Septimus, British Columbia
In British Columbia, Crew drilled two (2.0 net) Montney horizontal wells in the fourth quarter including one well at Kobes which was subsequently sold as part of the Kobes disposition announced in December 2012. Total drilling activity for the year was seven (7.0 net) wells targeting liquids rich natural gas in the Montney formation. Production for the fourth quarter averaged approximately 6,400 boe per day as wells brought on in the third quarter of 2012 continued to outperform historical type curves. Crew has announced the acquisition of approximately 115 net sections of land that are adjacent or proximal to our Septimus operating area. The Company plans to drill up to 11 (9.0 net) wells in this area in 2013, commence the expansion of the pipeline infrastructure to the west of Septimus, install the fourth compressor at the Crew operated Septimus facility boosting processing capacity to 60 to 65 mmcf per day and install a water handling and disposal system in the area that is expected to reduce operating costs.
Tower, British Columbia
At Tower, the initial Montney oil well (Crew 33% working interest) completed in the third quarter of 2011 was brought on continuous production at an average rate (latest 60 days) of 310 boe per day consisting of 210 bbls per day of oil, 20 bbls per day of ngl and 490 mmcf per day of natural gas. Crew has included capital in the 2013 program to drill two Montney oil wells at Tower and currently has licensed eight (5.3 net) wells.
Deep Basin, Alberta
In the Deep Basin, Crew drilled one (1.0 net) Falher horizontal well at Kakwa which tested at average production rates of 10.5 mmcf per day with 35 bbl/mmcf free condensate at a flowing casing pressure of 3,560 psi at the end of an 11 day production test period. The well was brought on production at a restricted rate due to capacity limitations at third party facilities. In total for the year, Crew drilled nine (7.2 net) wells primarily targeting liquids rich natural gas in the Cardium formation on Crew's Elmworth and Kakwa lands. In the fourth quarter of 2012, production averaged approximately 4,800 boe per day with Cardium horizontal well performance exceeding historical type curves allowing the Company to exit the year producing approximately 6,000 boe per day.
Pekisko Play - Princess, Alberta
In the fourth quarter, Crew drilled 13 (13.0 net) wells for a total of 51 (51.0 net) wells for the year. In addition to the Company's ongoing Pekisko development, Crew drilled two Mannville horizontal wells on Crown land which were brought on production in 2012 with an optimized rate after six months of production of 285 bbls of oil per day and the second more recent well with a 30 day rate of 305 bbls of oil per day. Crew has approximately 55 net sections of Crown rights in the Princess area and is in the process of delineating the extent of the Mannville potential on Company lands. Production at Princess for the fourth quarter averaged approximately 5,900 boe per day consistent with the third quarter as the combination of production from new wells and the early impact from our waterflood projects have offset historical production declines in the order of 35 to 40%. Current production at Princess is 6,000 to 6,500 boe per day.
Pekisko Secondary Recovery
In the fourth quarter, Crew initiated waterflooding of the Pekisko "DD" pool bringing the total to eight pools currently under waterflood. The original Tilley Pekisko "K" and "N" pools have consistently exceeded expectations with current oil production levels 254% and 176%, respectively, above pre-waterflood levels (waterfloods initiated in January 2010 and July 2011, respectively). At Alderson the Pekisko "M", "KK" and "HH" have been under waterflood since July 2012 and have shown positive initial response with gas oil ratio reductions of up to 70% over pre-waterflood levels and some early flush oil production. At West Tide Lake the Pekisko "CC" and "KK" pools have been under waterflood since September 2012, and are showing indications of initial response through reduction in the gas oil ratio on the order of 27% on a combined basis. In aggregate, the eight pools under waterflood represent approximately 25% of the currently developed Pekisko resource (approximately 16% of Crew's Pekisko land base is currently developed).
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