Discoveries | Debt | Exploration & Appraisals | Production Rates | Forecast - Production | Capital Markets | Capital Expenditure | Drilling Program
Parex Plans 8 Test Wells for Remainder of 2015
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Parex Resources Inc. has announced its unaudited financial and operating results for the three months ended June 30, 2015.
Q2 2015 Financial and Operational Highlights
- Oil production averaged 27,025 barrels of oil per day (bopd) compared to annual production guidance of 26,500 bopd, a year-over-year increase of 36 percent and an increase from the prior period production of 26,729 bopd;
- Participated in drilling 3 wells (net 3.0)(2). Capital expenditures for the quarter were $37.2 million compared to $95.1 million in the comparative 2014 period. As a result Parex added to future development and appraisal drilling inventory with the 2015 oil discovery at Rumba and potential at Chachalaca;
- Closed a CAD$136.8 million gross (CAD$131.3 million net) bought deal equity financing issuing 14.95 million common shares at a price of CAD$9.15 per share;
- Eliminated long-term bank debt and generated a working capital surplus of $90 million at June 30, 2015 compared to net debt of $29.6 million at March 31, 2015. The Company's syndicated bank credit facility of $200 million is undrawn; and
- Demonstrated the sustainability of Parex. During the first half of 2015 Brent oil price averaged approximately $59.35/bbl, while our funds flow from operations has exceeded capital expenditures by $19 million, and the Company increased production from Q4 2014 without any development drilling.
Second Quarter Financial Summary
- In the first 6 months of 2015 Parex has generated $83.2 million of funds flow from operations against total capital expenditures of $64.2 million, organically improving its balance sheet by over $19 million. Parex anticipates it will continue to increase quarter-over-quarter oil production through ongoing optimization of existing wells, facilities de-bottlenecking and exploration drilling.
Rumba (Operated, Block LLA-26, WI 100%):
- The Rumba-2 well was drilled as a follow up to the Rumba-1 oil discovery at a location approximately 1 km northeast of Rumba-1. The Rumba-2 well encountered two reservoir intervals within the Mirador formation that are interpreted to be the same zones as encountered in Rumba-1. Rumba-1 commenced long term production on June 20th and has been producing at restricted rates up to 1,700 bopd from the upper Mirador reservoir with current BS&W of approximately 2%.
- The Rumba-2 well commenced testing on July 25th from the lower Mirador reservoir and the test rate has slowly been increased with the use of an electric submersible pump to the current rate of 1,350 bopd, which represents the current facility restriction. The BS&W from the well is under 1% and a total of 4,600 barrels of 19 API oil has been recovered from the test. After the one week short term test the Rumba-2 well will be placed on long term test with production from both Rumba-1 and Rumba-2 limited by current facility restrictions. After the results from the Bazar-2 well (discussed below), Parex will install an optimal facility for the long term production of the Rumba discovery.
- Parex spud the Bazar-2 exploration well on July 28, 2015 to test the Une formation on a separate structural closure with a planned horizontal departure of 2.2 kilometers. A secondary objective will be to test the northern limits of the Rumba pool. Following the mechanical failure in the drilling of Bazar-1, the Company has conducted a thorough technical analysis and developed a revised drilling plan for Bazar-2.
- The Chachalaca-1 exploration well was spud on June 25, 2015. Chachalaca-1 encountered 4 potential zones in the Mirador and Guadalupe formations with electronic log characteristics suggesting potential for oil production and with good oil and gas shows while drilling. A completion rig is on the well site and testing operations are underway.
- The first of a 2-3 well exploration program on Block LLA-32, the Guepardo-1 exploration well was spud on July 27, 2015 and is targeting the Mirador and Guadalupe formations.
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