(TSX-V:BBI) Blackbird Energy Inc. (“
Blackbird” or
the “
Company”) is pleased to provide initial
production results from three new development wells on its
condensate-rich Pipestone/Elmworth Montney play, announce the
completion of its planned delineation program and provide its
preliminary 2018 outlook.
“A key focus for Blackbird in 2017 was the
continued application of high intensity completions to our wells on
the Pipestone/Elmworth corridor. Our objective in pushing the
limits on completion intensity has been to prove elevated
higher-valued condensate cuts and enhance liquids recoveries
through the life of our wells. We are very encouraged by early
stage condensate production from our wells, and believe completing
longer-extended reach wells with more proppant and more stages will
enhance our economics. We look forward to continuing the
delineation of our condensate-rich Pipestone/Elmworth Montney play
through both extended production data and preliminary results from
new wells being tested or brought on production in 2018,” commented
Garth Braun, President, Chief Executive Officer and Chairman of
Blackbird.
Initial Production Results
Blackbird is pleased to announce that its total
corporate December sales production averaged an estimated 1,972
boe/d (55% liquids), with production online for 28 of a possible 31
days through the month.
Consistent run times through December allowed
Blackbird to collect initial 30-day production (IP30) data from
three of its most recent development wells, as detailed below:
Well |
IP30(1)(2)(3)(4) |
|
Condensate (bbl/d) |
Natural Gas (mcf/d) |
NGLs (bbl/d) |
CGR(5) (bbls/mmcf) |
Total (boe/d) |
% Load Water Recovered(6) |
Lateral Length (meters) |
|
02/6-26-70W6 (Upper Montney) |
475 |
1,076 |
20 |
460 |
674 |
37 |
% |
2,103 |
|
2-28-70-7W6 (Middle Montney) |
300 |
1,881 |
24 |
172 |
636 |
24 |
% |
1,977 |
|
15-21-70-7W6 (Upper Montney) |
289 |
1,424 |
18 |
216 |
543 |
14 |
% |
1,300 |
|
1)
Production from these wells has been restricted at times due to
third party processing capacity limitations and water injection
limitations. |
2) Numbers
may not add due to rounding. |
3) All
disclosed production rates and volumes are presented net of any
load water. |
4) All
volumes are based on field estimated production data. |
5) CGR
includes condensate and NGL production. |
6) Load
water is not included in any of the other volumes
reported. |
Well |
Peak 48 Hour Rate During Initial 30-day
Production Period(1)(2)(3)(4) |
Condensate (bbl/d) |
Natural Gas (mcf/d) |
NGLs (bbl/d) |
CGR(5) (bbls/mmcf) |
Total (boe/d) |
Lateral Length (meters) |
02/6-26-70W6 (Upper Montney) |
701 |
1,221 |
21 |
591 |
924 |
2,103 |
2-28-70-7W6 (Middle Montney) |
412 |
1,728 |
22 |
251 |
721 |
1,977 |
15-21-70-7W6 (Upper Montney) |
421 |
1,724 |
22 |
257 |
729 |
1,300 |
1)
Production from these wells has been restricted at times due to
third party processing capacity limitations and water injection
limitations. |
2) Numbers
may not add due to rounding. |
3) All
disclosed production rates and volumes are presented net of any
load water. |
4) All
volumes are based on field estimated production data. |
5) CGR
includes condensate and NGL production. |
|
|
|
|
|
The Company cautions that initial production and
short-term peak rates are not necessarily indicative of long-term
well or reservoir performance or of ultimate recovery. Such
rates are preliminary in nature and may not be representative of
stabilized on-stream production rates. Actual results will
differ from those realized during a short term initial production
or peak measurement period, and the difference may be material.
02/6-26-70-7W6 Upper Montney Development
Well
The 02/6-26-70W6 Upper Montney Development well
was brought on-stream in late September. The well was drilled to a
total depth of 4,808 meters with a lateral of 2,103 meters and
completed over 42 intervals using a combination of the STAGE
Generation Four Sleeve System and Plug and Perf. Approximately
3,193 tonnes of sand was placed representing a completion intensity
of approximately 1.5 tonnes per meter. Over its initial 30 days on
production the well produced at an average rate of 674 boe/d
including 475 bbl/d of condensate. At the end of the 30 day period
the well had recovered approximately 37% of load frac water.
