Crocotta announced 2011 Guidance and further drilling success at its two key growth projects (liquids-rich Bluesky gas at Edson, Alberta and Montney / Doig gas in Northeast British Columbia).
CAPITAL PROGRAM AND GUIDANCE
Crocotta has approved a budget that entails spending approximately $51 million in 2011 with 75% focused on liquids-rich natural gas at Edson. Of the remaining capital, approximately 16% will be spent pursuing "New Oil Projects" with the remaining balance spent on the Montney at Dawson.
Crocotta estimates average 2011 production to be 1,235 bopd of light oil and natural gas liquids plus 13.0 mmcf/d of natural gas for a total of 3,400 boepd. 2011 exit production is estimated to reach 1,700 bopd of light oil and natural gas liquids plus 16.8 mmcf/d for a total of 4,500 boepd. Production from light oil and natural gas liquids is projected to more than double from current production of 835 bopd while natural gas would increase 68% from current production of 10.0 mmcf/d. Liquid production on a percentage basis climbs from 33% currently to 38% by the end of 2011. By allocating capital to New Oil Projects in 2011, Crocotta estimates it can achieve close to 50/50 liquids/ gas split during 2012.
During Q410, Crocotta drilled three new hztl Bluesky wells at Edson (1 oil well and 2 liquids-rich gas wells) and one vertical Montney gas test at Sunrise (Northeast British Columbia).
The Bluesky oil well (35% WI) has been on production since December 1, 2010 and is currently producing over 200 bopd (gross basis) of light sweet oil. Crocotta is in the process of optimizing the well and expects the flow rate to increase over the next few weeks. The on-stream cost of the oil well was approximately $4.2 million (gross basis).
One of the Bluesky gas wells (20% WI) has been on production since November 27, 2010 and is currently producing 280 bopd (gross basis) of combined light oil and natural gas liquids in addition to 2.5 mmcf/d (gross basis) of sales gas for a total of 700 boepd (gross basis). The on-stream cost of the Bluesky gas wells is approximately $5.0 million (gross basis).
The second Bluesky gas well (29% WI) was completed in early January 2011 and has been on-stream since January 8, 2011. Information on this well will be released once stable production rates have been achieved.
Crocotta is currently drilling higher interest sections at Edson.
Dawson / Sunrise
At Sunrise, Crocotta drilled a vertical Montney well and tested gas out of three separate Montney sands. The Upper Montney sand tested at a rate of 700 mcf/d of sweet gas at the end of a 4 day flow period. The zone of interest was also tested vertically to the north by a competitor at similar rates with their offset horizontals producing at rates of 6-10 mmcf/d. Horizontal development of this project will be slated for 2012.
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