- Drilled 4.0 (3.5 net) wells in the fourth quarter and 7.0 (6.5 net) wells during 2016.
- Fourth quarter production averaged approximately 970 boe per day (85% oil and liquids) based on field estimates, exceeding the Corporation’s exit guidance of 900 boe per day. This represents a 69% increase from the third quarter of 2016 on an absolute and per share basis.
- During the fourth quarter, a 100% working interest (“WI”) Upper Mannville horizontal well started producing with the rate over the first 30 producing days averaging 230 boe per day.
- 2016 capital expenditures, excluding asset acquisitions and dispositions are estimated at $12.3 million1, compared to the original budget of $11 million with the increase due to additional undeveloped land purchases in the Leduc-Woodbend area.
- Asset acquisitions for 2016 are estimated at $5.1 million1, which includes an acquisition in the Killam area of Alberta for $4.1 million and a non-producing property and undeveloped land acquisition in the Macklin area of Saskatchewan for $1 million.
- At year end, Altura’s land position totaled 75,441 net acres, an increase of 110% year over year.
NEW UPPER MANNVILLE OIL POOL AT LEDUC-WOODBEND
In the third quarter of 2016, Altura drilled and completed an Upper Mannville oil well in the Leduc-Woodbend area of Alberta which represents a new Upper Mannville oil pool for the Corporation. There are approximately 700 vertical wells drilled in the area that provide a means to identify and map the hydrocarbon accumulation. The region has extensive gas gathering infrastructure with year-round access.
The 100/13-15-048-26W4 horizontal exploration well was drilled in the southern region of the pool to a true vertical depth of 1,375 meters. The one-mile horizontal well was completed with a multi-stage hydraulic fracture stimulation. Drilling and completion costs totaled $1.7 million1.
The well was placed on production in the fourth quarter and the initial production rates over the first 30 and 45 producing days (IP30 and IP45 rates) are 230 boe per day and 210 boe per day, respectively, of 17° API oil, at an average water cut of 68% and gas/oil ratio of 500 scf/bbl (approximately 93% oil and liquids). The well is currently producing 160 boe per day, based on field estimates. There is no evidence at this time of an underlying water aquifer; however, the Corporation expects water saturations to vary across the pool.
The Corporation has accumulated 50 sections of 100% WI land in the estimated pool. The land holding is comprised of approximately 50% freehold and 50% Crown leases. Overall, this land was acquired at an average cost of $80 per acre.
Altura has licensed a second well and is expected to spud in late January 2017. This well has an estimated drilling and completion cost of $1.8 million.
This new oil pool is at a very early stage of development and there is no certainty that it will be commercially viable to produce. Initial well production rates may not be indicative of longer term rates, and pool parameters may be adjusted as new data emerges. Altura will continue to assess the prospect and delineate the opportunity. Please refer to the “Reader Advisories” section of this press release.
NEW SPARKY OIL PROSPECT AT MACKLIN
Through various transactions the Corporation added 6.5 sections of land at a 100% WI for a Sparky oil prospect in the Macklin area on the Alberta/Saskatchewan border. The Corporation expects to drill a horizontal well on this prospect in the first quarter of 2017.
2017 CAPITAL BUDGET
On November 10, 2016, the Corporation announced its capital development budget of $17.0 million for 2017, funded with cash flow from operating activities and working capital. The budget includes 11.0 gross (10.2 net) horizontal wells targeting the Upper Mannville across the Corporation’s core focus areas for total drilling, completion, equipping and tie-in capital of $12.4 million. In addition, up to $2.0 million will be allocated to acquiring undeveloped land and seismic, $2.1 million will be allocated to waterflood infrastructure in the Eyehill area and $0.5 million will be allocated to abandonment, reclamation and other corporate costs.
Based on the $12.4 million of well related capital and other assumptions, the proposed 11 well drilling program is forecasted by Altura to add approximately 750 boe per day by December 2017 which delivers a risked capital efficiency of approximately $16,500/boe per day. The incremental production will offset forecast base declines and is forecast to grow overall production to exit 2017 at a rate of approximately 1,350 boe per day.
About Altura Energy Inc.
Altura Energy Inc. is a public oil and gas Company active in the exploration and development of oil and natural gas in east central Alberta.