2-28-70-7W6 Middle Montney Development Well
The 2-28-70-7W6 Middle Montney Development well
was brought on-stream in mid-November. The well was drilled to a
total depth of 4,942 meters with a lateral of 1,977 meters and
completed over 46 intervals using the STAGE Generation Four Sleeve
System. Approximately 3,521 tonnes of sand was placed representing
a completion intensity of approximately 1.8 tonnes per meter. Over
its initial 30 days on production the well produced at an average
rate of 636 boe/d including 300 bbl/d of condensate. At the end of
the 30 day period the well had recovered approximately 24% of load
frac water.
15-21-70-7W6 Upper Montney Development Well
The 15-21-70-7W6 Upper Montney Development well
was brought on-stream in mid-November. The well was drilled to a
total depth of 4,120 meters with a lateral of 1,300 meters and was
re-fractured in 24 stages with four to five intervals per stage for
a total of 108 intervals using Plug and Perf. Approximately 3,170
tonnes of sand was placed representing a completion intensity of
approximately 2.4 tonnes per meter. Over its initial 30 days on
production the well produced at an average rate of 543 boe/d
including 289 bbl/d of condensate. At the end of the 30 day period
the well had recovered approximately 14% of load frac water.
2018 Outlook
Given the nature of the Company’s future
commitments, Blackbird’s capital obligations in the first half of
2018 will be limited. Activity is expected to accelerate in the
second half of 2018 as the Company prepares to meet
previously-disclosed future processing commitments. Blackbird is in
a strong financial position and as at October 31, 2017 the Company
had positive working capital of approximately $21.3 million.
Blackbird continues to evaluate a number of non-dilutive options
available to facilitate future growth and development, including
access to an expanded credit facility. Additionally, with improved
run times Blackbird anticipates to benefit from a more meaningful
and consistent stream of revenues from its producing assets.
The Company expects to have early production
results from four additional wells before the end of March,
including test data from its recently completed 3-27-71-7W6 Upper
Montney Northern Delineation well (surface location 6-33-71-7W6) as
well as its 2-20-70-6W6 Middle Montney Development well, which is
more than 5 kilometers east of Blackbird's previous development
drilling. If successful, the Company believes that these wells
would further validate Blackbird’s economic multi-interval drilling
inventory outside current proved plus probable reserve
bookings.
About BlackbirdBlackbird Energy Inc. is a highly
innovative oil and gas exploration and development company focused
on the condensate and liquids-rich Montney fairway at Elmworth,
near Grande Prairie, Alberta.
For more information, please view our Corporate
Presentation at www.blackbirdenergyinc.com or contact:
Blackbird Energy Inc.Garth BraunChairman, CEO,
and President(403) 500-5550gbraun@blackbirdenergyinc.com
Allan DixonManager, Business Development(403)
699-9929 Ext. 103adixon@blackbirdenergyinc.com
Advisories
Forward-Looking Statements
This news release contains certain statements
("forward-looking statements") that constitute forward-looking
information within the meaning of applicable Canadian securities
laws. Forward-looking statements relate to future results or
events, are based upon internal plans, intentions, expectations and
beliefs, and are subject to risks and uncertainties that may cause
actual results or events to differ materially from those indicated
or suggested therein. All statements other than statements of
current or historical fact constitute forward-looking
statements. Forward-looking statements are typically, but not
always, identified by words such as "anticipate", "continue",
"estimate", "expect", "intend", "may", "will", "should", "believe",
"plan", "objective", "potential" and similar or other expressions
indicating or suggesting future results or events.
Forward-looking statements are not promises of
future outcomes. There can be no assurance that the results
or events indicated or suggested by the forward-looking statements,
or the plans, intentions, expectations or beliefs contained therein
or upon which they are based, are correct or will in fact occur or
be realized (or if they do, what benefits the Company may derive
therefrom).
