|By Marketwired .||
|January 14, 2014 05:18 PM EST||
CALGARY, ALBERTA -- (Marketwired) -- 01/14/14 -- Delphi Energy Corp. (TSX: DEE) ("Delphi" or the "Company") provides the following operations update on its Montney capital program.
Delphi is pleased to announce completion and clean-up test results on its initial exploration well at 11-17-59-22 W5M ("11-17") on the South Bigstone Montney farm-in lands, part of the Company's contiguous 122 section land position in the Bigstone area. The 11-17 Montney horizontal well is located approximately 13 kilometres south of the Company's ongoing drilling activity at East Bigstone. The well was drilled as a whipstock operation from the Duvernay stratigraphic drill with a horizontal lateral length in the Montney of 1,848 metres (most similar to the initial East Bigstone slickwater evaluation well at 15-10-60-23 W5M ("15-10") with a horizontal lateral length of 1,424 metres).
After successfully placing all 26 stages of the fracture stimulation, the well flowed on clean-up over an eight day period, recovering approximately 34 percent of the initial frac load water. During the last 24 hours of clean-up flow, the well averaged 4.4 million cubic feet per day ("mmcf/d") of raw natural gas and 165 barrels per day ("bbls/d") of field condensate (42 bbls/mmcf of sales gas). With estimated natural gas liquids ("NGL") plant recoveries of 35 bbls/mmcf of sales gas, total production over this time period was 962 barrels of oil equivalent per day ("boe/d"). For comparison purposes, Delphi's 15-10 well produced at an average rate of 957 boe/d, consisting of 4.6 mmcf/d of raw natural gas, approximately 118 bbls/d of wellhead condensate (47 bbls/mmcf of sales gas) and an estimated 151 bbls/d of gas plant recovered NGLs over the final 24 continuous hours of its seven day clean-up test. Total production at 15-10 over the first 30 days was approximately 991 boe/d.
The 11-17 well is expected to be pipeline connected and on production in the third quarter of 2014 and consistent with the Company's other slickwater fracture stimulated wells, will continue to recover load water over the next several months of production. The test results at 11-17 validate the reservoir rock quality and liquids-rich nature of the production mix as being consistent with East Bigstone, 13 kilometres to the north. Based on this test result, Delphi expects to begin development of the Montney play in South Bigstone in the latter part of 2014, employing the same 2,500 to 3,000 metre horizontal well lengths and 30 stage fracs as employed in the ongoing Montney development program at East Bigstone.
At East Bigstone, Delphi has now drilled a total of ten horizontal Montney wells of which nine are extended-reach horizontal laterals with lengths up to 3,000 metres. Since changing completion techniques from conventional oil fracs on the first three wells to a slickwater hybrid fracturing technique, the Montney wells at East Bigstone have exceeded the Company's expectations.
The previously announced 15- 30-60-22 W5M ("15-30") well, the most recent to be placed on production, with a horizontal length of 3,014 metres, has produced at a Company record high rate of 2,076 boe/d over the first 30 days of production. During this initial 30 day period, the 15-30 well produced at an average rate of 8.3 mmcf/d of raw gas, 566 bbls/d of wellhead condensate (76 bbls/mmcf of sales gas) and an estimated 272 bbls/d of shallow cut plant NGL production. For comparison purposes, Delphi's Montney producer at 10-27-60-23 W5M ("10-27") located five kilometres to the west of 15-30, produced at an average rate of 1,815 boe/d over the first 30 days of production, consisting of 6.8 mmcf/d of raw gas, 582 bbls/d of wellhead condensate and shallow cut plant NGL production of 222 bbls/d. The 10-27 well has produced 319,000 boe (120,000 barrels of total NGL, 65 percent of which is field condensate) since coming on production in March 2013.
The table below illustrates the significant impact the slickwater hybrid fracturing technique has had on well performance at Bigstone in comparison to smaller conventional frac methods. Well performance during the initial 30 days of production has almost doubled, as observed in the 15-30 and 16-30 production performance where the two wells are approximately 400 metres (one spacing unit) apart. Longer term production performance has tripled when observing production rates after 180 days. Wellhead condensate production and yields have also improved by two to three times.
