CALGARY, ALBERTA--(Marketwired - May 22, 2013) - NuVista Energy Ltd. ("NuVista") (TSX:NVA) is pleased to provide an update on recent Wapiti Montney well results and company production levels. Results from our latest wells illustrate the continued progression of reducing costs and improving well performance. Drilling program results continue to meet and, in some cases, exceed type curve. In particular, condensate yields have been exceeding expectations, driving better than expected economics. Progress against our previously disclosed 2013 goals and timelines is on track with a total of nine horizontal Montney wells now on production, as shown below.
|Table of Well Results|
|Original Type curve 4.4 Bcf Raw Gas|| |
|Well 1 (North)||5.5||232||1,003||42|
|Well 2 (South)||4.4||231||817||52|
|Well 3 (North)||7.3||382||1,561||52|
|Well 4 (North)||3.9||301||930||78|
|Well 5 (North)||7.8||438||1,729||56|
|Well 6 (South)||3.3||244||727||74|
|Avg. 1st 6 wells||5.4||305||1,128||59|
|Well 7 (North)|| |
|Well 8 (South)||3.1||375||900||125|
|Average of last 3 wells||5.4||525||1,425||105|
|Average of all wells||5.4||379||1,226||74|
|Cumulative to Date(4)|
|Days on |
|Sales Gas|| |
|Original Type curve 4.4 Bcf Raw Gas|| |
|Well 1 (North)||761||34||38||971||215|
|Well 2 (South)||277||39||30||690||150|
|Well 3 (North)||269||39||39||834||195|
|Well 4 (North)||222||74||36||384||109|
|Well 5 (North)||176||54||41||630||161|
|Well 6 (South)||106||70||16||198||51|
|Well 7 (North)||32||50||11||168||43|
|Well 8 (South)||31||115||13||84||28|
|Well 9 (South)||20||130||16||108||36|
|(1) Excludes non-producing days and wells 7, 8, 9 are based on field estimates|
|(2) Well 9 IP30 is based on 20 days of production|
|(3) Condensate gas ratio|
|(4) Estimated cumulative production to May 20, 2013|
We are very encouraged to see the larger slickwater fracture treatments responding positively, helping our overall results to average upwards. We also continue to enhance our geological mapping to high-grade future locations. We will continue to monitor the production from the existing and upcoming wells stimulated with the higher rates and fluid volumes to confirm the benefits. Cost control has been excellent so far on the wells stimulated with the larger slickwater volumes, with fracture completion costs averaging under $3.5 million for each of the four wells as compared to a plan of $3.9 million.
2013 Guidance Unchanged
With the previously announced startup of third-party processing in mid-April, and the contribution of the new wells, company production has increased as planned. Company production field estimates for April total 15,500 Boe/d despite only mid-month start-up of third-party processing. Production field estimates for the first 21 days of May have averaged over 18,000 Boe/d and full month production for May is estimated to be over 17,000 Boe/d with planned new well downtime for routine switchover from test equipment to permanent equipment in the last week of the month. While field estimates are a strong indicator of production volumes, they have inherent risk of greater inaccuracy than final sales volumes which follow a month later.
We are pleased to reiterate our full year 2013 production guidance range despite the downtime experienced in the first quarter of 2013 and tighten our guidance range for the first half 2013. 2013 average annual production is forecast in the range of 16,250 Boe/d to 17,000 Boe/d. In the first half of 2013, we expect to produce in the range of 15,500 Boe/d to 16,000 Boe/d, based on the actual production of 14,903 Boe/d in the first quarter of 2013 and a projected production range of 16,250 Boe/d to 17,000 Boe/d in the second quarter of 2013. Current daily production is well above this level, however wells will routinely come off hard from flush production associated with initial startup, and the timing of further new well tie-ins and fracture treatments during spring break-up is always highly weather dependent. Ground conditions in the area continue to improve allowing for resumption of activities earlier than expected if additional precipitation levels remain reasonable. A favorable weather outcome could allow us to push upwards from the mid-point of our guidance range for the second quarter.
With every well drilled, we are growing increasingly excited about the tremendous condensate-rich potential of our Montney play at Wapiti, the continued growth, and the exceptional value that is expected to be created as we increase scale and benefit from the efficiencies that come with it. We have the people, we have the assets, and now we also have the processing capacity to deliver strong results for the foreseeable future. We look forward to providing an update in early August with the release of our second quarter information. Please visit our website at www.nuvistaenergy.com to view our corporate presentation which was updated today with further details on our recent well results.
ADVISORY REGARDING OIL AND GAS INFORMATION
This news release contains the terms barrels of oil equivalent ("Boe"). Natural gas is converted to a Boe using six thousand cubic feet of gas to one barrel of oil. Boes may be misleading, particularly if used in isolation. The foregoing conversion ratio is 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.
Any references in this news release to initial production rates 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 cautioned 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; production mix; drilling, development, completion and tie-in plans and results; NuVista's assessment of field conditions; type curves; condensate and natural gas liquid yields; the timing, allocation and efficiency of NuVista's capital program and the results therefrom; the anticipated potential of NuVista's asset base; and industry conditions. 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. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. NuVista's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits NuVista will derive therefrom. NuVista disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.