In particular, but without limiting the
foregoing, this news release contains forward-looking statements
pertaining to: Blackbird's objective of proving elevated condensate
cuts and enhanced liquids recoveries through completion intensity;
expectations for enhanced economics from longer wells with more
proppant and stages; continued delineation of the Company’s
Pipestone/Elmworth Montney play; expected capital activity in 2018,
including limited obligations in the first half and accelerated
activity in the second half; future financing activity, including
continued evaluation of an expanded credit facility and other
non-dilutive options; scale and consistency of future revenue
streams from producing assets; expected timing for early production
results from additional wells; and validation of drilling inventory
outside of current reserves bookings.
With respect to the forward-looking statements
contained in this news release, Blackbird has assessed material
factors and made assumptions regarding, among other things: future
commodity prices and currency exchange rates, including consistency
of future oil, NGLs and natural gas prices with current commodity
price forecasts; the Company's continued ability to obtain
qualified staff and equipment in a timely and cost-efficient
manner; infrastructure and facility design concepts that have been
applied by the Company elsewhere in its Pipestone / Elmworth
Project may be successfully applied to the properties; the
predictability of future results based on past and current
experience; the predictability and consistency of the legislative
and regulatory regime governing royalties, taxes, environmental
matters and oil and gas operations, both provincially and
federally; the Company's ability to market production of oil, NGLs
and natural gas successfully to customers; the timing and success
of drilling and completion activities (and the extent to which the
results thereof meet expectations); the Company's future production
levels and amount of future capital investment, and their
consistency with the Company's current development plans and
budget; future capital expenditure requirements and the sufficiency
thereof to achieve the Company’s objectives; the successful
application of drilling and completion technology and processes;
the applicability of new technologies for recovery and production
of the Company's reserves and other resources, and their ability to
improve capital and operational efficiencies in the future; the
recoverability of the Company's reserves and other resources; the
Company’s ability to economically produce oil and gas from its
properties and the timing and cost to do so; the performance of
both new and existing wells; future cash flows from production;
future sources of funding for the Company's capital program; the
Company's future debt levels; geological and engineering estimates
in respect of the Company's reserves and other resources; the
accuracy of geological and geophysical data and the interpretation
thereof; the geography of the areas in which the Company conducts
exploration and development activities; the timely receipt of
required regulatory approvals;; the access, economic, regulatory
and physical limitations to which the Company may be subject from
time to time; the impact of competition on the Company; and the
Company's ability to obtain external financing when required and on
acceptable terms.
The forward-looking statements contained herein
reflect management's current views, but the assessments and
assumptions upon which they are based may prove to be incorrect.
Although Blackbird believes that its underlying assessments and
assumptions are reasonable based on currently available
information, undue reliance should not be placed on forward-looking
statements, which are inherently uncertain, depend upon the
accuracy of such assessments and assumptions, and are subject to
known and unknown risks, uncertainties and other factors, both
general and specific, many of which are beyond the Company's
control, that that may cause actual results or events to differ
materially from those indicated or suggested in the forward-looking
information and statements. Such risks, uncertainties and other
factors are discussed in the Company’s current annual information
form , annual and interim management’s discussion and analysis, and
other documents filed by it from time to time with securities
regulatory authorities in Canada, copies of which are available
electronically on SEDAR at www.sedar.com, and include, but are not
limited to: volatility in market prices and demand for oil, NGLs
and natural gas and hedging activities related thereto; general
economic, business and industry conditions; variance of the
Company's actual capital costs, operating costs and economic
returns from those anticipated; the ability to find, develop or
acquire additional reserves and the availability of the capital or
financing necessary to do so on satisfactory terms; risks related
to the exploration, development and production of oil and natural
gas reserves and resources; negative public perception of oil and
natural gas development and transportation, hydraulic fracturing
and fossil fuels; actions by governmental authorities, including
changes in government regulation, royalties and taxation; potential
legislative and regulatory changes; the rescission, or amendment to
