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Peyto Focuses on Shallow Cardium Ops in Q2; Talks Production

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   |    Wednesday,August 08,2018

Peyto Exploration & Development reported its Q2 2018 results.

Highlights:

  • Production per share down 6%. Second quarter 2018 production of 549 MMcfe/d (91,547 boe/d) was down 6% from Q2 2017. Peyto deliberately deferred 15 MMcf/d of unhedged dry gas production in the quarter

Focus on Shallow Cardium Drilling

The limited Second quarter 2018 activity was largely focused in the Greater Sundance area on the Cardium play with all wells drilled after breakup in June. In total, 7 horizontal wells were drilled.

Horizontal well drilling costs in Q2 2018 were lower than previous quarters due to a focus on the shallower Cardium formation which has become cheaper to drill with a more efficient drilling design.

Peyto’s completion design in the Cardium involves significantly more frac stages and 2-3 times more water which increased total average completion costs but results in lower cost per frac stage. Going forward, Peyto expects that total drilling and completion costs per well will be less than the total in previous years but with completion costs likely exceeding drilling costs. The following table illustrates the progression of cost optimization as Peyto works to continuously lower overall development costs to ultimately generate greater returns:



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