CALGARY, ALBERTA–(Marketwired – April 16, 2015) – RMP Energy Inc. (“RMP” or the “Company“) (TSX:RMP) is pleased to report that during the first quarter of 2015, it achieved an average daily production level of approximately 12,250 boe/d, with light crude oil and NGLs volumes accounting for 47% of the first quarter production. This represents a significant increase of 33% over RMP’s comparative first quarter 2014 production of 9,229 boe/d and maintains approximately the same production level as the fourth quarter of 2014. First quarter 2015 output was affected by an outage of a regional oil sales pipeline causing the Company to shut-in production both at Ante Creek and Waskahigan for a five-day period in mid-January 2015 and a mechanical disruption which resulted in the shut-in of the Company’s Kaybob Montney gas field commencing March 19, 2015.
RMP is also pleased to announce that on April 2, 2015, as originally-scheduled, it started-up its second Ante Creek gas handling and battery infrastructure. As a result, all but one of the Company’s Ante Creek Montney horizontal oil wells are currently producing (23 in total). The Company’s operational plan in the near-term is to ‘line-out’ this infrastructure and ensure the newly-installed equipment and components are functioning properly and smoothly. Current corporate production is approximately 15,500 boe/d and does not include approximately 1,500 boe/d presently shut-in at Kaybob. The Company plans to resume drilling in the third quarter of this year, as scheduled under its existing capital program, and as such new well production additions are not expected until that time. RMP is reaffirming its previously-disclosed fiscal year 2015 market guidance average daily production of 13,500 boe/d, weighted 45% light oil and NGLs, representing industry-leading growth of 15% in forecasted year-over-year production.
Encouraged by industry success with slick water frac completion technology, over the last several months the Company utilized this enhanced well completion method and conducted slick water hybrid stimulations on five horizontal wells at Waskahigan and Grizzly, with the objective of creating a more complex fracture network and stimulating more reservoir rock within the Montney formation. Four of the five slick water well completions, with initial production information, have yielded very encouraging early results. Of the Waskahigan slick water completion wells, the 2-15-64-23W5 and 12-29-63-23W5 are notable because their production performance to-date is expected to establish a substantial new fairway of drilling opportunities for RMP. Both of these wells have each produced approximately 30,000 barrels of light oil to-date. During the first thirty days of reported production, these two wells produced an average light oil rate of approximately 840 bbls/d and 805 bbls/d, respectively. The initial oil production from these two Waskahigan wells is significantly above the Company’s expected oil production rates for its wells in the area. The other two slick water completed wells with production information (12-9-64-23W5 and 12-25-62-23W5) are approximately at or above RMP’s expected production rates for its wells in the respective areas.
The Company is scheduled to release its interim consolidated financial statements and associated Management’s Discussion and Analysis for the three months ended March 31, 2015 on May 14, 2015.
RMP’s annual general meeting of shareholders is scheduled for 3:00 p.m. on Tuesday, June 9, 2015 in the McMurray Room of the Calgary Petroleum Club, located at 319 – 5th Avenue S.W., Calgary, Alberta.
|bbl or bbls||barrel or barrels||Mcf/d||thousand cubic feet per day|
|Mbbl||thousand barrels||MMcf/d||million cubic feet per day|
|bbls/d||barrels per day||MMcf||Million cubic feet|
|Boe||barrels of oil equivalent||Bcf||billion cubic feet|
|Mboe||thousand barrels of oil equivalent||psi||pounds per square inch|
|boe/d||barrels of oil equivalent per day||kPa||kilopascals|
|NGLs||natural gas liquids||GJ/d||Gigajoules per day|
|WTI||West Texas Intermediate|
Any references in this news release to initial and/or final raw test or production rates and/or “flush” production rates are useful in confirming the presence of hydrocarbons, however, such short-term rates are not determinative of the rates at which such wells will commence production and decline thereafter. These short-term well production rates, in addition to any reported 30-day initial rates within this news release, can be influenced by “flush” production effects from fracture stimulations in horizontal wellbores and are not necessarily indicative of long-term production performance or ultimate recovery. Individual well production performance may vary. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “budget”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions. More particularly and without limitation, this news release contains forward looking information relating to: first quarter 2015 average daily production and associated crude oil and NGLs weighting, in addition to average production rates for the first thirty days of reported production for certain wells at Waskahigan; forecasted fiscal year 2015 average daily production and the associated crude oil and NGLs weighting; plans to resume drilling in third quarter 2015 and the resulting timing of new well production additions; the expected establishment of a new drilling fairway at Waskahigan; and timing of release of first quarter 2015 financial results. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that the Company will derive from them. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.
This news release may disclose drilling locations in four categories: (i) proved undeveloped locations; (ii) probable undeveloped locations; iii) unbooked locations; and, iv) an aggregate total of (i), (ii) and (iii). Proved undeveloped locations and probable undeveloped locations are booked and derived from the Corporation’s most recent independent reserves evaluation as prepared by InSite as of December 31, 2014 and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations 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. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of the Company’s multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the Company will actually drill wells is ultimately dependent upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations 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.
In this news release RMP has adopted a standard for converting thousands of cubic feet (“mcf“) of natural gas to barrels of oil equivalent (“boe“) of 6 mcf:1 boe. Use of boes may be misleading, particularly if used in isolation. The boe rate is based on an energy equivalent 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 than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
RMP Energy Inc.
President and Chief Executive Officer
RMP Energy Inc.
Vice President, Finance and Chief Financial Officer