Orion Announces Operations Update From Its Winter Development Program
10:51 AM ET, March 18, 2010
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CALGARY, ALBERTA, Mar 18, 2010 (Marketwire via COMTEX) -- Orion Oil & Gas Corporation (OIP) ("Orion" or the "Company") today announced an operations update from its 2009/2010 winter development program (the "Winter Program") at its Alberta properties held by its wholly-owned subsidiary, Orion Oil & Gas (North America) Ltd. ("Orion N.A.").
Operations Update
The Winter Program commenced in November 2009 and included drilling six wells at its Kaybob property and eleven wells at its Redwater property, and a workover program at its Bigstone property. All six wells at Kaybob are now on production. Seven of the eleven wells at Redwater are on production with the remaining four completions and tie-in programs in progress. The Bigstone workover is expected to be completed before the end of March.
Current Orion production is 4,000 boe/d, up 68% from Q4 2009 average production of 2,384, and 59% from the 2009 full year average of 2,514 boe/d. The production increase is a direct result of the successful execution of the Winter Program. Additional production increases are planned related to the aggressive capital program that Orion has in place for 2010, which is fully funded from forecasted cash flow and Orion's $50 million credit facility.
The Company has had 100% drilling success in its Winter Program. The combined results of new drills and workovers are expected to add from 1,600 -2,000 boe/d production by the end of Q1 2010. Orion expects to exit Q1 2010 with between 4,000 and 4,500 boe/d of production, based on results to date and the forecasted production with Bigstone and finishing the tie-ins of Redwater new drills from its Winter Program.
Kaybob
At Kaybob, all 6 wells have been drilled, cased and are on production. Well costs at Kaybob are estimated at $4 million per well to drill, complete, equip, and tie-in. All six wells have or are estimated to come in on or under budget.
Orion plans to drill an additional six to ten wells at Kaybob in 2010. Wells at Kaybob typically produce 110 - 120 bbl/mmcf of condensate and natural gas liquids, and have an initial production rate of between 200 to 300 boe/d. The remaining wells planned for 2010 are scheduled to be drilled after break-up.
Redwater
At Redwater, Orion has finished drilling eleven wells in its Winter Program. Seven of the eleven wells drilled in the Winter Program are now on production and are producing 330 boe/d. The remaining four wells are awaiting completion and/or tie-in. Production from the eleven wells was expected to add 220-275 boe/d by the end of Q1 2010 and is currently exceeding expectations The program costs were on budget.
Orion plans to drill an additional ten to twelve wells at Redwater in 2010. Wells at Redwater produce 28 API crude, with a small amount of associated gas, and typically have an initial production rate of between 20 to 25 boe/d. The remaining wells planned for 2010 are scheduled to be drilled after break-up.
Bigstone
At Bigstone, three wells previously shut in are being brought back on production. A workover has been performed on one well and start-up plans are progressing for all three producers and the in-field water disposal system. These operations are expected to bring an additional 300 - 400 boe/d onstream at Bigstone by the end of Q1 2010.
Summary Information Relating to Orion
Orion is engaged in the exploration for and development of oil and natural gas interests located primarily in the Kaybob, Redwater and Bigstone areas of Alberta. Orion's current production is 4,000 boe/d, which is comprised of approximately 45% light oil and natural gas liquids and 55% natural gas. At its Kaybob property, a natural gas condensate field, Orion operates and has a 91% working interest in 25,600 gross acres. At its Redwater property, a light oil field, Orion operates and has an 82% average working interest in 8,786 gross acres. At its Bigstone property, a natural gas field, Orion operates and has a 100% working interest in 1,920 acres. Orion is operator at its Kaybob, Redwater and Bigstone properties and has sufficient capital to fully fund the development of its properties.
MEANING OF BOE: When used in this press release, boe means a barrel of oil equivalent on the basis of 1 boe to 6 thousand cubic feet of natural gas. Boe/d means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. |
