Palliser Oil & Gas Corporation Provides Operations Update
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CALGARY, Dec. 18, 2013 /CNW/ - Palliser Oil & Gas Corporation ("Palliser" or the "Company") (TSX VENTURE: PXL) would like to provide an operations update.
Fourth quarter 2013 average production is anticipated to be approximately 2,000 boe per day, down 14% from volumes reported in the prior quarter. For 2013, average production is now forecasted at approximately 2,330 boe per day, representing a 4% downward revision from the previous forecast.
Palliser previously provided operational updates which noted that water breakthrough has been experienced in a number of CHOPS wells in the Manitou area and that production declines have outpaced additions from the capital spending program. The new Manitou salt water disposal facility was commissioned in late November, with high volume lift ramp up of these wells commencing in December. It is forecasted that the recovery of oil production from the affected wells at Manitou will be realized through the first quarter of 2014. In the Edam area, the Company has experienced higher water cuts in a select number of high oil rate producers which have recovered a significant percentage of the original oil in place, resulting in production losses of approximately 200 barrels per day as compared to the third quarter of 2013. The Company has reacted to this development by expanding its salt water disposal take away capacity and producing those specific wells at higher total fluid rates. More recently, the Company re-completed new uphole zones in two wells. These recent operations are forecasted to result in production recoveries through the first quarter of 2014.
Due to these lower production volumes, operating costs for the fourth quarter are forecasted to be higher on a per unit basis. When combined with the realized wider heavy oil differentials, the Company is now forecasting funds flow from operating activities of approximately $2 million for the fourth quarter of 2013. Capital expenditures for the fourth quarter are estimated to be $6 million, resulting in forecast year-end net debt of approximately $46 million.
The fourth quarter capital program is now complete; however, winter weather caused some delays in bringing the remaining 2013 projects on production. Results from the Company's total 2013 capital program appear to be in line with previous years, with 18 wells being drilled, reactivated and re-entered for production with 100% success. Production from these projects is forecasted to contribute to corporate production growth during the first quarter of 2014.
The Company anticipates providing an operations update in conjunction with releasing its 2014 capital budget on or before January 31, 2014.
For further information regarding Palliser Oil & Gas Corporation, the reader is invited to visit the Company's website at www.palliserogc.com.
Palliser is a Calgary-based emerging junior oil and gas company currently focused on high netback heavy oil production in the greater Lloydminster area of both Alberta and Saskatchewan.
Certain statements contained herein constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation, including, but not limited to management's assessment of future plans and operations, including: commodity focus; drilling plans and potential locations; expected production levels; expected transportation methods; development and acquisition plans; certain economic factors; and capital expenditures. With respect to forward-looking statements herein, Palliser has made assumptions regarding, among other things; future capital expenditure levels; future oil and natural gas prices; "differentials" between West Texas Intermediate and Western Canadian Select benchmark pricing; future oil and natural gas production levels; future water disposal capacity; future exchange rates and interest rates; ability to obtain equipment and services in a timely manner to carry out development activities; ability to market oil and natural gas successfully to current and new customers; the ability to ship volumes by rail; the impact of increasing competition; the ability to obtain financing on acceptable terms; and the ability to add production and reserves through development and exploitation activities. Although Palliser believes that the expectations reflected in the forward-looking statements contained herein, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included herein, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous risks and uncertainties that contribute to the possibility that the forward-looking statements will not occur, which may cause Palliser's actual performance and financial results in future periods to differ materially from any estimates or projections. Additional information on these and other factors that could affect Palliser's results are included in reports on file with Canadian securities regulatory authorities, including the Company's Annual Information Form, and may be accessed through the SEDAR website at www.sedar.com.
The forward-looking statements contained herein speak only as of the date hereof. Except as expressly required by applicable securities laws, Palliser does not undertake any obligation to, nor does it intend to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. In addition, readers are cautioned that historical results are not necessarily indicative of future performance.
Production volumes are commonly expressed on a barrel of equivalent ("BOE") basis whereby natural gas volumes are converted at a ratio of six thousand cubic feet to one barrel of oil. The intention is to convert oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants. The term BOE may be misleading, particularly if used in isolation. The conversion ratio is based on an energy equivalent method and does not represent an economic value equivalency at the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Press release.
SOURCE Palliser Oil & Gas CorporationFor further information:
Kevin J. Gibson
Allan B. Carswell
President and COO
Ivan J. Condic
Vice President, Finance and CFO