CALGARY, ALBERTA--(Marketwired - Jan. 16, 2017) - NuVista Energy Ltd. ("NuVista" or the "Company") (TSX:NVA) is pleased to announce a number of updates that demonstrate successful execution of our 2016 plans and strong progress towards our 2017 and beyond plans. Our 2016 full year and fourth quarter guidance expectations have all been met or exceeded, as well results and costs continue to improve and outperform. Specific highlights include the following:
|New Well IP30 Results(1)|
|Well||Raw Gas||Condensate||Total Sales||CGR |
|(1)||Based on field-estimated production data|
|(2)||Typecurves are based on NuVista's internal best estimates|
2017 Outlook and Guidance Reaffirmed
Guidance for 2017 remains as previously announced with capital spending anticipated in the range of $260 - $300 million and production expected in the range of 28,000 - 31,000 Boe/d despite the planned 5 year cycle maintenance outages at the Simonette and K3 gas plants in 2017 causing a total negative annualized impact of approximately 3,000 Boe/d, primarily in the second and third quarter. These outages have planned durations of four and five weeks respectively, and existing crossover pipelines will be utilized during each outage to minimize the downtime impact by redirecting some production to other facilities. Due to some uncertainty on quarterly phasing of the outages, our guidance is 26,000 - 29,000 Boe/d for each of the first three quarters of 2017. The fourth quarter of 2017 is targeted to average 32,500 - 35,000 Boe/d after the 2017 plant maintenance work is complete, an increase of approximately 40% from fourth quarter 2016. We will update phasing for the first three quarters of 2017 as outage dates and durations become final.
November was unusually warm and wet in the Wapiti and Grande Prairie area. This caused poor road and lease conditions, preventing the moving of drilling rigs and heavy equipment. As a result of commencing our winter activity ramp-up approximately one month late, we had to modify our plans to temporarily add one extra rig in order to finish our winter drilling program prior to the spring breakup season. As a result, NuVista is presently drilling with five rigs and our schedule is back on track. We expect to bring approximately five new development wells on production in Wapiti during the first quarter of 2017 as per our original expectations. We anticipate drilling approximately 12-15 wells during the first quarter of 2017.
NuVista has top quality assets and a management team focused upon relentless improvement. We are excited to continue pursuing our 5 year growth plan to 60,000 Boe/d. We would like to thank our staff, contractors, and suppliers for their continued dedication and delivery, and we thank our board of directors and our shareholders for their continued guidance and support. Please note that our corporate presentation is being updated and will be available at www.nuvistaenergy.com on January 17, 2017.
ADVISORIES REGARDING OIL AND GAS INFORMATION
This news release contains the term barrels of oil equivalent ("Boe"). Natural gas is converted to a Boe using six thousand cubic feet of gas to one barrel of oil. Boe's may be misleading, particularly if used in isolation. The foregoing conversion ratios are based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As well, given than the value ratio based on the current price of crude oil to natural gas is significantly different from the 6:1 energy equivalency ratio, using a conversion ratio on a 6:1 basis may be misleading as an indication of value. National Instrument 51-101 - Standards of Disclosure for oil and gas activities includes condensates within the product type of natural gas liquids ("NGLs"). We have disclosed condensate values separate from our NGLs as we believe it provides a more accurate description of our operations and results therefrom.
NuVista has presented certain type curve information for the Bilbo and Elmworth areas. For each of the Bilbo and Elmworth areas the type curve information presented is based on NuVista's historical production in the Bilbo and Elmworth development blocks, in addition to production history from analogous Montney developments located in close proximity to the Wapiti area. Such type curve information is useful in understanding management's assumptions of well performance in making investment decisions in relation to development drilling in the Montney area and for determining the success of the performance of development wells; however, such type curve information is not necessarily determinative of the production rates and performance of existing and future wells and such type curves do not reflect the type curves used by our independent qualified reserves evaluator in estimating our reserves volumes. The type curves used in our most recent independent reserves evaluation as of December 31, 2015 for the Bilbo and Elmworth area had a lower estimate of estimated ultimate recovery than the type curve information presented herein.
Any reference in this news release to initial production rates such as IP30 are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are caution not to place reliance on such rates in calculating the aggregate production for NuVista.
ADVISORY REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements, including management's assessment of NuVista's future strategy, plans, opportunities and operations, forecast production and production mix, the impact of anticipated scheduled plant outages, capital spending, our hedging policy and plans, IP30 rates and typecurves and well performance, drilling plans, future operating costs, the timing, allocation and efficiency of NuVista's capital program and the results therefrom, and anticipated potential and growth opportunities associated with NuVista's asset base.
By their nature, forward-looking statements are based upon certain assumptions and are subject to numerous risks and uncertainties, some of which are beyond NuVista's control, including the impact of general economic conditions, industry conditions, current and future commodity prices, currency and interest rates, anticipated production rates, borrowing, operating and other costs and funds from operations, the timing, allocation and amount of capital expenditures and the results therefrom, anticipated reserves and the imprecision of reserve estimates, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, competition from other industry participants, availability of qualified personnel or services and drilling and related equipment, stock market volatility, effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties; the ability to access sufficient capital from internal sources and bank and equity markets; and including, without limitation, those risks considered under "Risk Factors" in our Annual Information Form.