TORC Oil & Gas Ltd. (TSE: TOG) announced Dec. 16 that its board of directors approved a 2015 capital budget of about $108 million (C$125 million).

TORC's capital program in 2015 is primarily focused on light oil development projects with the majority of the capital directed to drilling, completions and tie-ins (about 85%). The capital program is concentrated on the company's three primary core areas of the Cardium in central Alberta, Monarch in southern Alberta and southeast Saskatchewan.

TORC plans to drill 15 gross (12.8 net) wells across the company's land position in the Cardium. With more than 290 net undrilled light oil focused development locations identified, the 2015 budget represents roughly 5% of this high quality development drilling inventory. TORC's development plans for the Cardium trend represents about 50% of the company's drilling, completion and tie-in activity in 2015.

At Monarch, TORC's initial plans are to drill three gross (three net) development wells to continue to advance this large emerging resource play. TORC has exposure to more than 150 net prospective sections in the Monarch play. Monarch will comprise about 20% of the company's 2015 drilling, completion and tie-in capital budget.

In southeast Saskatchewan, TORC plans to drill 12 (six net) conventional wells representing roughly 5% of the company's currently identified conventional drilling locations. Southeast Saskatchewan conventional wells are characterized by their lower risk nature and high rates of return driven by their lower capital costs, high netbacks and the favourable royalty regime in Saskatchewan. Southeast Saskatchewan conventional activity will comprise about 10% of the company's 2015 drilling, completion and tie-in capital budget.

Also in southeast Saskatchewan, TORC plans to drill six (3.5 net) step out and three (1.5 net) development wells into the Torquay/Three Forks in 2015 as the company continues to delineate the land position in this emerging play. Activity in southeast Saskatchewan will comprise about 30% of the company's 2015 drilling, completion and tie-in capital budget.

Production Guidance

TORC anticipates that the 2015 budget will result in 2015 average production of greater than 11,950 barrels of oil equivalent per day (boe/d), about 85% light oil and liquids, with an exit rate of greater than 12,000 boe/d, about 85% light oil and liquids, representing 7% growth over estimated 2014 average production.