PetroBakken Energy Ltd.

PetroBakken Energy Ltd.

July 09, 2012 06:30 ET

PetroBakken Provides Second Quarter 2012 Operational Update

CALGARY, ALBERTA--(Marketwire - July 9, 2012) - PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN) provides an update on second quarter 2012 drilling activity and production, with results on pace to meet production and capital guidance for 2012.

Our average production in the second quarter was 38,700 boepd, based on field estimates, comprised of over 14,800 boepd from the Bakken business unit, over 15,600 boepd from the Cardium business unit, and the remainder from our Saskatchewan Conventional and AB/BC business units. Second quarter production levels are after the 3,930 boepd of asset dispositions completed recently and reflect additional shut-in production of approximately 2,300 boepd due to spring break-up conditions. In June, our estimated average production was 37,500 boepd, with an 84% liquids weighting. Persistently wet weather in June caused extended road bans and limited service rig and truck access which, combined with several plant and battery turnarounds throughout the month, resulted in additional shut-in production of approximately 2,000 boepd.

In the second quarter we drilled 15 (9 net) wells and completed 24 (17 net) wells as indicated below:

  • 10 (6 net) wells were drilled and 9 (6 net) wells were completed in the Bakken business unit,
  • 4 (2 net) wells were drilled and 13 (10 net) wells were completed in the Cardium business unit, and
  • 1 well was drilled and 2 (1 net) wells were completed in our Saskatchewan Conventional business unit.

Only 6 (3 net) wells were brought on production in June, leaving 23 (15 net) wells in inventory that will be brought on as activity fully resumes post spring break-up. Field conditions are currently improving and we have 13 drilling rigs operating with extensive well servicing operations under way as well.

Facility investments continued in the Cardium business unit in the second quarter as we brought a new battery on-line in West Pembina, allowing us to tie-in associated gas production and provide central oil processing to reduce future trucking costs.

We remain active with our Normal Course Issuer Bid, purchasing approximately 2.5 million shares in the second quarter for a total investment of $30.8 million ($12.34/share). Year-to-date we have purchased approximately 3.3 million shares for a total of $45.2 million ($13.56/share).

Consistent with previous years, the second half of the year will be our period of highest activity and capital intensity. Our capital program has been slightly delayed by approximately three weeks, and we are well positioned to catch up prior to the end of the year. We expect to have 15 drilling rigs operating for most of the second half of 2012, including 7 rigs in the Cardium drilling 57 net wells, 6 rigs in the Bakken drilling 75 net wells, 1 rig in southeastern Saskatchewan drilling 27 net wells, and 1 rig drilling 4 net wells in our emerging plays in Alberta. Our balance sheet liquidity position remains exceptionally strong with approximately $1.1 billion of available capacity under our facility at June 30, 2012. With approximately 75% of our planned wells for 2012 yet to be drilled, we anticipate continued production growth during the second half of the year and reiterate our 2012 exit rate production guidance for 2012 of 52,000 to 56,000 boepd.

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, along with a significant inventory of opportunities in the Horn River and Montney gas resource plays in northeast BC. Our strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield.

BOEs. Natural gas volumes have been converted to barrels of oil equivalent ("boe"). Six thousand cubic feet ("Mcf") of natural gas is equal to one barrel of oil equivalent based on an energy equivalency conversion method primarily attributable at the burner tip and does not represent a value equivalency at the wellhead. Boes may be misleading, especially if used in isolation.

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, future capital costs, future production rates, proposed exploration and development activities, capital spending levels, and anticipated sources of capital. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the success of future drilling, completion, recompletion and development activities, the performance of new and existing wells, prevailing commodity prices and economic conditions, the availability and cost of labour and services, and weather and access to drilling locations. 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 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.

Contact Information

  • PetroBakken Energy Ltd.
    John D. Wright
    President and Chief Executive Officer

    PetroBakken Energy Ltd.
    Peter D. Scott
    Senior Vice President and Chief Financial Officer

    PetroBakken Energy Ltd.
    William A. Kanters
    Vice President, Capital Markets