CALGARY, Alberta, Dec. 20, 2017 (GLOBE NEWSWIRE) — Iron Bridge Resources Inc. (the “Iron Bridge” or the “Company“) is pleased to provide an update on its ongoing winter capital budget operations and its share re-purchase activities.
Winter Capital Budget Update
As previously-disclosed, Iron Bridge’s Elmworth winter capital budget includes the drilling of five, 100% working interest wells including a water disposal well. As of this date, the disposal well has been drilled and completed and is undergoing requisite regulatory testing. The first development well (“5-22”) has been successfully drilled to a total measured depth of 5,000 meters including a 2,560 meter lateral section. The drilling rig will now move onto our second development well (“102/5-22”) and will spud later this week. Both of these wells have been drilled on-time and on-budget.
The timing and status of the winter program is as follows:
- Drill and perforate a water disposal well (102/2-23-68-3W6M). – Operation completed.
- Drill Montney horizontal development well (5-22-68-3W6M). – Operation completed.
- Drill Montney horizontal development well (102/5-22-68-3W6M). – To be spud on or about December 22nd with programmed total measured depth of 5,000 meters with 2,580 meters of lateral.
- Back-to-back completion operations for 5-22 and 102/5-22 are expected to initiate late January and begin flow back to the Company’s Elmworth 2-23 Facility in February.
- Drill two separate step-out Montney delineation horizontal wells which will hold a significant amount of Iron Bridge’s acreage. The first is expected to spud mid-January and the second mid-February.
The two development wells will represent the first wells fully-designed and completed by the Company’s new management team since taking over in August. Management believes completion design is key to unlocking the value of the Montney in the Elmworth and Gold Creek area. “Industry has demonstrated that tighter stage spacing and increased frac intensity combined with lower pump rates can deliver exceptionally economic oily Montney wells in this area,” said Gregg Nixon, VP Completions and Production.
The Company’s earlier wells in this area were completed with 30 stages at 75 meter stage spacing and were pumped at relatively high rates. The two development wells to be completed this winter will have 70-80 stages with stage spacing reduced to 30 meters. Based on its own experience, as well as industry wells in the area, management anticipates these completion changes may increase well productivity and lower gas-oil-ratios and water cuts. As previously disclosed, the Company has the benefit of on-site water disposal facilities and as a result, changes to water-cut do not materially impact costs.
The 15-23 well that the Company completed in September was approximately 1,000 meters shorter than our upcoming development wells and was completed with 30 stages at 50 meter spacing. This well produced at approximately 1,000 boe/d for the month of November (based on field estimates). Production consisted of 183 bbls/d light sweet oil, 4.5 MMcf/d of natural gas and 112 bbls/d of NGLs. Pricing of our NGLs product mix in October was approximately 70% of the price we receive for our Elmworth light oil volumes and this is generally consistent with historical pricing. Our current Elmworth NGLs composition is as follows:
|NGL Components||IBR NGL Weighting
|Pricing Variance to Edmonton
Light Price (October 2017)1
|1 October is the most current pricing available for the Company’s natural gas liquids|
The two development wells are planned to be completed and tied into the Elmworth 2-23 Facility prior to ‘spring break-up’. The Company will report on production rates once it feels the wells have established a stabilized rate. The drilling of the two step-out delineation, ‘land-holding’ horizontal wells is expected to continue 41 sections of prospective acreage past its primary expiry date through to the year 2020. Completion operations on these two well bores is budgeted to be undertaken in the second half of 2018.
The Company has significant financial flexibility and full funding capability to carry out its winter drilling capital expenditures budget of approximately $25 million and its share-repurchase program. Exiting 2017, the Company is forecasting approximately $33 million of liquidity (positive working capital plus equity investment) and an undrawn credit facility of $5 million.
At Elmworth and Pipestone, the Company holds a large undeveloped land base consisting of 84 (83.5 net) sections (53,440 net acres) of operated acreage, with substantial resource potential. Asset development of the Montney formation will be focused on extended-reach horizontals with increased frac and proppant intensity. These technical enhancements, coupled with operational efficiencies in spud-to-on-stream cycle times, emulsion management and infrastructure optimization, will provide the key to unlocking the vast potential of the Company’s Elmworth Montney asset.
Share Re-Purchase Program Update
In November, the Company began to re-purchase shares of its common stock under the normal course issuer bid “(NCIB”). To-date, approximately 880,000 shares have been purchased in the open market pursuant to the NCIB for approximately $585,000 in aggregate (average re-purchase price of $0.66/share). All shares that have been re-purchased will be cancelled and eliminated from the existing outstanding share count.
The number of future share re-purchases under the NCIB, the timing of purchases, and the price at which the Common Shares will be purchased, will be determined by the Company in its discretion and will depend on future market conditions.
|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||Gigajoule|
|WTI||West Texas Intermediate||GJ/d||Gigajoules per day|