Argent Energy Trust announces 2012 and 2013 capital budget
CALGARY, Sept. 13, 2012 /CNW/ - Argent Energy Trust ("Argent" or the "Trust") (TSX: AET.UN) is pleased to provide its 2012 (remaining year) and 2013 capital budget and related production and operating cost guidance.
2012 (Remaining Year) and 2013 Capital Budget
The Board of Directors has approved a 2012 remaining year capital budget of US$28.7 million and a 2013 capital budget of US$36.5 million. Argent intends to drill a total of 14 horizontal wells (which include nine Austin Chalk oil wells and five Eagle Ford oil wells) and one vertical South Texas natural gas well as well as related minor infrastructure. As a result, Argent, which is currently producing approximately 1,600 boe/d, expects to achieve a 2012 production exit rate of approximately 2,300 to 2,400 boe/d and a 2013 average production rate of approximately 3,000 to 3,100 boe/d with operating costs ranging from approximately US$6.00 to $7.00 per boe.
The above capital budget numbers include both an increase in capital and an increase in activity since Argent filed its long form prospectus on August 1, 2012. As a result of the available additional capital from the closing of the IPO overallotment, Argent has increased its working interest in five of the nine planned Austin Chalk wells (from an average 65.47% to a current 96.71% working interest ownership). Argent is also planning to drill an additional three Austin Chalk wells over the next 15 months, to accelerate the Eagle Ford program in the Trust's overall development plan, and to test 2 new zones (Buda and Lower Austin Chalk) in 2 separate Austin Chalk wells.
The Eagle Ford program has been accelerated as a result of the increased activity and results since the beginning of 2012 around Argent's properties. Only four Eagle Ford competitor wells were drilled and producing in the vicinity of Argent's lands to the end of 2011. There have been an additional 20 new Eagle Ford wells drilled and completed and over 30 new wells permitted this year. This increased competitor activity has allowed Argent to benefit from competitors' experience in the area to now optimally drill and complete wells on Argent's properties. This accelerated program is expected to add significant reserves and value to the company.
We are forecasting a 2013 payout ratio of approximately 55% at US$96.90 WTI per barrel of oil and US$3.46 NYMEX per Mcf of natural gas.
About Argent Energy Trust
Argent's objective is to create stable, consistent returns for investors through the acquisition and development of oil and natural gas reserves and production with low risk exploitation potential, located primarily in the United States. Argent is a mutual fund trust under the Income Tax Act (Canada). Material information pertaining to Argent may be found on www.sedar.com or www.argentenergytrust.com.
Argent's units are traded on the Toronto Stock Exchange under the symbol AET.UN.
Forward Looking Statements
This press release includes forward-looking information within the meaning of applicable Canadian and United States securities legislation. All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Argent budgets, forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future are considered forward-looking information. The forward-looking information provided in this press release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events. Argent cautions that its future oil, natural gas and natural gas liquids production (including the 2012 and 2013 production rates), revenues, cash flows, liquidity, plans for future operations, anticipated drilling program for the remainder of 2012 and 2013, the anticipated 2012 and 2013 capital budget and specific uses, payout ratios, expenses, outlook for oil and natural gas prices, timing and amount of future capital expenditures, and other forward-looking information is subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of oil and gas.
These risks include, but are not limited to, oil and natural gas price volatility, Argent's access to cash flows and other sources of liquidity to fund its capital expenditures, its level of indebtedness, its ability to replace production, the impact of the current financial climate on Argent's anticipated business and financial condition, a lack of availability of or increases in costs in goods and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, economic conditions and other risks as described in documents and reports that Argent files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Argent's actual results and plans to differ materially from those contained in the forward-looking information.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid. All forward-looking information speaks only as of the date of this press release, and Argent assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Argent's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this presentation.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of six to one, utilizing a boe conversion ratio of six Mcf to one bbl may be misleading as an indication of value.
SOURCE: Argent Energy TrustFor further information:
For further information concerning this press release, please contact:
Chief Executive Officer
Argent Energy Trust
Chief Financial Officer
Argent Energy Trust