Following a nearly two-year hiatus, drilling activity resumed at Kakwa Central last fall with the improvement in oil prices.
Oil/gas production should show significant gains in 2022, as new wells come onstream.
Capital investment in Kakwa totalled $3.2 million for the year (2020: $3.9 million) with daily production averaging 1,174 boe/d (2020: 1,609 boe/d) comprising of 3.5 MMcf/d of natural gas (2020: 4.1 MMcf/d) and 589 bbl/d of condensate and natural gas liquids (2020: 925 bbl/d).
Total proved and probable reserves as of December 31, 2021, were estimated at 31.5 MMBoe (2020: 31.5 MMBoe) with a before tax NPV-10% of $234.2 million (2020: $134.5 million). The Company currently holds 40,800 (17,880 net) acres in the Kakwa area.
At Kakwa Central, the operator spud three wells in the year compared to two wells in the prior year.
Completion activities are underway in the first quarter and the wells are scheduled to be on production early in the second quarter. The Company participated in all three wells (0.75 net) spud in 2021 compared to only one (0.25 net) well the prior year.
Limited activity was conducted at the Kakwa North acreage, following the acquisition of the operator by a mid-size company in the second quarter.
The Company holds a 5% royalty interest in the four original farm-in wells converting into a 50% working interest after payout.
The Company anticipates that based on current commodity prices, these wells could achieve payout during the latter part of 2022.
With the improvement in commodity prices, the operators are assessing drilling programs for both joint ventures for the next 12-18 months.
The Company’s participation will depend on among other things, available cash flow from operations and incremental financial liquidity through potential asset dispositions, equity or debt issuances. There can be no guarantee that such liquidity will be available when required on terms acceptable to Questerre.
Antler, Saskatchewan
Consistent with prior years, activities at Antler focused on optimizing existing production and expanding the pilot secondary recovery scheme to increase recovery of the oil in place.
With the exception of routine operating expenditures, including workovers, no material capital was invested during the year (2020: $0.3 million). Daily production averaged 278 bbl/d (2020: 319 bbl/d).