Tamarack Valley Energy (TVE-V) June 2nd '14 had record corporate production as a result of the successful 2014 drilling program. Based on field estimates, Tamarack has averaged 5,850 boe/d during the last 7 days of May 2014. Although Tamarack has been affected by production curtailments due to un-scheduled third party facility downtime in central Alberta, stronger than budgeted results from the Company's accelerated program is expected to make up for the majority of the production curtailments. Based on the current outlook, Tamarack expects to achieve its original average production forecast of 4,700 boe/d during the first half of 2014 and reiterates its annual average production between 5,300 and 5,500 boe/d for 2014.
The Company estimates that production was curtailed by approximately 300 boe/d during the months of April and May. About half of this production is back on-line as of the end of May, with the remaining production not expected to be on until mid-third quarter of 2014.The Company expects the second quarter of 2014 will be its most active quarter for drilling and completion operations. At times during the second quarter Tamarack had four drilling rigs in operation. During the first two months of the second quarter the Company drilled 16 (15.4 net) wells bringing the totals to date for 2014 to 27 (23.5 net) wells. During the months of April and May, 2014, the Company brought on production 9 (6.3 net) Cardium wells and 7 (6.7 net) Viking oil wells with an additional 4 (3.6 net) Cardium wells to drill and 9 (7.3 net) Viking oil wells to be fracture stimulated in June 2014.
Cardium Operations Update
Tamarack has maintained operations with the same two rigs, drilling Cardium wells since early in the first quarter of 2014. To date the Company has drilled 9 (6.3 net) Cardium wells in the Garrington and greater Pembina area of Alberta. All 9 wells have been fracture stimulated and are on production, including two on flow-back which will require the construction of permanent facilities expected to take place in June, 2014. The Company is currently drilling the first of two 1-mile wells in the Blue Rapids area and the first of two 1-mile wells in the Wilson Creek area. All four of these wells are expected to be drilled by the end of the second quarter with fracture stimulations to occur early in the third quarter. Also late in the third quarter, Tamarack will be participating in the drilling of 4 (2 net) Cardium wells in the Wilson Creek area from the same pad.
Tamarack has been very encouraged with the initial drilling results in the greater Pembina area. Based on results to date from the first 11 wells drilled in the farm-in area, Tamarack is achieving 19-25% higher production rates during the first 120 days of production than was originally budgeted.
The Company has also continued to consolidate working interests in the greater Pembina area. It has entered into agreements to secure another 3.5 net sections of undeveloped land in addition to the 8 sections of land added through multiple deals during the first quarter of 2014. To date the Company has added a total of 28.8 net Cardium drilling locations bringing the total to 181.5 net low risk horizontal Cardium inventory across its 211,408 net undeveloped acres. The 28.8 net new locations more than replaced this year's Cardium horizontal drilling activity.
Viking Operations Update
During the next week, Tamarack will be completing its largest ever Viking oil drilling program almost one full quarter ahead of expectations. In all, 13 (12.2 net) Viking oil wells have been drilled with the remaining 3 (1.8 net) wells expected to conclude drilling operations within the next 7 days. Currently 7 (6.7 net) wells are on production with the remaining 9 (7.3 net) wells expected to be placed on production by the end of the second quarter. Three of the wells drilled were 1-mile horizontal wells.
Tamarack is also very encouraged with this program's early production results. Based on results to date, Tamarack expects to achieve approximately 40-50% higher rates on average per well during the first 120 days of production than was originally budgeted. Some of this benefit is a result of including production from the three 1-mile wells, the improvements to the fracture stimulation design and the higher rock quality that the Company had focused this drilling program on. |
