The Grande Prairie COU operates in the Peace River Arch area of Alberta. Core producing areas include Valhalla and Karr-Gold Creek. Average daily sales volumes in the Grande Prairie COU during 2012 were 4,536 Boe/d, an increase of 27 percent compared to 2011. Fourth quarter 2012 sales volumes averaged 5,243 Boe/d, after being curtailed as a result of the Third Party Disruptions between August and October.
Increases in 2012 sales volumes were primarily from Valhalla. The Company's gathering and compression system was expanded to 24 MMcf/d in the second quarter and additional wells were brought on-stream. The Company drilled six (4.3 net) wells in Valhalla in 2012 targeting the Montney and Doig formations. These wells were completed and tied-in during the year, along with wells drilled in 2011.
Karr-Gold Creek is located approximately 20 kilometers north of the Kaybob COU's Musreau development. Activities in 2012 focused on exploration of the middle and upper Montney reservoirs and continued efforts to improve the performance of the Company's previously completed lower Montney formation wells. Paramount's middle and upper Montney land position at Karr-Gold Creek of approximately 180 (148 net) sections exhibits similar geological reservoir and fluid characteristics to competitors' offsetting lands, and the Company's Montney holdings in the Musreau / Resthaven area.
In the third quarter of 2012, the Company completed a previously drilled middle Montney well at Karr-Gold Creek, which was brought-on production during the first quarter of 2013. A new well targeting the middle Montney formation was drilled in the fourth quarter of 2012, was completed in the first quarter of 2013 and will be tied-in during the third quarter. Test results from these wells have exceeded forecasts, confirming Paramount's interpretation that the Kaybob middle/upper Montney play extends northwest onto the Karr lands, adding significant resources to Paramount's future development base in the Deep Basin.
Results of the performance enhancement program for the Company's lower Montney wells at Karr-Gold Creek have not been consistent with expectations. While recoveries from some wells improved modestly, others wells are unchanged and Third Party Disruptions impacted the project for a significant portion of the year. This program will not be continued in 2013.
Exploration and development activities in the Grande Prairie COU will include the drilling, completion and tie-in of middle Montney wells at Karr-Gold Creek. The Company anticipates the existing inventory of producing and behind pipe wells at Valhalla will be sufficient to maintain production volumes at the current level throughout 2013, subject to the availability of NGLs transportation and fractionation capacity.
Southern(1) 2012 2011 % Change------------------------------------------------------------------------Sales Volumes Natural gas (MMcf/d) 9.8 10.8 (9) NGLs (Bbl/d) 171 150 14 Oil (Bbl/d) 1,016 1,483 (31) ----------------------------Total (Boe/d) 2,814 3,424 (18) ----------------------------Exploration and Development Expenditures ($ millions) Exploration, drilling, completions and tie-ins 23.0 14.9 51 Facilities and gathering 2.7 4.7 (43) ---------------------------- 25.7 19.6 29 ---------------------------- Gross Net Gross Net ----------------------------Total Land Holdings (sections) 627 432 708 489Wells Drilled 4 2.2 22 12.0------------------------------------------------------------------------------------------------------------------------------------------------(1) Amounts include the results of discontinued operations. Refer to page seven of Paramount's Management's Discussion and Analysis for the year ended December 31, 2012.
