Welcome!

.NET Authors: Pat Romanski, Elizabeth White, ChandraShekar Dattatreya, Trevor Parsons, Peter Silva

News Feed Item

PetroBakken Provides Operational Update and 2013 Capital and Production Guidance

CALGARY, ALBERTA -- (Marketwire) -- 01/11/13 -- PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN), is pleased to announce that average production for the month of December 2012, was 53,200 barrels of oil equivalent a day ("boepd") based on field estimates. We are also pleased to announce a $675 million capital plan in 2013 that is expected to result in an 8 to 12 percent growth in average annual production.

Operational Update

PetroBakken had a successful year in 2012. Early in the year we completed certain initiatives to strengthen our financial position and increase balance sheet liquidity. This included terming-out our debt through the issuance of US$900 million of high yield notes and disposing of approximately 4,200 boepd of non-core properties. The asset dispositions allowed us to expand our capital program during the second half of the year and more than replace the disposed production. Our 2012 December average production of 53,200 boepd represented a 6% increase over our 2011 December average (a 16% increase post dispositions) and was comprised of over 21,500 boepd from our Bakken business unit, over 22,500 boepd from our Cardium business unit, and the remainder from our Saskatchewan Conventional and AB/BC business units.

In the fourth quarter, we drilled 79 net wells, completed 106 net wells and brought 99 net wells on production, exiting the year with 21 net wells in inventory. We drilled a total of 217 net wells and completed 234 net wells in 2012. Fourth quarter activity is broken down by operating area as follows:


                                                                            
Q4 2012 Drilling Activity                                                   
                                                        On                  
                            Drilled     Completed   Production  Inventory(1)
Business Unit             Gross   Net  Gross   Net  Gross   Net  Gross   Net
----------------------------------------------------------------------------
  Bakken                     37    28     48    40     50    43      4     1
  Conventional (SE SK)       20    14     17    12     18    13      9     4
  Cardium (central AB)       37    33     60    51     49    41     17    14
  Alberta/BC                  4     4      3     3      2     2      2     2
----------------------------------------------------------------------------
Total                        98    79    128   106    119    99     32    21
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
 (1)  Inventory refers to the number of wells pending completion and/or tie-
      in at December 31, 2012.                                              

Our inventory of 14 net wells in the Cardium, 1 well in the Bakken, 4 net wells in southeast Saskatchewan, and 2 net wells in our new plays partly reflects the advancement of capital from 2013 into 2012 and will contribute to production volumes in the first quarter of 2013. We expect the first quarter of 2013 to be our busiest of the year, and we currently have 16 drilling rigs operating: 6 in southeast Saskatchewan, 7 in the Cardium and 3 in our Alberta/British Columbia emerging plays.

Of note, in our Swan Hills resource play we drilled 3 horizontal wells at Deer Mountain. 2 of the 3 net wells at Deer Mountain were completed and put on production and we are encouraged by initial results. Our capital plan for 2013 includes 12 (10 net) horizontal wells to be drilled on our Swan Hills play, of which 8 (8 net) will be drilled at Deer Mountain and 4 (2 net) will be drilled on farm-in land.

2013 Capital Plan

For 2013, our initial capital program is structured to build on the success of 2012. The execution of this plan began in late 2012, when we accelerated the spending of $100 million of capital from 2013 to the end of 2012. The accelerated capital should allow us to minimize field operation interruptions and make efficient use of oil field services during the active winter drilling season in order to add new production in the first quarter of 2013. This initial accelerated capital, together with projected 2013 capital of $675 million, is expected to allow us to grow our average annual production by 8% to 12% while targeting relatively flat year-over-year exit production.

We anticipate 71% ($480 million) of our 2013 capital will be directed to drilling, completion and tie-in activities with an additional $140 million being spent on facilities, optimization, workover capital and sustaining capital. The 2013 capital plan is expected to deliver an average daily production rate of 46,000 to 48,000 boepd and exit 2013 production of approximately 49,000 to 52,000 boepd, with an 85% liquids weighting. Our initial capital plan (including the acceleration of $100 million into 2012) is materially lower than previous years, which we believe to be prudent given the current price volatility and wider light oil differentials being experienced by the industry. Our capital plan may be adjusted throughout the year to take into account changes to realized prices and service costs.