the conditions of, groundwater licenses of the Company; management
of the Company's growth; the ability to successfully identify and
make attractive acquisitions, joint ventures or investments, or
successfully integrate future acquisitions or businesses; the
availability, cost or shortage of rigs, equipment, raw materials,
supplies or qualified personnel; adoption or modification of
climate change legislation by governments; the absence or loss of
key employees; uncertainty associated with estimates of oil, NGLs
and natural gas reserves and resources and the variance of such
estimates from actual future production; dependence upon
compressors, gathering lines, pipelines and other facilities,
certain of which the Company does not control; the ability to
satisfy obligations under the Company's firm commitment
transportation arrangements; the uncertainties related to the
Company's identified drilling locations; the high-risk nature of
successfully stimulating well productivity and drilling for and
producing oil, NGLs and natural gas; operating hazards and
uninsured risks; the possibility that the Company's drilling
activities may encounter sour gas; execution risks associated with
the Company's business plan; failure to acquire or develop
replacement reserves; the concentration of the Company's assets in
the Pipestone / Elmworth Project area; unforeseen title defects;
aboriginal claims; failure to accurately estimate abandonment and
reclamation costs; development and exploratory drilling efforts and
well operations may not be profitable or achieve the targeted
return; horizontal drilling and completion technique risks and
failure of drilling results to meet expectations for reserves or
production; limited intellectual property protection for operating
practices and dependence on employees and contractors; third-party
claims regarding the Company's right to use technology and
equipment; expiry of certain leases for the undeveloped leasehold
acreage in the near future; failure to realize the anticipated
benefits of acquisitions or dispositions; failure of properties
currently held or acquired in the future to produce as projected
and inability to accurately determine reserve and resource
potential, identify liabilities associated with acquired properties
or obtain protection from sellers against such liabilities; changes
in the application, interpretation and enforcement of applicable
laws and regulations; restrictions on drilling intended to protect
certain species of wildlife; potential conflicts of interests;
actual results differing materially from management estimates and
assumptions; seasonality of the Company's activities and the
Canadian oil and gas industry; alternatives to and changing demand
for petroleum products; extensive competition in the Company's
industry; lower oil, NGLs and natural gas prices and higher costs;
failure of 2D and 3D seismic data used by the Company to accurately
identify the presence of oil and natural gas; risks relating to
commodity price hedging instruments; terrorist attacks or armed
conflict; cyber security risks, loss of information and computer
systems; inability to dispose of non-strategic assets on attractive
terms; security deposits required under provincial liability
management programs; reassessment by taxing authorities of the
Company's prior transactions and filings; variations in foreign
exchange rates and interest rates; third-party credit risk
including risk associated with counterparties in risk management
activities related to commodity prices and foreign exchange rates;
sufficiency of insurance policies; potential litigation; variation
in future calculations of non-IFRS measures; sufficiency of
internal controls; breach of agreements by counterparties and
potential enforceability issues in contracts; impact of expansion
into new activities on risk exposure; inability of the Company to
respond quickly to competitive pressures; and the risks related to
the common shares and warrants that are publicly traded. This
list is not exhaustive.
The forward-looking statements contained in this
news release are made as of the date hereof and Blackbird assumes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
unless required by applicable securities laws. All
forward-looking statements herein are expressly qualified by this
advisory.
Oil and Gas Measures
This news release discloses certain production
information on a barrels of oil equivalent ("boe") basis with
natural gas converted to barrels of oil equivalent using a
conversion factor of six thousand cubic feet of gas to one barrel
of oil (6:1). Condensate and other NGLs are converted to boes
at a ratio of 1 bbl:1 bbl. Boes may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based
roughly on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the Company's sales point. Although the 6:1
conversion ratio is an industry accepted norm, it is not reflective
of price or market value differentials between product types. Based
on current commodity prices, the value ratio between crude oil and
natural gas is significantly different from the 6:1 energy
equivalency ratio. Accordingly, using a conversion ratio of 6 mcf:1
bbl may be misleading as an indication of value.
THE TSX VENTURE EXCHANGE INC. HAS
NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS
RELEASE. 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.
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