CALGARY, Oct. 15, 2013 /CNW/ - Connacher Oil and Gas Limited (News - Market indicators) ("Connacher" or the "Company") provides the following operational update for the third quarter 2013 ("Q3 2013") and the timing and call-in details for the Q3 2013 investor conference call.
Production
Connacher's Great Divide production for Q3 2013 averaged 11,800 bbl/d based on field estimates. Production was 2% higher than the prior quarter (Q2 2013 11,572 bbl/d).
September production averaged 12,100 bbl/d based on field estimates. During the month the four infill wells at Pod One were converted to production. The infill wells were each steamed for approximately 30 days and all four wells were on production by the end of September. Connacher had previously expected that these wells would be on production by the end of Q4 2013.
Operations
The Company began steaming the four new well pairs at Pad 104 at the end of September. These wells are expected to be ready to convert to production after approximately 90 days.
The SAGD+® process trial is continuing on 203-1 through to the end of 2013. The trial on 203-4 was discontinued to allow for flexibility in the ongoing trial at 203-1. Results from the SAGD+® process continue to demonstrate commerciality through increased recovery and lower steam oil ratios.
A key operational focus has been to reduce the amount of diluent used in our process and dilbit sales. The diluent blend ratio ("DBR") averaged 18.5% in Q3 2013 based on field estimates, which is the lowest average ratio achieved in a quarter to date.
Marketing
In Q3 2013 bitumen volumes moved to customers outside of Alberta averaged approximately 10,850 bbl/d (92% of total bitumen sales) compared to approximately 9,200 bbl/d (80% of total bitumen sales) in Q2 2013. The balance of the bitumen sales were to intra-Alberta markets.
Connacher successfully completed the first test of an 80 car unit train in September. Moving dilbit utilizing unit trains can significantly reduce the turnaround time of rail cars from customers and materially reduce transportation costs.
For the balance of 2013, the Company has 7,650 bbl/d of production hedged at minimum WTI prices ranging from US$89-$100. For 2014, the Company has approximately 4,700 bbl/d hedged at minimum WTI prices ranging from US$90-$96.
Q3 2013 Conference Call Details
Connacher will host its quarterly conference call on November 14, 2013 at 8AM MDT. Interested participants can call in to (888) 231-8191. Please use the Conference ID# 87705434. Participants are encouraged to call in 5 minutes prior to commencement.
About Connacher
Connacher is a Calgary-based in-situ oil sands developer, producer and marketer of bitumen. The Company holds a 100 percent interest in approximately 500 million barrels of proved and probable bitumen reserves and operates two steam assisted gravity drainage ("SAGD") facilities located on the Company's Great Divide oil sands leases near Fort McMurray, Alberta.
Forward Looking Information
This press release contains forward looking information including expectations for the timing of converting wells to production, the continuation of SAGD+® process trials and the continued sustainability of the reduction in the DBR.
Forward looking information is based on management's expectations regarding the Company's future financial position, the Company's future growth, results of operations and production, future commodity prices and foreign exchange rates, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, environmental matters, business prospects and opportunities and future economic conditions. Forward looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates, the uncertainty of geological interpretations, the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), risk of commodity price and foreign exchange rate fluctuations, risks associated with the impact of general economic conditions, risks and uncertainties associated with maintaining the necessary regulatory approvals and securing the financing to proceed with the operation and continued expansion of the Great Divide oil sands project.
In addition, reported average production levels may not be reflective of sustainable production rates and future production rates may differ materially from the production rates reflected in this press release due to, among other factors, difficulties or interruptions encountered during the production of bitumen.
Additional risks and uncertainties affecting Connacher and its business and affairs are described in further detail in Connacher's Annual Information Form for the year ended December 31, 2012. Although Connacher believes that the expectations in such forward looking information are reasonable, there can be no assurance that such expectations shall prove to be correct. The forward looking information included in this press release is expressly qualified in its entirety by this cautionary statement. The forward looking information included herein is made as of the date of this press release and Connacher assumes no obligation to update or revise any forward looking information to reflect new events or circumstances, except as required by law.
SOURCE Connacher Oil and Gas Limited
For further information:
Contact
Chris Bloomer
Chief Executive Officer
Greg Pollard
Chief Financial Officer
Connacher Oil and Gas Limited
Phone: (403) 538-6201
Fax: (403) 538-6225
Suite 900 - 332 6th Avenue SW
Calgary, Alberta T2P 0B2
inquiries@connacheroil.com
www.connacheroil.com
