11,788 bbl/d). Production in late November and early December was negatively impacted by a temporary reduction in natural gas supply in northern Alberta necessitating a turndown in steam generation, primarily at Algar. Preventative maintenance was advanced and performed during this period and also reduced production.
The four new infill wells at Pod One have been on production for 135 days and averaged 1,120 bbl/day in December. Steam injection on the four new SAGD well pairs at Pad 104 continued through the end of Q4 2013 and into early January. All of the wells are now on production. These wells have contributed to average Great Divide production to date in January of 13,200 bbl/day.
Marketing and Hedging
In Q4 2013, the volume of bitumen moved to customers outside of Alberta averaged approximately 7,426 bbl/d (65% of total bitumen sales) compared to approximately 10,850 bbl/d (92% of total bitumen sales) in Q3 2013. The balance of the bitumen sales were to intra-Alberta markets.
For 2014, the Company has approximately 6,000 bbl/d of production hedged at minimum WTI prices ranging from US$90 to US$96. Connacher has also hedged 2,000 bbl/d of WCS basis differentials for Q2 through Q4 2014 ranging between WTI less US$18.25 to US$22.50 and 2,500 bbl/d of MARS basis differentials for 2014 averaging WTI less US$1.60.
Q4 2013 Conference Call Details
Connacher will host its quarterly conference call on March 20, 2014 at 8AM MDT. Interested participants can call in to (888) 231-8191. Please use the Conference ID# 35536113. Participants are encouraged to call in 5 minutes prior to commencement.
Connacher is a Calgary-based in-situ oil sands developer, producer and marketer of bitumen. The Company holds a 100 percent interest in approximately 500 million barrels of proved and probable bitumen reserves and operates two steam assisted gravity drainage (“SAGD”) facilities located on the Company’s Great Divide oil sands leases near Fort McMurray, Alberta.
Forward Looking Information
Forward looking information is based on management’s expectations regarding the Company’s future financial position, the Company’s future growth, results of operations and production, future commodity prices and foreign exchange rates, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, environmental matters, business prospects and opportunities and future economic conditions. Forward looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (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 and resource estimates, the uncertainty of geological interpretations, the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), risk of commodity price and foreign exchange rate fluctuations, risks associated with the impact of general economic conditions, risks and uncertainties associated with maintaining the necessary regulatory approvals and securing the financing to proceed with the operation and continued expansion of the Great Divide oil sands project.
In addition, reported average production levels may not be reflective of sustainable production rates and future production rates may differ materially from the production rates reflected in this press release due to, among other factors, difficulties or interruptions encountered during the production of bitumen.
Additional risks and uncertainties affecting Connacher and its business and affairs are described in further detail in Connacher’s Annual Information Form for the year ended December 31, 2012. Although Connacher believes that the expectations in such forward looking information are reasonable, there can be no assurance that such expectations shall prove to be correct. The forward looking information included in this press release is expressly qualified in its entirety by this cautionary statement. The forward looking information included herein is made as of the date of this press release and Connacher assumes no obligation to update or revise any forward looking information to reflect new events or circumstances, except as required by law.
SOURCE Connacher Oil and Gas Limited
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