Well Cost | Quarterly / Earnings Reports | Production | Second Quarter (2Q) Update | Key Wells | IP Rates-30-Day | Initial Production Rates | Drilling Program
Vermilion Increases Production in Q2 to 67,240 BOEPD; Lowers Well Costs an Average -29.4%
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Vermilion released its Q2 results. Highlights include:
- Average daily production in Q2 was 67,240 boe/d, a 4% increase from Q1 when production was 64,537 boe/d
- Placed an additional 13 (11.5 net) wells on production in Canada
- Canada well cost decreased 28.1% in the Cardium and 43.3% in the Midale
- US well well cost decreased 16.7% from US$4.2 million to US$3.5 million
Vermilion's Q2 average daily production results were 67,240 boe/d. This was a 4% increase from 64,537 produced in the previous quarter and a slight decrease from 64,285 boe/d produced in Q2 2016. Average daily oil production in Q2 was 28,525 bbls/d, which was a 6.3% increase from Q1 production of 26,832. Natural gas production in Q2 was 209.36 mmcf/d, which was a slight decrease from Q1's average daily production of 210.07 mmcf/d. During 1H 2017, Vermilion's average daily production was 65,896 boe/d which was a year-over-year increase of 1.6%. Average daily oil production in 1H 2017 was 27,683 bbls/d which was down -3.9% from Q1 2016. Average daily natural gas production was 209.71 mmcf/d, which was an increase of 4.8% from 200.02 mmcf/d in 1H 2016. Vermilion anticipates is it still on track to hit its 2017 production guidance range of 69,000 to 70,000 boe/d.
In Canada, Vermilion brought 13 (11.5 net) wells on production during Q2 for an overall number of 34 (27.6 net) wells placed on production in 1H 2017. The production from the new wells contributed to a 14% growth in production from the company's Canadian business unit. The company's Mannville program continues to deliver growth from its 15 (10.3 net) wells brought on production in 2017. These wells averaged an IP60 of 470 boe/d. Additionally, the company placed 5 Cardium wells and 14 (12.3 net) Midale wells on production during 1H 2017. In Cardium, the average well cost was $2.3 million on a per section basis compared to $2.3 million during the company's last Cardium program in 2014 when costs were $3.2 million, which was a decrease of 28.1%. In the Midale, costs per well in 2017 was $1.7 million which was a decrease of about 43.3% from the $3 million cost per well in 2014.
In the United States, Vermilion drilled 3 Turner Sands wells in Q1 that were put on production in Q2. These 3 wells are now producing a combined rate of 760 boe/d in the third month of production. Two of these wells are outperforming the type curve at rates 330 boe/d and 325 boe/d. The third well's peak IP30 rate was 140 boe/d with current production of 110 boe/d. The well costs for the 2017 drilling program in the United States was US$3.5 million, a decrease of 16.7% from US$4.2 million in 2016. Additionally, the new average lateral length was 5,300 feet compared to 4,600 feet in 2016.
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