Drilling & Completions | Quarterly / Earnings Reports | Second Quarter (2Q) Update | Financial Results | Capital Markets | Drilling Activity

Cardinal's Q2 Production Ahead of Forecast for 2018 at 20.5 MBOEPD

Share Print Bookmark    |    Thursday,August 02,2018

Cardinal Energy reported its Q2 2018 results.

Highlights:

• Drilled and completed two horizontal multistage fractured Glauconitic channel wells and one horizontal multilateral Ellerslie well in our Bantry, Southern Alberta area with initial rates well above expectations.

• Cardinal completed the annual review of its credit facility in the quarter and chose to leave the bank line unchanged at a conservative $325 million while extending the term by a year.  We continue to de-lever our balance sheet and expect to have our net bank debt reduced to under $200 million in Q3. Our last royalty disposition is expected to close in Q3 instead of Q2 as previously announced.  Cardinal expects to be able to continue to reduce our net debt in 2018.

• Revenue increased 65% in the second quarter of 2018 compared to the second quarter of 2017 which included 29% and 25% increases in light oil and medium/heavy oil realized pricing, respectively.

Q2 Overview

Our asset base continues to deliver consistent results with base decline coming in below our 10% forecast.  Quarter over quarter, our Q2 production declined at less than 2% despite no drilling activity coming on stream until the last week of the quarter, no acquisitions, a net disposition of 50 boe/d of non-core high operating cost assets and approximately 200 boe/d shut in due to storms.

Operationally, Cardinal’s focus for the first six months of 2018 has been to: maintain production; de-risk our lands for future drilling; and to identify and begin implementation of long lead-time capital projects that we expect will reduce future operating costs.

In Southern Alberta, following up the Company’s successful Q1 stratigraphic test well program, three new producers were drilled in Q2.  The drill program targeted two Glauconitic channels and one Ellerslie sandstone target.  Collectively the wells have come on-stream at a combined rate in excess of 1,100 boe/d (89% oil) with a total drill, case and complete costs of approximately $5 million.  The positive results from these wells also set up 15 to 20 additional offset drilling locations.

At Grande Prairie, the Company’s horizontal wells drilled over the past year continue, on average, to exceed expectations.  Two additional horizontals are planned for Q3.