CALGARY, Alberta, Jan. 22, 2018 (GLOBE NEWSWIRE) — InPlay Oil Corp. (“InPlay” or “the Company”) (TSX:IPO) (OTCQX:IPOOF) is pleased to announce that its Board of Directors has approved a $38 million Exploration and Development capital program for 2018 which is forecasted to deliver over 23% average light oil production per share growth in 2018 over 2017. This organic production increase is expected to deliver top quartile light oil production per share growth in the industry.
2018 Budget Overview
InPlay’s 2018 capital program is focused on drilling approximately 10-11 net horizontal Cardium wells with a combination of extended reach and one mile wells with over 80% of them anticipated to be in our Willesden Green bioturbated play. This program is based on our recent, very successful Willesden Green horizontal program where we had exceptional results from five wells brought on production in the second half of 2017. These wells have been yielding higher light oil weightings than initially expected as we have increased our current Willesden Green liquid rate to 68% from 45% one year ago after acquiring the property. This year’s program continues to focus on these types of wells in order to generate the best results and given the current disconnect between oil and gas strip pricing. These wells payout within one year or less on current commodity prices.
The development drilling, completion and equipping program is expected to comprise approximately 81% of total capital expenditures planned for 2018, with an additional approximately 13% allocated to the very exciting East Basin Duvernay light oil play. This program complements InPlay’s core technical strengths where management has drilled and performed multi-frac completions on over 220 combined Cardium horizontal wells.
Based on the planned program, InPlay is forecasting an annual average production rate of 4,400 to 4,500 boed (72% oil & liquids) with exit production of 4,800 to 4,900 boed (73% oil & liquids). We do not expect to see growth in natural gas and associated liquids in 2018 over 2017. This highly focused program is anticipated to increase our average corporate light oil production percentage from 59% (total liquids 67%) in 2017 to 64% (total liquids 72%) in 2018.
This budget is based on a WTI price of US$ 60/bbl, foreign exchange of 0.80 CDN/USD, and $ 1.75/mcf AECO price. The 2018 fourth quarter debt to fourth quarter annualized adjusted funds flow from operations is estimated at 1.3 times. This program provides plenty of flexibility and provides results which are expected to yield top quartile light oil production growth within our oil weighted peers. There will be ample room to potentially expand the program in the second half of the year if the current oil commodity strip price, which is the highest in two years, prevails.
The Company had a very successful year in 2017. In the fourth quarter, a single pad with three one mile Willesden Green bioturbated Cardium horizontal wells were drilled, completed and all put on production at the very end of November, which was approximately two weeks later than planned due to some delays with services. In December these three wells experienced typical initial startup issues, coupled with extreme cold weather and third party pipeline curtailments resulting in approximately 80% run time for the month yet still demonstrating excellent results (presented in the following table) and allowing us to easily meet our year end exit guidance of 4,300 to 4, 500 boed:
|WELL #||AVERAGE DAILY
* Average Day Rate = (monthly volume) / (hours produced in the month) x 24
** Calendar Day Rate = (monthly volume) / (days in month)
InPlay commenced its 2018 program late in 2017, and has drilled one net two mile Willesden Green Horizontal which is expected to be on production in February. The Company anticipates in total 3-4 net Willesden Green Cardium Horizontal wells to be drilled and brought on production in the first quarter of 2018, with minimal drilling in the second quarter until after the spring breakup period. Also planned is completion of our first East Basin Duvernay Shale horizontal well which is expected to occur after spring breakup and brought on production early in the summer.
The InPlay team has executed its strategy and expanded on its premier asset base in two of the most exciting light oil plays in the Canadian basin being the bioturbated Cardium and the East Basin Duvernay Shale Play. These plays are highlighted by large oil in place, low base declines, long reserve life and a large inventory of high rate of return drilling locations. The Company is extremely pleased with the results achieved to date which are consistent with its core strategy focused on being one of the most capital efficient, light oil weighted companies. This strategy coupled with the Company’s low base decline of approximately 22% will allow InPlay to provide consistent top tier production per share growth.
The InPlay management team and Board of Directors are motivated and committed to provide consistent, predictable growth while maintaining a strong balance sheet with financial flexibility. The Company looks forward to providing our shareholders with a further update in March with the release of year end 2017 reserves and financial results.
About InPlay Oil Corp.
InPlay, based in Calgary, Alberta, has been engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties in western Canada since it commenced operations as a private company in June 2013. Since commencing operations InPlay has concentrated on exploration and development drilling of light oil prospects in the Province of Alberta in a very focused area of Central and West Central Alberta.
The InPlay management team has worked closely together for several years in both private and public company environments and has an established track record of delivering cost-effective per share growth in reserves, production and cash-flow. InPlay will continue to implement its proven strategy of exploring, acquiring, and exploitation with a long term focus on large, light oil resource based assets. The InPlay management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions. The updated corporate presentation will be posted to InPlay’s website in due course which will include an update on hedging. Additional information can be found on InPlay’s website at: www.inplayoil.com.