Congrats Crew on the New Record Production Rate! Nice update from Crew today as they continue to execute their 2 year plan.
Q1 2022 showed a 27% increase over Q1 2021 which is outstanding given the initial high production decline on the Montney gas wells.
From their update it appears that Crew has brought 8 extended reach horizontal ultra-condensate rich wells on stream in late Q4/21 and Q1/22 from the 4-14 pad which have been flowing for periods of between 11 to 66 days before being shut-in for tie-in to permanent facilities. Crew drilled 10 wells at the 4-14 pad so that leaves 2 wells that Crew has available to maintain annual production levels as needed.
At the 4-21 pad, Crew states that there are 2 Upper Montney "B" zone wells that have been producing for 90 days ("IP90") with average per well sales rates of 1,486 Boe/day. Crew drilled 5 wells at the 4-21 pad so that leaves another 3 wells that Crew has available to maintain annual production levels as needed.
At the 4-17 pad in Groundbirch, Crew drilled 5 additional wells that will evaluate two additional Montney zones. Crew states that the first 3 Groundbirch wells are still exceeding their 2P type curve forecasts, with an average per well raw gas production rate after 150 days ("IP150") of 8,976 mcf per day. Simply amazing! I can’t wait to see how the other 5 wells perform when they are brought on stream during the second half of 2022.
As I suggested in a prior post, Crew now has the luxury of being able to set their production at a rate that they deem sustainable without incurring additional capital costs above their $80 -$95 million budget. For Q1 2022 the appropriate production rate was 33,300 Boe/day or 300 Boe/day above the upper end of their 2022 guidance.
Crew now has 5 DUC wells at Groundbirch and 5 drilled and completed wells at Greater Septimus available to bring onstream as needed in order to maintain or exceed their 2022 production guidance or to carry forward to 2023. This is a very enviable position to be in as a producer, instead of constantly trying to find every molecule of gas available in order to meet production targets.
With no increase to their capital program announced yet, it appears that Crew will be using AFF to reduce debt and strengthen their balance sheet. Awesome!
For 2023 it appears Crew has identified 2 pad locations at 11-27 (7 wells) and 2-24 (10 wells) in Greater Septimus (Presentation slide 17) to grow and maintain production. There are no new pad locations indicated at Groundbirch as of yet, but since they have 1,919 locations identified, I’m sure they will add a few.
Finally, I had a chuckle at the last line in the press release today: "We look forward to reporting our Q1/22 financial results on May 5th, 2022." Although I don't salivate over the financial reports as much as GONATGASGO possibly does, I am looking very forward to seeing them!
Nice work Crew, I appreciate all of the hard work!
GLTA
BTOS