Painted Pony Petroleum (PPY-V) is providing an update on current Montney production results, and is releasing its financial and operating results for the three- and nine-month periods ending Sept. 30, 2013.
Highlights include:
- Production on the recently drilled 50-per-cent working interest lower Montney well at Daiber d-D44-C/94-B-16 has been flowing in line for the last seven days at a sustained rate of 14.8 million cubic feet per day or 2,460 barrels of oil equivalent per day, of which 1,230 barrels of oil equivalent per day is net to Painted Pony.
- A 100-per-cent-working-interest, liquids-rich lower Montney well at Townsend a-A11-J/94-B-09, which produced intermittently during the third quarter, has now been on stream since Oct. 30, 2013, at an estimated average production rate of approximately 1,460 barrels of oil equivalent per day (8.0 million cubic feet per day plus associated natural gas liquids of 20 barrels per million cubic feet per day).
- Production for the third quarter of 2013 averaged 8,925 barrels of oil equivalent per day, weighted 83 per cent toward natural gas, an increase of 41 per cent over the third quarter of 2012.
- In addition, the company estimates volumes in excess of 2,500 barrels of oil equivalent per day are currently shut in and expected to come on production in the fourth quarter of 2013 and first quarter of 2014.
- The company generated third quarter funds flow from operations of $12.2-million, representing an increase of 44-per-cent over the third quarter of 2012.
- It achieved funds flow from operations of 14 cents per basic and diluted share in the third quarter, an increase of 17 per cent over the third quarter of 2012.
- Painted Pony realized third quarter wellhead natural gas prices of $2.95 per thousand cubic feet of natural gas, which represents a premium of more than 20 per cent to the AECO reference price of $2.44 per thousand cubic feet of natural gas.
- It generated average third quarter field operating netbacks of $16.75 per barrel of oil equivalent.
- The company entered into a syndicated credit facility agreement for $125-million backed by three Canadian financial institutions.
Montney natural gas operations
Painted Pony continues to pursue the development and expansion of its Montney natural gas assets in northeast British Columbia. During the third quarter of 2013, the company drilled three (2.5 net) horizontal Montney wells, including two (2.0 net) 100-per-cent-working-interest wells at Blair and one (0.5 net) well at Daiber. For the nine months ended Sept. 30, 2013, the company has participated in the drilling of nine (6.1 net) horizontal Montney wells.
The company remains encouraged by the results of the ball-drop completion technology. To date, Painted Pony has used the ball-drop completion system on six (5.0 net) of its recently drilled Montney wells, including two (2.0 net) wells on the Townsend 11-J/94-B-09 pad, two (1.0 net) wells on the Daiber 44-C/94-B-16 pad and single wells on each of the Blair 91-F/94-B-16 and 14-F/94-B-16 pads. The company has realized cost savings using the ball-drop system of approximately $700,000 per well and increased production performance, in comparison with the perf-and-plug method.
Daiber
At Daiber, in the third quarter of 2013, the company drilled one (0.5 net) horizontal well targeting the upper Montney at d-C44-C/94-B-16 and in October, 2013, the company drilled one (0.5 net) horizontal well targeting the lower Montney, at d-D44-C/94-B-16. The lower Montney well has been flowing in line for the last seven days at a sustained rate of 14.8 million cubic feet per day (please refer to the company's news release dated Nov. 4, 2013). Processing volume at Painted Pony's Daiber 44-C facility has reached maximum capacity from current production from two of the three lower Montney producers on this pad.
Townsend
The 100-per-cent-working-interest lower Montney well at Townsend a-A11-J/94-B-09, which produced intermittently during the third quarter, has resumed production following infrastructure modifications. This liquids-rich well has now been on stream since Oct. 30, 2013, at an average production rate of 8.0 million cubic feet per day, including an estimated 20 barrels per million cubic feet of natural gas liquids, representing 1,460 barrels of oil equivalent per day.
The company remains pleased with successful drilling results at Townsend and, on Nov. 3, 2013, the company spudded the first of three 100-per-cent-working-interest wells at Townsend on the 56-H/94-B-09 pad as part of its fourth quarter 2013 drilling program. These wells will target the upper, middle and lower Montney zones, and are expected to be completed and tied into production facilities in the first quarter of 2014.
Blair
During the third quarter of 2013, at Blair, the company drilled one (1.0 net) horizontal well targeting the lower Montney at b-C14-F/94-B-16 and one (1.0 net) horizontal well targeting the middle Montney at b-B14-F/94-B-16. These two wells were tied in and commenced production in November, 2013.
As previously announced, the ball-drop completion technology system was employed as an alternative to the conventional perf-and-plug system at the Blair 91-F/94-B-16 pad. The ball-drop well at a-A91-F/94-B-16 produced approximately 575 million cubic feet of natural gas over its initial three-month period, whereas the perf-and-plug well at a-91-F/94-B-16 produced approximately 416 million cubic feet of natural gas over the same time frame. Both 91-F/94-B-16 wells are upper Montney horizontal wells. These results represent a 38-per-cent increase in production volumes attributable to the ball-drop system.
Light oil operations
In Saskatchewan, Painted Pony has participated in the drilling of three (1.4 net) wells to date in 2013, including two (0.8 net) Bakken wells at Flat Lake. Painted Pony continues to maintain an inventory of light oil opportunities, focusing on the development of lower-risk projects in southeastern Saskatchewan. A further five (3.1 net) wells are expected to be drilled during the balance of this year. These wells will target a mix of plays, including the Bakken, Frobisher and Midale zones.
Financial results
During the third quarter of 2013, Painted Pony achieved funds flow from operations of $12.2-million, while funds flow from operations for the nine months ended Sept. 30, 2013, was $38.9-million, representing an increase of 44 per cent over the same periods in 2012. The company continues to realize high field operating netbacks from its core properties in both northeast British Columbia and southeast Saskatchewan. The company achieved a field operating netback of $11.12 per barrel of oil equivalent in northeast British Columbia, an increase of 24 per cent over the third quarter of 2012. In Saskatchewan, the company generated a third quarter field operating netback of $56.20 per barrel of oil equivalent, a 38-per-cent increase from $40.84 per barrel of oil equivalent realized in the third quarter of 2012.
Capital expenditures for the third quarter of 2013 were $39.1-million, which included drilling and completions costs of $25.0-million, and facility and equipment costs of $9.1-million. As at Sept. 30, 2013, Painted Pony had a working capital deficiency of $20.7-million. |
