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Delphi Energy Corp
Symbol DEE
Shares Issued 185,547,351
Close 2018-04-23 C$ 0.92
Market Cap C$ 170,703,563
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Delphi Energy produces 9,515 boe per day in Q1

2018-04-24 09:36 ET - News Release

Mr. David Reid reports

DELPHI ENERGY ANNOUNCES SUCCESSFUL WEST BIGSTONE TEST AND COMMISSIONING OF THE BIGSTONE MONTNEY PHASE I AMINE FACILITY AHEAD OF SCHEDULE

Delphi Energy Corp. has provided an operations update after completing its planned winter capital program.

A figure associated with this news release is available on-line.

Operations update

Delphi has completed its 2018 winter capital program, including the company's Bigstone Montney amine processing facility, the drilling of four (2.6 net) new Montney wells, and the completion of seven (4.6 net) new wells. The extended winter conditions have allowed the company to get all seven wells connected by pipeline to its facilities, with plans to have all the wells on production in the second quarter.

The 16-10-60-24W5 (16-10) well is the first horizontal Montney well drilled at West Bigstone in more than six years. After completion, the 16-10 well was flowed on cleanup for 3.4 days, recovering approximately 21 per cent of the initial load frack water. Over the last 24 hours prior to running production tubing, the well flowed at an average rate of 7.2 million cubic feet of natural gas per day (mmcf/d) of raw gas and 1,605 barrels per day (bbl/d) of 44-degree API field condensate (255 bbl/mmcf of sales gas). Total sales production rate for 16-10 over this 24-hour period was approximately 2,928 barrels of oil equivalent per day (boe/d) (64 per cent liquids), including an estimated plant natural gas liquid (NGL) yield of 44 bbl/mmcf of sales gas. The well is expected to commence production in May through Delphi's 100-per-cent-owned Negus sweet gas plant in West Bigstone. Based on this success, the company is planning to follow up with additional drilling at West Bigstone in the second half of 2018.

The 15-19-59-23W5 well (15-19) drilled to evaluate Delphi's central land block within the Bigstone Montney asset was brought on production in March and has recently achieved an average production rate over the first 30 days (IP30) of 1,828 boe/d (62 per cent liquids), consisting of 950 bbl/d field condensate, 182 bbl/d of NGLs and 4.2 mmcf/d of sales gas. The 16-19 offset well has now been drilled and completed.

The company's recently commissioned phase I amine processing facility is capable of sweetening up to 17 mmcf/d of gross raw Montney natural gas prior to routing it through the underutilized 85 mmcf/d Bigstone sweet natural gas plant (Delphi 25-per-cent working interest) for final processing. The new facility will reduce operating costs on that production stream by approximately 80 cents per thousand cubic feet of natural gas (mcf). Corporately, operating cost savings of approximately 70 cents per barrel of oil equivalent (boe) are forecast. The amine facility is part of the company's long-term strategy to diversify its processing options, which now include the SemCAMS K3 (sour), Repsol Edson (sour), Delphi Bigstone (sweet) and Delphi Negus (sweet) processing facilities, and complements Delphi's natural gas marketing strategy that continues to insulate the company from the persistent weakness in AECO natural gas pricing.

Production update

Delphi achieved production of 9,515 boe/d (91 per cent Montney) in the first quarter of 2018, a 16-per-cent increase over the comparative quarter in 2017. Production remained relatively flat compared with the fourth quarter of 2017 as a result of better production performance of the wells drilled in 2017, largely offsetting scheduled production outages relating to new well completion operations, and new well on-stream dates beginning in March. Condensate and NGL production in the first quarter of 2018 was 5 per cent higher than fourth quarter 2017 while natural gas production was 5 per cent lower. The company's focus remains on condensate production growth driving higher revenue and cash flow. An incremental 100 bbl/d of condensate would add approximately $2.2-million to annualized cash flow. Based on liquid production in the first quarter, an increase of $5 per barrel in WTI (West Texas Intermediate) prices would add about $2.4-million to annualized cash flow.

                                         April (21 days)   Q1 2018   Q4 2017   Q1 2017
 
Condensate (bbl/d)                                2,965      2,472     2,374     1,940 
NGLs (bbl/d)                                      1,600      1,418     1,315     1,302 
Natural gas (mcf/d)                              37,500     33,746    35,391    29,737
Corporate production                             10,800      9,515     9,588     8,198 
Field condensate (percentage of total)               27         26        25        24    
Total liquids (percentage)                           42         41        38        40    

With new wells from the winter program tested or on stream, the company expects to meet its first half 2018 production guidance of 9,800 boe/d to 10,200 boe/d (40 per cent liquids).

Delphi will be releasing its Q1 results on May 9, 2018, after market close.

About Delphi Energy Corp.

Delphi Energy is an industry-leading producer of liquids-rich natural gas. The company has achieved top decile results through the development of its high-quality Montney property, uniquely positioned in the Deep basin of Bigstone, in northwest Alberta. Delphi continues to outperform key industry players by improving operational efficiencies and growing its dominant Bigstone land position in this world-class play.

We seek Safe Harbor.

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