Painted Pony Petroleum Ltd., at 23 mboe/d, is by no means the largest gas producer on the TSX, but the company achieved the highest percentage cut in operating costs of any TSX-listed gas producer during 2016, according to new data from CanOils.
There are 11 TSX-listed companies that produced more than 5 mboe/d comprised of over 70 per cent gas in 2016 in Canada. These companies range from senior producers like Tourmaline Oil Corp., 186 mboe/d, 87 per cent gas) to much smaller producers like Chinook Energy Inc. (6 mboe/d, 74.5 per cent gas).
Eight of this group of 11 managed to cut their combined operating and transportation costs in 2016 compared to 2015. Of these companies, Painted Pony cut operating and transportation expenses by the largest margin — 23.4 per cent to C$5.94 per boe — in 2016. This was primarily due to increased production positively offsetting several fixed operating costs, and the company also negotiated alternate delivery points for its NGL that improved trucking economics during the year.
Pine Cliff Energy Ltd. recorded the largest increase in operating and transportation costs in 2016 among these 11 gas producers. The company saw costs rise by 8.5 per cent to C$9.39 per boe. This increase was due to the integration of higher cost production into its portfolio after acquiring assets for C$185 million in the Viking and Ghost Pine areas of Central Alberta in December 2015.
Source: CanOils, click here to find out more.
Painted Pony was also one of only two companies in the group of 11, alongside Crew Energy Inc., that increased pre-hedging operating netbacks in 2016 compared to prior year. Painted Pony achieved an increase of 30 per cent, to C$8.06 per boe, in 2016, while Crew saw pre-hedging operating netbacks rise 9.3 per cent, to C$11.50 per boe.
Every other company in the group saw pre-hedging netbacks fall year-on-year, the largest drop of 42.9 per cent (to C$5.80 per boe) being recorded by Bellatrix Exploration Ltd. The company attributes this fall to a combination of lower realized commodity prices and higher production expenses.
Mark Young is a senior oil and gas analyst with CanOils, which is owned by Daily Oil Bulletin publisher JWN.