Crew Energy Inc.’s 2014 capital budget has been set at $246 million and will focus on the development of liquids-rich natural gas at Septimus and light oil at Tower, both in northeast British Columbia.
Crew plans to drill 62 net wells with 47 wells targeting oil and 15 wells targeting liquids-rich natural gas.
The program is designed to provide a platform for long-term profitable growth and to further delineate the company's northeast B.C. Montney resource with over 15 billion barrels of oil equivalent (boe) per day of total petroleum initially in place assigned by Crew's independent evaluator.
Average production for 2014 is forecasted to be 29,500 to 30,500 boe per day (52% natural gas and 48% oil and natural gas liquids) representing a forecast 10% increase over 2013. Fourth quarter 2014 average production is targeted to be 12% over 2013 levels at 31,500 to 32,500 boe per day.
Average Montney production is targeted at 11,500 boe per day, a 53% increase over 2013.
The company said it plans to invest $35 million in infrastructure to build an oil battery at Tower and start construction on a second 60-million-cubic-feet- (mmcf) per-day-gas processing facility at Septimus, which is expected to be onstream in mid-2015.
Crew will continue with the front-end engineering for its previously disclosed facility at Groundbirch with a planned start-up in 2016.
Crew is investing approximately $34 million in 2014 on the construction of a new gas plant and pre-drilled wells anticipated to begin production in the second half of 2015 that will not contribute production or funds from operations in 2014.
These investments are expected to form the foundation of steady and prolonged production growth from the Montney contributing to corporate production targeting greater than 40,000 boe per day at the end of 2015 based on its long range strategic planning, said the company.
The company said the capital program in northeast B.C. is its most ambitious program since it started accumulating land in 2007.
Crew’s enthusiasm for this play and this area stems from a long learning curve where a number of drilling and completion techniques have been employed and have now evolved resulting in superior long-term economics and growth visibility.
The company has drilled over 40 wells targeting Montney liquids-rich natural gas at Septimus with the latest group of wells exhibiting significant increases in production, liquids content and expected rates of return.
The Septimus gas plant expansion to 60 to 65 mmcf per day of capacity has been completed four months ahead of schedule and with the facility at capacity, production has increased in this area to a current rate of approximately 10,500 boe per day from 6,000 boe per day in January 2013, representing a 75% increase.
Improved efficiencies in drilling and completions, pad development and an area water management plan have contributed to reduced costs leading to robust economics, said Crew. With its drilling success at Septimus, Crew is planning to construct a second 60 to 65 mmcf per day gas facility allowing the company to fully utilize its expanded pipeline capacity. The expected onstream date is mid-2015.
The company’s three well pad currently being drilled and a seven well pad to be drilled and completed in 2014 are expected to keep production volumes in the 10,000- to 11,000-boe-per-day range. The company plans to pre-drill four wells in 2014 in anticipation of the second gas processing facility.
