Calgary-based Whitecap Resources Inc. (Toronto: WCP.TO) is pleased to announce a 15% increase to its credit facilities from $520 million to $600 million in addition to providing shareholders with an update on successful capital execution thus far in 2013. Third quarter operational results have once again exceeded expectations with average production over 1,000 BOE per day above the company's 20,000 BOE per day production forecast providing it with the opportunity to increase the average 2013 production guidance of 19,200 BOE per day to 19,500 BOE per day.
Whitecap was very active in the field, drilling a total of 35 (27.0 net) wells in the third quarter of 2013 while spending approximately $65.5 million in development capital. Year-to-date, the company has drilled a total of 90 (68.1 net) wells with a 100% success rate.
West Central Saskatchewan - Viking Light Oil
In the third quarter of 2013,Whitecap drilled 21 (15.7 net) Viking horizontal oil wells including three (2.4 net) wells drilled late in the third quarter on the recently acquired Eagle Lake property which closed in May 2013, bringing the total for the year to 43 (34.5 net) wells. In the Lucky Hills area, costs to drill, complete and equip (DC&E) averaged $810,000 per well, a 7% reduction compared to type curve costs of $875,000 per well along with the company's cycle times (spud to on production) improving to 11 days per well. The average IP (30) oil rates in the third quarter were 121 barrels of oil per day (bpd) compared to 90 bpd in the first quarter 2013 and 68 bpd in 2012. The recent Viking wells have payout periods of less than 10 months per well.
Since Whitecap's initial entrance into the Viking light oil play in February 2012, the company has reduced operating costs in the Lucky Hills area by more than 15% to the current $8.50/BOE. The decrease is a direct result of operational diligence in consolidating and optimizing our production infrastructure and continued focus on maximizing the cash flow netback on the assets as Whitecap grows the production.
West Central Alberta - Garrington (Cardium Light Oil)
In the third quarter of 2013, the company drilled 5.0 (3.3 net) Cardium horizontal oil wells including two (2.0 net) extended reach horizontal (ERH) wells bringing the total for the year to 24 (13.3 net) wells. The results from the three standard length horizontal wells have been consistent with expectations.
The horizontal producing sections of our two ERH wells are 1.5 times longer than the standard horizontals wells with average IP(30) rates that are 2.3 times higher than the standard length horizontal wells at 781 BOE per day. The exceptional economics result in payout of capital per well occurring within 120 to 160 days. As a result of this step change to the company's economics, Whitecap has increased the 2013 capital budget to include one additional ERH well that has now been drilled and placed on production. For each ERH well, the company forecasts 1.5 times increase in productivity with DC&E costs of $3.5 million per well.
West Central Alberta - Greater Pembina (Cardium Light Oil)
In the greater Pembina area the company drilled six (5.5 net) Cardium horizontal oil wells of which five were in east Pembina, bringing the total for the year to 15 (14.0 net) wells. Current average DC&E costs in east Pembina have averaged $2.3 million per well, 10% lower than current type well economics.
Five wells drilled in east Pembina were on lands acquired in the third quarter of 2013 for $14.0 million which included 25 (24.0 net) Whitecap-identified horizontal Cardium development drilling locations. The IP(30) rates from the five wells drilled on the acquired lands were 32 percent higher than the previous 12 wells in the immediate area (286 BOE per day compared to 217 BOE per day).
In addition to the drill bit success in east Pembina, Whitecap constructed and brought on line a 100% working interest battery and gas handling facility in its Ferrier area, eliminating the need to utilize third party facilities.
Peace River Arch
Deep Basin - Dunvegan Light Oil
Since 2012, the company has been acquiring land and drilling opportunities in the emerging Dunvegan light oil horizontal development play and to date has spent approximately $38.0 million including $15.1 million in the third quarter of 2013 through a series of asset acquisitions. Whitecap drilled its first well in December 2012 and has now drilled a total of five (4.4 net) Dunvegan horizontal oil wells including four (3.4 net) wells in 2013. The wells drilled in the Deep Basin have met or exceeded our type curve expectations with average DC&E costs per well of $3.5 million with shallower decline profiles and higher stabilized rates relative to the Cardium and Viking wells.
The company currently has an inventory of 83 (79.5 net) Dunvegan light oil development locations which complement our high growth Viking and Cardium resource inventory for long term growth and sustainability.
Valhalla - Montney Light Oil
No wells were drilled in the third quarter as Whitecap focused on Phase 2 of our waterflood expansion on the northwest portion of the pool with water injection commencing in early October 2013. This expansion includes an additional 800 acres in the northwest portion of the pool under waterflood that has had no previous water injection and very little production. The company will continue to monitor incremental waterflood response as we move through the balance of 2013 and into 2014.
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