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Kelt Sees +26% Production Growth YOY at 26.1 MBOEPD; Talks Montney Delineation

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   |    Thursday,August 09,2018

Kelt Exploration Ltd. reported its Q2 2018 results.

Production Highlights:

Q2 average production was 26,120 BOE per day, up 26% compared to average production of 20,684 BOE per day during the second quarter of 2017.

Quarter-over-quarter, daily average production in the second quarter of 2018 was 3% lower than average production of 26,978 BOE per day in the first quarter of 2018.

• Lower quarter-over-quarter production was primarily the result of major gas plant turnaround operations during the second quarter of 2018 at three of the main facilities that Kelt processes natural gas at, as previously announced by the Company in its press release dated July 5, 2018.

Ops - Talks Montney Delineation Success

At Wembley/Pipestone, after drilling the initial Upper-Middle Montney (D3/D4) discovery well located in the southwest corner of Kelt’s 102 section (65,280 net acres) Wembley/ Pipestone Montney land block at 00/04-01-072-08W6 in 2017, the Company followed up with a five-well exploration/delineation program in the first half of 2018 that has produced successful results. Short-term test results for the two Upper-Middle Montney (D3/D4) delineation wells located on the western edge of Kelt’s land block at 00/12-05-073-08W6 and 00/13-13-073-08W6 were previously provided in Kelt’s press release dated July 5, 2018.

• A third Upper-Middle Montney (D3/D4) delineation well located on the eastern edge of the Company’s Wembley/Pipestone land block at 00/09-04-073-06W6 has now been tested. After flowing the frac fluid back on clean-up, the well, over the last seven days of the test, produced average sales volumes of approximately 919 BOE per day (83% oil/NGLs and 17% gas). The Company is very pleased to see a successful test located on the eastern edge of its land block as part of its de-risking efforts.

• The fourth delineation well was drilled north of Wembley/Pipestone on the Company’s Valhalla/La Glace land block where Kelt owns an additional 51 sections (32,800 net acres) of Montney rights. The Upper-Middle Montney (D3/D4) well, 00/01-35-074-09W6, was tied-in to the Sexsmith Gas Plant for an in-line production test. The well had an IP28 rate (estimated sales volumes) of 1,413 BOE per day (68% oil/NGLS and 32% gas).

• The fifth delineation well was drilled on the northern part of the Company’s Wembley/ Pipestone land block. This well, located at 00/03-04-074-07W6, was drilled in the Middle Montney (D2) layer on a seismic anomaly, similar to the producing wells that Kelt owns at Valhalla/La Glace. After flowing the frac fluid back on a nine day clean-up, the well, over the last seven days of the test, produced average sales volumes of approximately 598 BOE per day (73% oil/NGLs and 27% gas). The Company plans to drill an Upper-Middle Montney (D3/D4) well from this pad at a later date.

With the success of the delineation drilling at Wembley/ Pipestone, Kelt has increased and extended the take-or-pay commitment with Tidewater Midstream and Infrastructure Ltd. at the proposed Pipestone Montney sour gas plant. Kelt has increased its commitment by 5 MMcf per day for a total commitment of 30 MMcf per day with a five-year extension for a term of ten years.

At Inga/Fireweed, the Company completed three wells from a single pad targeting each of the Upper, IBZ and Middle Montney intervals and expects to put these wells on-stream by early September 2018.

At Pouce Coupe, the Company is currently drilling a five-well pad. The fifth well is expected to be drilled by mid-September and all five wells are expected to be completed by October 2018.