From a capital allocation standpoint, we will focus on continuing to grow our production in the Cardium which, like our Bakken and Conventional business units, should become cash flow positive in 2013. The Cardium development program will focus on pad-drilling in Brazeau, Lochend and West Pembina, to shorten on-stream cycle times and reduce capital costs for surface leases, drilling, completions, equipping and tie-ins. We will also continue to invest in our cash flow positive assets in the Bakken and Southeast Saskatchewan. The Bakken program balances facilities and infrastructure spending with cluster development drilling to maintain strong capital efficiencies and a low operating cost structure. We have also allotted capital for the commercial expansion of our EOR pilots to build upon the encouraging results to date. Finally, we will invest in developing our new plays in Alberta that will drive future growth.

Our 2013 drilling activity will see a total of approximately 129 wells drilled, broken down by operating area as follows:


----------------------------------------------------------------------------
                                               Capital             New Wells
Area                                     ($million)(1)              (Net)(1)
----------------------------------------------------------------------------
Bakken                                              85                    32
----------------------------------------------------------------------------
Cardium                                            290                    67
----------------------------------------------------------------------------
SE Saskatchewan Conventional                        27                    16
----------------------------------------------------------------------------
Alberta / BC (Emerging Plays)                       78                    14
----------------------------------------------------------------------------
Total                                              480                   129
----------------------------------------------------------------------------
(1) 2013 capital spending estimates and associated drill counts do not   
    include the acceleration of $100 million of 2013 into December 2012. 

It is expected that corporate declines for 2013 will be in the range of 39% for the year. This is higher than the decline that we experienced in 2012 primarily as a result of the late year production additions from our expanded capital program in the second half of the year. Due to the typical horizontal well production profile, our corporate production in 2013 is expected to have higher initial declines during the first half of the year followed by notably lower declines during the second half of the year. With a balanced approach to 2013 capital plans resulting in a more active Q1 drilling program, followed by a load leveled Q3 and Q4 program, we anticipate that our 2014 corporate decline rate will be in the range of 30-35%.

We remain focused on creating value for our shareholders by developing long-life, accretive, light-oil resource plays that support organic growth of production and reserves. We believe that we are well positioned for the coming year with over 2,250 potential drilling locations, over 1 million acres of undeveloped land and balance sheet flexibility that allows us to actively develop our resources and respond to changing industry conditions.

2013 Guidance


 Production                                                                 
                                                                            
                                    Oil and NGL (bbls/d)    39,000 to 41,000
                                    Natural Gas (mmcf/d)            41 to 43
                                           Total (boe/d)    46,000 to 48,000
 Exit Production (boe/d)                                    49,000 to 52,000
 Funds Flow(1)                                                              
     Funds Flow from Operations ('000)                   $645,000 - $680,000
     Funds Flow per share(2)                                   $3.30 - $3.50
 Declared Dividends per share                                          $0.96
 Capital Expenditures(3)                                                    
     Drilling and Completions ('000)                                $480,000
     Facilities, Workovers, Optimization, Sustaining                        
      Capital ('000)                                                $140,000
     Land, Seismic and Other ('000)                                  $55,000
 Total ('000)                                                       $675,000
                                                                            
(1)  Commodity price assumptions include WTI US$90.00 /bbl, AECO CDN$3.50   
     /mcf, foreign exchange rate of US$/CDN$1.00, and corporate oil         
     differential of 10%.                                                   
(2)  Funds flow per share calculation based on 194 million shares           
     outstanding for 2013.                                                  
(3)  Projected capital expenditures exclude acquisitions, which are         
     evaluated separately.                                                  

$1.4 Billion Credit Facility and $300 Million Convertible Debentures

In December 2012, holders of $293.4 million of Convertible Debentures elected to put them back to PetroBakken. We have elected to repay these debentures in cash on the settlement date of February 8, 2013. We initially plan to repay the debentures using our $1.4 billion credit facility, which was approximately $610 million drawn at the end of 2012. The credit facility has a current maturity date of June 2015 and has the potential to be increased to $1.5 billion under an accordion feature.