To view the table associated with this release, click the following link: http://media3.marketwire.com/docs/del_table1.jpg
The Company continues optimizing capital efficiencies through its extended-reach drilling plan targeting horizontal lateral lengths between 2,500 and 3,000 metres. In the table above, the East Bigstone wells are sorted on horizontal lateral lengths illustrating that lateral length is an important driver in enhancing well production performance.
The adjacent cumulative production plot illustrates the step change in well performance experienced with extended-reach horizontal lateral sections stimulated with the slickwater hybrid fracturing technique as compared to conventional gelled oil fracs. The wells continue to exceed the Company's initial type curve expectations (illustrated by the blue dashed line). Given the exceptional well performance to date, Delphi plans to re-evaluate its base type curve assumptions after the winter drilling program.
To view the graph associated with this release, click the following link: http://media3.marketwire.com/docs/del_graph1.jpg
Drilling operations continue in East Bigstone with two additional wells now drilled and one to two more wells planned prior to break-up in 2014. The 15-21-60-23 W5M ("15-21") Montney well has been drilled to a total depth of 5,875 metres with a horizontal lateral length of 2,886 metres and is in the process of being stimulated with a 30 stage slickwater hybrid completion. The 13- 30-60-22 W5M ("13-30") Montney well has recently reached its planned total depth of 5,419 metres in a Company record 27 days, with a horizontal lateral length of 2,593 metres. The 13-30 well is scheduled to be completed in the first two weeks of February.
To handle the rapidly growing Montney production volumes, the Company is continuing with construction to expand its 7-11 facility to handle 45 mmcf/d of raw gas as well as increased field condensate volumes with the installation of larger inlet separation and increased condensate storage tank capacity.
As previously announced late in 2013, Delphi has entered into a Gross Overriding Royalty ("GOR") agreement to partially fund the drilling of ten Montney wells in East Bigstone over the next 12 to 18 months. The parties purchasing the GOR ("Royalty Owners") will contribute $25.0 million over this time frame towards seven wells scheduled to be drilled in 2014 ($17.5 million) and have an option on the first three wells of 2015. The Royalty Owners will be granted a GOR on the Company's working interest revenue on the wells until an agreed upon rate of return is achieved, at which time the GOR will be extinguished on all wells.
Also as previously announced, Delphi's lenders (National Bank of Canada, Bank of Nova Scotia and Alberta Treasury Branches) completed their semi-annual review of the Company's credit facilities, renewing the existing $140.0 million revolving credit facility. The facility is a 364 day committed facility available on a revolving basis until May 26, 2014 at which time it may be extended at the lenders' option upon completion of the annual review to determine the borrowing base. The annual review will be based upon the Company's December 31, 2013 reserve report, the results of the winter drilling program and the lenders' view of commodity prices.
The GOR funding, expected funds from operations for 2014 and reconfirmation of the Company's credit facility provide the financial resources for the Company to carry out its planned 2014 capital program.
Delphi reiterates its market guidance for 2014 but expects to review it as additional results of the winter drilling program are evaluated. Corporate production is forecast to grow 20 percent compared to 2013, predominantly from a Montney focused capital program with its superior netbacks, resulting in expected cash flow growth of 49 percent. Delphi is estimating production to average 9,500 to 10,000 boe/d on a net capital program of $67 to $72 million, drilling a total of seven Montney horizontal wells at Bigstone. Total debt at year end 2014 is expected to be between $145.0 and $150.0 million versus between $135.0 and $140.0 million at the end of 2013. The total debt to funds flow ratio is forecast to drop to 2.2 times in the fourth quarter of 2014 and reach a targeted 1.5 times in 2015. Delphi expects AECO natural gas prices to average approximately Cdn. $3.35 per mcf and Edmonton light oil prices to average approximately Cdn. $93.50 per barrel resulting in cash flow for 2014 of approximately $55.0 to $60.0 million. Currently, the Company has approximately 60 percent of its natural gas production hedged at an average price of $3.63 per mcf for 2014 and approximately 27 percent of its crude oil and condensate production hedged at a floor price of Cdn $96.03 per barrel for the first half of 2014.
