Welcome!

Microsoft Cloud Authors: Pat Romanski, Lori MacVittie, Andreas Grabner, Jim Kaskade, John Basso

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
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band-aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It does...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...