2013 Hedging Strategy

In order to provide greater cash flow security, we have expanded our hedging program and are targeting to increase the net-hedged production for 2013 from 12,000 bopd to 18,000 bopd. This is an increase to our past practice of hedging approximately 25% of our net production. The following table provides our current hedge position


----------------------------------------------------------------------------
         Hedged Barrels (bbls/d)  Average Floor (US$)  Average Ceiling (US$)
----------------------------------------------------------------------------
2013 1H                   14,164               $78.50                $116.71
----------------------------------------------------------------------------
     2H                   14,000               $79.46                $114.37
----------------------------------------------------------------------------
2014 1H                    9,000               $80.42                $107.80
----------------------------------------------------------------------------
     2H                    5,750               $80.87                $107.59
----------------------------------------------------------------------------
2015 1H                    2,000               $80.00                $102.99
----------------------------------------------------------------------------
     2H                      500               $80.00                $102.55
----------------------------------------------------------------------------

Completion of Corporate Reorganization and Introduction of a Share Dividend Program

On December 31st, 2012 Petrobank Energy and Resources Ltd. and PetroBakken completed a corporate reorganization which resulted in Petrobank shareholders effectively receiving Petrobank's share holdings in PetroBakken while maintaining their interest in the remaining Petrobank assets. This transaction eliminated Petrobank's 56% ownership in PetroBakken through the distribution of the 107.8 million shares owned by Petrobank to the Petrobank shareholders. This resulted in our market float increasing from approximately 83 million shares to 191 million shares, providing investors with increased trading liquidity.

Concurrent with the reorganization, PetroBakken has adopted a Share Dividend Program ("SDP"). PetroBakken currently has a dividend reinvestment plan "(DRIP)" in place that is available only to Canadian PetroBakken shareholders. The new SDP will be available to Canadian shareholders and will also enable most Non-Canadian shareholders to participate. The DRIP and the SDP will both allow shareholders to effectively receive their monthly PetroBakken dividends in additional PetroBakken shares at a 5% discount to the market price at the date of the dividend payment. Further information in respect of the DRIP and SDP, including additional tax information and information on how to enrol your shares, will be available through our website at www.petrobakken.com.

Management Promotions

We are pleased to announce the following internal management appointments. Mr. Rene Laprade has been promoted to the position of Senior Vice President and Chief Operating Officer. Rene has been with PetroBakken since our inception as Senior Vice President, Operations. Mr. Brad Malley has been promoted to Vice President, Drilling and Completions. Mr. David Salahub has been promoted to Vice President, Production. Ms. Doreen Scheidt has been promoted to Vice President and Controller. Finally, Mr. Lars Glemser has been promoted to Treasurer.

PetroBakken Energy Ltd. is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. PetroBakken is applying leading edge technology to a multi-year inventory of Bakken and Cardium light oil development locations. Our strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield.

Non-GAAP Measures. This press release contains financial terms that are not considered measures under IFRS, such as funds flow from operations and funds flow per share. These measures are commonly utilized in the oil and gas industry and are considered informative for management and stakeholders. Specifically, funds flow from operations reflects cash generated from operating activities before changes in non-cash working capital. Management considers funds flow from operations and funds flow per share important as it helps evaluate performance and demonstrate the ability to generate sufficient cash to fund future growth opportunities, pay dividends and repay debt. Funds flow from operations and funds flow per share may not be comparable to those reported by other companies nor should they be viewed as an alternative to cash flow from operations or other measures of financial performance calculated in accordance with IFRS. Further information in respect of these non-GAAP measures is set forth in our MD&A.

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to future results from operations, projected financial results, future capital costs, future production rates, proposed exploration and development activities and capital spending levels. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the success of future drilling, completion, recompletion and development activities, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., 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 reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, reliance on industry partners, availability of equipment and personnel, uncertainty surrounding timing for drilling and completion activities resulting from weather and other factors, changes in applicable regulatory regimes and health, safety and environmental risks), commodity price and exchange rate fluctuations and general economic conditions. Certain of these risks are set out in more detail in our Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com. Except as may be required by applicable securities laws, PetroBakken assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contacts:
PetroBakken Energy Ltd.
John D. Wright
President and Chief Executive Officer
(403) 268.7800

PetroBakken Energy Ltd.
Peter D. Scott
Senior Vice President and Chief Financial Officer
(403) 268.7800

PetroBakken Energy Ltd.
Bill A. Kanters
Vice President Capital Markets
(403) 268.7800

PetroBakken Energy Ltd.
Eighth Avenue Place, 2800, 525 - 8th Avenue S.W.
Calgary, Alberta, T2P 1G1
(403) 268.7800
(403) 218.6075 (FAX)
[email protected]
www.petrobakken.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.