ENP Newswire -
Release date- 30052014 -
Selected financial and operational information is outlined below and should be read in conjunction with
FIRST QUARTER 2014 HIGHLIGHTS AND OUTLOOK
Current production is approximately 1,600 boe/d;
Q1 - 2014 production averaged 1,141 boe/d, an increase of 31% from Q1-2013;
Operating netbacks averaged
At Coiron Amargo,
Exited the quarter with
International Operations -
Coiron Amargo Block
Industry activity in and around
These largely involve large integrated exploration and production companies such as YPF, Chevron, Shell,
The Coiron Amargo block is divided into a North and South region with active drill programs being executed in both areas. Coiron Amargo Notre (the northern portion of the block) is currently under a 25 year exploitation (development) concession.
The southern portion of the block, Coiron Amargo Sur, is currently under an exploration contract which was extended until
The focus of
Continue to advance the Company's Vaca Muerta shale activities with a combination of new delineation wells and completion techniques (stimulations and/or multi-stage fracs);
Drill, complete, test and tie-in a number of high impact horizontal wells targeting Vaca Muerta sourced light oil from the Sierras Blancas reservoir and
Technically assess deep gas potential on the block in response to offsetting industry activity.
Recently, the Company has intensified its focus on the Vaca Muerta shale given the magnitude of the unconventional resource across the Coiron Amargo block. The block is strategically positioned within the Neuquen basin in the shallower portion of the Vaca Muerta oil window. Industry activity continues to increase offsetting the Coiron Amargo block where
The CAS.x-14 and CAS.x-15 wells were drilled and cased encountering approximately 105 and 114 meters respectively of Vaca Muerta shale on logs. Completion (stimulation work and/or multi-stage frac) activities on these wells are expected to commence in Q2 - 2014.
The Company's first implementation of horizontal technology internationally saw the CAN.xr-2(h) well re-entered, drilled and completed horizontally in the Sierras Blancas light oil reservoir which is a high deliverability conventional reservoir sourced from the Vaca Muerta shale. The CAN.xr-2(h) well has now been producing since late 2013 and has exceeded management's expectations. Cumulative gross oil production for Q1-2014 was approximately 62,500 barrels of oil or approximately or 700 bbls/d (not including associated solution gas volumes).
Encouraged by the results of the CAN.xr-2(h) horizontal,
The well was subsequently cased and completed with a 4.5' slotted liner and a multi-rate production test was carried out through temporary production facilities. Throughout the multi-rate production test, the CAN-15(h) well flowed without artificial lift equipment and was tested for approximately 75 hours at various choke settings ranging from 6 mm to 12 mm in size with the following flow rates observed during the test:
With the production test only being carried out on a portion of the horizontal lateral section as planned, the highest rates were achieved on a 12 mm choke setting, when the CAN-15(h) well was flowed at a rate of 1,393 bbls/d of oil with 3,301 mcf/d of associated natural gas for a total of 1,943 Boe/d (72% oil) over a 5 hour period and at an average flowing pressure of approximately 1,263 psi.
On an 8mm choke setting, the CAN-15(h) well was flowed at a rate of 745 bbls/d of oil with 1,990 mcf/d of associated natural gas for a total of 1,077 Boe/d (69% oil) over a 29 hour period and at an average flowing pressure of approximately 1,629 psi.
During the test period of 75 hours, the total gross produced cumulative volumes were approximately 2,553 barrels of oil and approximately 7,210 mcf of natural gas, for a total of approximately 3,754 barrels of oil equivalent (68% oil) gross. No significant flowing pressure declines were observed throughout the testing period and water cuts ranged from 0% to 3% throughout the test period.
The greater El Trapial / Curamhuele region is an evolving area within the Neuquen basin which is seeing increased exploration and appraisal activity for unconventional shale plays and tight sand reservoirs. Chevron has recently announced that a second focus area for Chevron in the Vaca Muerta shales is the El Trapial block which is adjacent and to the east of
Others, such as YPF are also drilling on lands offsetting
To satisfy a portion of the 2014 block commitments,
To satisfy the remaining 2014 block commitments,
The Company continues to examine opportunities in respect of a possible a joint venture or other transaction to accelerate exploration and development activities on the block.
This extension provides the partnership until
DOMESTIC OPERATIONS - Greater Paddle River Area,
All field work associated with the installation of these pumping units has now been completed and production has been restored and brought back online at these three locations. With these pumping units now in place,
The IP30 of the well was 212 boe/d (75% oil and NGLs) which is consistent with management's expectations. As part of Madalana's inventory of horizontal Ostracod locations, the Company has a number of offsetting development locations to the 12-31 Ostracod well;
President and Chief Executive Officer
Tel: (403) 262-1901
Finance and Chief Financial Officer
Tel: (403) 262-1901
Forward Looking Information
The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance, including, without limitation, with respect to the expected timing of closing for certain financings, expected operational activities, including drilling, completion, re-entry, evaluation and seismic activities, and the timing thereof and matters pertaining to
Forward-looking statements are often, but not always, identified by the use of words such as 'seek', 'anticipate', 'plan', 'continue', 'estimate', 'approximate', 'expect', 'may', 'will', 'project', 'predict', 'potential', 'targeting', 'intend', 'could', 'might', 'should', 'believe', 'would' and similar expressions. In particular, this news release contains forward-looking statements pertaining to planned operational activities to be conducted by the Company.
In addition, statements relating to 'reserves' or 'resources' are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future.
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; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; 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 the Company will derive from them.
These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.
The forward-looking statements in this news release 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. Investors are encouraged to review and consider the additional risk factors set forth in the Company's Annual Information Form, which is available on SEDAR at www.sedar.com
Reserves and Other Oil and Gas Disclosure
Any references in this news release to test rates, flow rates, initial and/or final raw test or production rates, early production, test volumes behind pipe and/or 'flush' production rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily indicative of long-term performance or of ultimate recovery.
Such rates may also include recovered 'load' fluids used in well completion stimulation. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for
All calculations converting natural gas to barrels of oil equivalent ('boe') have been made using a conversion ratio of six thousand cubic feet (six 'Mcf') of natural gas to one barrel of oil, unless otherwise stated. The use of boe may be misleading, particularly if used in isolation, as the conversion ratio of six Mcf of natural gas to one barrel of oil is based on an energy equivalency 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 from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
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