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Birchcliff IDs 2021 Capex; Drilling Down, Completions Flat vs. 2020

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   |    Monday,March 15,2021

Birchcliff Energy Ltd. detailed its 2021 plan as well as updated its Q1 drilling ops.

2021 Plan

- Capex: $210-230 million - down 21% vs. 2020 levels of $276.8MM

  • D&C: $153-167 million
  • Facilities & Infrastructure: $25-28 million - down 70% from 2020 levels
  • Maintenance: $12-14 million
  • Land & Seismic: $4 million
  • Other: $16-17 million

 By Area:

  • Pouce Coupe: $93-102 million
  • Gordondale: $38-41 million
  • Other Well Projects: $22-24 million

- Production: 78-80 MBOEPD - up 3.4% vs. 2020 output of 76.4 MBOEPD

- Wells Drilled: 27 net wells - down 21% vs. 34 in 2020

  • Pouce Coupe: 19 net wells
  • Gordondale: 8 net wells

- Wells Completed: 33 net wells - down 3% vs. 34 in 2020

  • Pouce Coupe: 25 net wells
  • Gordondale: 8 net wells

- Rig Count: three rigs running (two at Pouce Coupe / one at Gordondale)

Jeff Tonken, President and Chief Executive Officer of Birchcliff, said: “Birchcliff has had a strong start to 2021. Our production and capital expenditures guidance is on target and our initial 2021 drilling results are encouraging. Our cash flow has been very strong as a result of the higher than anticipated commodity prices that we saw in February. Birchcliff was able to benefit from these prices as none of our production is subject to fixed price commodity hedges. We are focused on maximizing free funds flow and strengthening our balance sheet in 2021 and we look forward to announcing our first quarter results on May 12, 2021."

2021 Ops Summary

In Pouce Coupe, Birchcliff plans to drill a total of 19 wells and bring 25 wells on production in 2021. The Corporation has successfully completed its 7-well pad (04-04), which was drilled in late Q4 2020 and early January 2021. Flowback operations are complete and Birchcliff has recently brought the pad onstream, with production flowing through its existing owned and operated infrastructure. The Corporation has been encouraged by the flowback performance of the pad to date. Six wells on the 04-04 pad were drilled in the Basal Doig/Upper Montney interval, offsetting recent successful third-party drilling results, and one well was drilled in the Montney D1 interval, offsetting several of Birchcliff’s existing high-productivity, low-cost natural gas wells.

In Gordondale, Birchcliff plans to drill and bring on production a total of 8 wells on 2 pads in 2021. Birchcliff has successfully completed the drilling of its first 4-well pad (05-07) which is targeting multi-interval cube style development of the Montney D1, Montney D2 and Montney C intervals. Completion operations on the pad have commenced and the pad is expected to be on production through Birchcliff’s infrastructure in Q2 2021.

Birchcliff currently has 2 drilling rigs at work, both in Pouce Coupe, drilling low-cost, liquids-rich natural gas wells. One rig is currently drilling the last well on a 10-well pad (14-6), where Birchcliff has leveraged its 2020 learnings to drive down per well costs through operational efficiencies, scale and repeatability and improve well performance using multi-interval cube style development. The second rig is drilling on an 8-well pad (14-28), which is offsetting the successful 04-04 pad discussed above. This pad consists of 6 Basal Doig wells and 2 Montney D1 wells.

The following table sets forth the wells Birchcliff has drilled in 2021, the wells expected to be drilled in 2021 and the total wells expected to be brought on production in 2021:

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