CALGARY, Jan. 15, 2018 /PRNewswire/ – OBSIDIAN ENERGY LTD. (TSX/NYSE – OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to confirm full year 2017 production ahead of guidance and provide an operational update, including preliminary results from our four well pad in Willesden Green.
David French, President & CEO commented, “2017 was a great year for Obsidian Energy. We repositioned the development portfolio, effectively responded to a volatile commodity and currency environment, and exited the year with clear operational momentum. There is much to be excited about as we head into 2018. To supplement this update, we added a video to our website which gives more colour to our progress and my perspective on where the business is heading in 2018 and beyond.”
Second Half Program Drives Full Year 2017 Production Above Guidance
Full year 2017 production was 31,700 boe/d, above the high end of our guidance range of 30,500 – 31,500 boe/d. Ongoing waterflood and our shallow base decline, combined with solid execution of our second half development program drove the outperformance. This marks another quarter of consistent production delivery and we look forward to maintaining this momentum through 2018.
We experienced some unexpected production downtime in December due to extreme cold weather in the last half of the month. Additionally, third party pipeline curtailment delayed on-stream timing of our four well pad in Willesden Green until early 2018. These wells are now on production and are exhibiting strong initial results as noted below.
Q4 2017 production was 31,400 boe/d, with an estimated liquids weighting of 62%. To date in January, corporate production has averaged over 32,000 boe/d despite continued cold weather related downtime.
Increased Willesden Green Cardium Production by Over 30% with New Four Well Pad
Our four well pad in Willesden Green Cardium was on-stream as of January 3, 2018. The pad has averaged approximately 2,800 boe/d since the wells came on production, implying an average of 700 boe/d per well over that timeframe. As a result, we expect to increase our entire Willesden Green Cardium production by over 30% for the month of January. These strong well results continue our successful approach to optimizing wellbore placement in the bioturbated interval and proven completion design.
Accelerated 2018 Cardium Program into December to Optimize Rig Schedule and Bring Forward Volumes
With continued execution success and a focus on capital efficiency, we decided to accelerate a portion of our 2018 capital program into 2017. In December, we drilled two primary horizontal wells in Willesden Green targeting the bioturbated interval. We also drilled three of four horizontal producers from our PCU #9 pad, which employs a low capital, integrated waterflood approach to mitigate declines. Accelerating these projects into 2017 maintained our operational efficiency which will reduce well costs and save approximately $0.5MM on the Cardium program.
Willesden Green primary wells are expected to be on production by mid-February, while the PCU #9 pad is expected to come on early April. We offset the capital cost of bringing these wells forward by delaying vertical injectors associated with our 2017 program into 2018.
Any incremental capital available in the second half of the year will likely go towards Cardium development.
Confirmed the Upside within the Heart of our Peace River Acreage
Second half execution of our 12 well Peace River program was very strong, with three of our wells exhibiting rates over 500 bbl/d per well, including December average oil production of 618 bbl/d on one of those wells. Our Peace River team continues to deliver strong results as we develop our multi-year inventory.
Some of our heavy crude oil in Peace River is priced off Western Canadian Select (WCS), which has recently muted some of the upside of higher US$ WTI pricing. To mitigate the impact of wider WCS differentials, we utilize a portfolio of sales and pricing terms, including rail transportation, which reduces the price impact by approximately half. This has helped reconfirm the attractive economics of our 2018 Peace River program and we plan to begin this program in the coming weeks.
We look forward to updating the investment community with our full 2017 financial and operating results in early March. A short video featuring David French, President & CEO, can be found under the Presentations & Events section of our website or by using the following link: