Exploration & Production | Drilling / Well Results | Capital Markets | Private Equity Activity

Cequence Talks Latest Ansell Well Results, Reserve Analysis

Email    |    Print    |    Bookmark

You Need to login first

   |    Monday,February 24,2014

Cequence Energy Ltd. has detailed its 2013 year end reserves and an update of its preliminary drilling results at its Ansell property.

Reserve Highlights

Cequence's 2013 year end reserves reflect a continued successful delineation of its Simonette property in the Deep Basin of Alberta.  The growth in reserves further substantiates management's views that the Company's assets contain significant resource potential. 

The following highlights are based on the reserve report dated February 20, 2014 and effective December 31, 2013 prepared by GLJ Petroleum Consultants:

• Increased proved reserves by 19% from the prior year to 55 MMBOE;
• Increased proved plus probable reserves by 24% from the prior year to 113 MMBOE;
• Increased total proved plus probable reserves at Simonette by 28% from the prior year to 98 MMBOE;
• Achieved finding, development and acquisition costs (including changes to future development capital) of $11.17 per boe on a proved plus probable basis and $13.87 per boe on a proved basis;
• Achieved finding and development costs (including changes to future development capital) of $10.10 per boe on a proved plus probable basis and $11.76 per boe on a proved basis;
• Increased the net present value before income taxes of the Company's proved plus probable reserves by 30% from the prior year to $1.0 billion or $4.91 per share (using a discount rate of 10%); and
• Replaced 691% of production with proven plus probable reserves.

Ansell

Cequence recently competed 2.0 (.98 net) Wilrich wells at Ansell with strong initial test rates.  The 1-25-50-18W5 well tested for 53 hours at a final rate of 17.7 mmcf/d at a flowing casing pressure of 2,270 psi.  The second well at 15-36-50-18W5 tested for 50 hours at a final rate of 15.9 mmcf/d at a flowing casing pressure of 1,473 psi. These two wells were both drilled from the existing 1-36-50-18-W5 pad site. Cequence anticipates both wells will be on production before May 2014 . In total 5 (2.45) net Wilrich wells are planned for the first quarter of 2014.  Four of the wells are subject to farm-out provisions whereby Cequence is paying 15% of the capital costs to drill and complete the well in exchange for a 49% working interest. Field production is currently restricted by facility capacity. Construction is underway on compression facilities with an initial capacity of approximately 40 mmcf/day.  The gathering system, also under construction, will have capacity for 100 mmcf/day. The expected capital cost of this facility project is approximately $15 million based on its 49% working interest.

Reserves

In accordance with NI 51‐101, GLJ prepared the GLJ Report for the oil, natural gas liquids and natural gas reserves attributable to the properties of Cequence.

The tables below are a summary of the oil, NGL and natural gas reserves attributable to the properties of Cequence and the net present value of future net revenue attributable to such reserves as evaluated in the GLJ Report based on forecast price and cost assumptions.

Summary of Oil and Gas Reserves