(i) Includes royalty and other income classified with oil and gas sales, but excludes realized and unrealized gains or losses on derivative contracts. Barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
WINTER DRILLING PROGRAM
Anderson has completed its winter drilling program with 6 gross (4.3 net revenue) Cardium oil wells drilled, completed and on production. The Company has completed all of its drilling commitments on third party lands. Wells were drilled in the Ferrier, Willesden Green, Garrington and Buck Lake project areas. Drilling and completion costs were approximately $2.3 million per well in this program.
SLICKWATER FRAC TECHNOLOGY
In February 2012, Anderson initiated its first slick water frac completion in the Cardium. The Company had previously employed gelled water and gelled hydrocarbon frac techniques. Encouraged by the success of its first slick water frac completion and recent industry activity in slick water frac technology, the Company used slick water fracs on its six well Cardium horizontal drilling program this winter. Production information from the seven wells confirms that initial production is significantly higher when slick water frac technology is used in the Cardium formation compared to previously used gelled water and gelled hydrocarbon frac techniques. This conclusion is supported by industry activity offsetting Company interest lands. For the wells drilled by the Company that were completed using slick water frac technology, the average initial production ("IP") performance for various calendar day averages is shown below:
Average Gross Initial Production for first X days (IP X) IP 30 IP 60 IP 90 IP 180Number of wells in average 7 4 3 1Barrels of oil per day (BOPD) 302 183 165 155Barrels of oil and NGL per day (BPD) 330 212 184 193Barrels of oil equivalent per day (BOED)(i) 455 345 292 415----------------------------------------------------------------------------
(i) Barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Short term production rates can be influenced by flush production effects from fracture stimulations in horizontal wellbores and may not be indicative of longer term production performance. Individual well performance can vary.
DRILLING INVENTORY
The Company's drilled and drill-ready light oil horizontal drilling inventory is outlined below:
Cardium Prospect Area (number of drilling locations) Gross Net (i)Garrington 115 87Willesden Green 119 86Ferrier 27 17Pembina 50 17 -----------------------------Total Cardium inventory 311 207Cardium oil wells drilled to March 15, 2013 79 59 -----------------------------Remaining Cardium inventory 232 148Horizontal prospect inventory in other zones 108 62----------------------------------------------------------------------------Remaining Cardium and other zone inventory, March 15, 2013 340 210----------------------------------------------------------------------------