Delphi's business plan contemplates production growth to 20,000 boe/d by 2017, with targeted annual production per share growth of 25 percent and annual cash flow per share growth of 45 percent. Capital spending over the five years to achieve that result under the plan is projected to be $560 million, funded 90 percent from cash flow to drill 50 Montney horizontal wells and fund the expansion of Delphi's 100 percent owned facility. The contemplated 50 well drilling program represents less than half of the current development drilling inventory on approximately 50 percent of Delphi's current Montney undeveloped land holdings. The Company now has a current project inventory that will provide economic growth beyond a 10-year horizon. Over this time period, the Company's balance sheet is forecast to continually strengthen, with internally generated cash flow funding the majority of the capital expenditures on a go forward basis.
Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.
Forward-Looking Statements. This release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", may", "will", "should", believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this management discussion and analysis contains forward looking statements and information relating to the Company's risk management program, petroleum and natural gas production, future funds from operations, capital programs, commodity prices, costs and debt levels. The forward-looking statements and information are based on certain key expectations and assumptions made by Delphi, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the capital availability to undertake planned activities and the availability and cost of labour and services.
Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. Additional information on these and other factors that could affect the Company's operations or financial results are included in reports on file with the applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. Delphi undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Basis of Presentation. For the purpose of reporting production information, reserves and calculating unit prices and costs, natural gas volumes have been converted to a barrel of oil equivalent (boe) using six thousand cubic feet equal to one barrel. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with the Canadian Securities Administrators' National Instrument 51-101 when boes are disclosed. Boes may be misleading, particularly if used in isolation.
As per CSA Staff Notice 51-327 initial test results and initial production performance should be considered preliminary data and such data is not necessarily indicative of long-term performance or of ultimate recovery.
Non-IFRS Measures. The release contains the terms "funds from operations", "funds from operations per share", "net debt", "operating netbacks" "cash netbacks" and "netbacks" which are not recognized measures under IFRS. The Company uses these measures to help evaluate its performance. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices. Management uses funds from operations to analyze performance and considers it a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations is a non-IFRS measure and has been defined by the Company as cash flow from operating activities before accretion on long-term debt, decommissioning expenditures and changes in non-cash working capital. The Company also presents funds from operations per share whereby amounts per share are calculated using weighted average shares outstanding consistent with the calculation of earnings per share. Delphi's determination of funds from operations may not be comparable to that reported by other companies nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. The Company has defined net debt as the sum of long term debt plus/minus working capital excluding the current portion of the fair value of financial instruments plus the long term portion of the restricted share units ("RSU"). Net debt is used by management to monitor remaining availability under its credit facilities. Operating netbacks have been defined as revenue less royalties, transportation and operating costs. Cash netbacks have been defined as operating netbacks less interest and general and administrative costs. Netbacks are generally discussed and presented on a per boe basis.
Delphi Energy Corp.
David J. Reid
President & CEO
(403) 265-6207 (FAX)
Delphi Energy Corp.
Brian P. Kohlhammer
Senior VP Finance & CFO
(403) 265-6207 (FAX)
Delphi Energy Corp.
300, 500 - 4 Avenue S.W.
Calgary, Alberta T2P 2V6
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...
May. 6, 2016 07:00 AM EDT Reads: 1,217
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 6, 2016 07:00 AM EDT Reads: 1,065
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
May. 6, 2016 06:00 AM EDT Reads: 1,517
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
May. 6, 2016 04:00 AM EDT Reads: 1,338
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
May. 6, 2016 02:45 AM EDT Reads: 1,301
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
May. 6, 2016 02:00 AM EDT Reads: 1,419
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
May. 6, 2016 01:45 AM EDT Reads: 1,435
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
May. 6, 2016 01:30 AM EDT Reads: 1,401
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
May. 6, 2016 01:00 AM EDT Reads: 1,264
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
May. 6, 2016 12:00 AM EDT Reads: 1,490
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
May. 5, 2016 11:30 PM EDT Reads: 1,364
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
May. 5, 2016 05:00 PM EDT Reads: 1,288
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
May. 5, 2016 05:00 PM EDT Reads: 1,387
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
May. 5, 2016 04:00 PM EDT Reads: 798
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
May. 5, 2016 04:00 PM EDT Reads: 1,210