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Northern Blizzard Details H2 Drilling, Oil Sands Development

Share Print Bookmark    |    Tuesday,August 11,2015

Northern Blizzard Resources Inc. has announced its operating and financial results for the three and six months ended June 30, 2015.

Operations

Cactus Lake

• Capital expenditures at Cactus Lake for the second quarter of 2015 were $8.0 million, mainly related to the Bakken polymer flood. Average production in the second quarter was 7,525 boe/d, a 5% decrease compared to the first quarter of 2015.

Cactus Lake Bakken Polymer Flood

• Phases 1 and 2 of the Bakken polymer flood continue to demonstrate positive response. Over 30% of the producers in Phase 1 are demonstrating positive polymer flood response (i.e. increasing oil rates and decreasing water cuts). Polymer injection commenced at Phase 1 in early 2013. In addition, over 20% of the producers in Phase 2 are responding to the polymer flood initiated in early 2014.
• Phase 3 expansion of the Bakken polymer flood commenced in March 2015 with the inclusion of 16 injectors and 36 producing wells into the existing scheme. The Phase 3 expansion is anticipated to be completed in early 2016, adding an additional 48 producing wells and 14 injectors.

Winter

• Capital expenditures at Winter for the second quarter of 2015 were $0.7 million . Average production in the second quarter was 3,550 boe/d.
• In the second half of 2015, Northern Blizzard is planning to drill seven producers and three water disposal wells at Winter. Work is currently underway to further optimize the water disposal system in preparation of the anticipated increase in volumes.

Coleville

• Capital expenditures at the Coleville Viking light oil project for the second quarter of 2015 were $0.4 million. Average production in the second quarter was 1,270 boe/d, a 23% decrease compared to the first quarter of 2015.
• The 2015 capital program at Coleville includes the drilling of 21 wells, of which 3 (3.0 net) wells were drilled in the first quarter of 2015. The remaining wells are scheduled to be drilled in the second half of 2015.

Thermal Heavy Oil – Steam Assisted Gravity Drainage (SAGD)

• Plover Lake SAGD production averaged 1,090 boe/d during the second quarter of 2015, compared to 760 boe/d during the first quarter of 2015. Ramp up of oil production has continued since quarter end, with July production averaging 1,440 boe/d. Production is expected to exceed 2,000 boe/d later in 2015. Northern Blizzard acquired two additional 25 mmBTU steam generators and is currently evaluating plans to deploy these units to expand the Plover Lake steam generating capacity from 6,000 to 9,000 barrels of steam per day.
• At Cactus Lake North, Northern Blizzard received regulatory approval to proceed with the first phase of the SAGD project. The Company is currently working on preliminary design and development planning for this SAGD project area.

Second Quarter 2015

• Capital expenditures for the second quarter of 2015 totalled $14.4 million. Spending on facilities and pipelines was $9.9 million and related mainly to polymer powder for the Cactus Lake polymer project and advancing the Cactus Lake SAGD project.
• Net debt at June 30, 2015 of $366.5 million decreased by 10% from the end of the first quarter of 2015. The decrease was due to funds from operations that exceeded capital expenditures and cash dividends by $36.5 million and an unrealized foreign exchange gain on Northern Blizzard's senior unsecured notes caused by a stronger Canadian dollar on June 30, 2015 relative to March 31, 2015.