Whitecap Resources Inc. has announced operating and unaudited financial results for its second quarter.
The company said it had an “exceptional” second quarter with record average production of 75,813 barrels of oil equivalent per day (boe/d), which was approximately 2,300 boe/d above its forecast of 73,000-74,000 on development capital spending of $66.3 million.
“Outperformance in the quarter was driven by strong results in southwest Saskatchewan and the Deep Basin Cardium program and our ability to reduce the impact of down-time due to scheduled turnarounds,” the company stated in a news release. “We also experienced favourable weather conditions in Saskatchewan which allowed for an earlier start to drilling operations than initially anticipated.”
The underlying business continues to be very robust as funds flow netback (prior to hedges) increased 37 per cent to $34.46/boe compared to $25.19/boe in the second quarter of 2017, and increased 25 per cent from $27.64/boe in the first quarter of this year.
In southeast Saskatchewan, the first drill-out reactivation program for Weyburn commenced late in the second quarter with the first two of first wells completed. This will be followed by a four-well carbon dioxide expansion/rollout program and a 12-well infill drilling program in the second half of the year.
In west-central Saskatchewan, the company drilled a total of 34 (33.3 net) horizontal Viking wells, of which 53 per cent were extended reach horizontal (ERH) wells. Due to program efficiencies and reduced spud to rig release times, drill, complete, equip and tie-in (DCE&T) costs are trending five to 10 per cent below forecast with early time production results trending at or above their type curve expectations.
In southwest Saskatchewan, the two drilling rig program is proceeding as expected with 11 (7.0 net) horizontal oil wells being drilled in the second quarter. This includes six (4.2 net) Atlas wells, three (1.6 net) Roseray wells and two (1.2 net) Upper Shaunavon wells. To date, these wells have added over 800 barrel of oil per day net production.
More than 50 per cent of second quarter capital spending was associated with enhanced oil recovery (EOR) and waterflood optimization, expansion and maintenance which will have a significant impact on the mitigation of base production declines on this property and, in turn, enhancing the assets growth profile.
For the second half of 2018, the company currently plans to drill an additional 104 (80.3 net) wells across all of its business units with significant programs focused in southwest Saskatchewan, southeast Saskatchewan, west central Saskatchewan and the Alberta Deep Basin programs.
With the exceptionally strong operational results that they have achieved on its assets to date, the company is increasing its annual production guidance for 2018 to 74,000–75,000 boe/d from its previous guidance of 73,600–74,800 boe/d on an unchanged development capital program of $450 million.