more...please win Habs...2nd intermission Jim Saunders's Twin Butte Energy Ltd. (TBE) lost 39 cents to $1.86 on 66.7 million shares, after reducing its production guidance. The full-year forecast is now 22,000 barrels of oil equivalent a day, down from 23,500, and the year-end target is 22,500, down from 24,500. Twin Butte blamed higher-than-expected declines from vertical heavy oil wells in its core Lloydminster area in Alberta/Saskatchewan. It emphasized that it has been taking steps to mitigate such declines. For example, it acquired lower-decline medium oil assets in the nearby Provost area late last year, and it is shifting its drilling technique toward horizontal wells, which made up 52 per cent of the wells drilled in the first quarter, compared with 3 per cent in 2012. The market was unconvinced. Twin Butte's position was not helped by its admission that spring breakup is proving a challenge, or by the "revised" $365-million bank line it expects before the end of the month. "Revised," as it so often does in these cases, means "reduced." Twin Butte did not mention that the bank line was previously $400-million. It is being lowered because of technical revisions in the company's 2013 reserve report.
All in all, it is a steep hill that lies before Twin Butte's new management. Rob Wollmann is taking over as president, and David Middleton as chief operating officer, replacing Bruce Hall, who became COO in 2011 and president in January. The two newcomers were most recently at Penn West Petroleum Ltd. (PWT: $10.09). Mr. Wollmann was senior vice-president of exploration and Mr. Middleton was executive vice-president of operations engineering. Before that, Mr. Wollmann was president and chief executive officer of Trafalgar Energy, which merged with Midway Energy in 2009; the resulting company was sold to Whitecap Resources Inc. (WCP: $14.58) in 2012. One of Mr. Wollmann's tasks will be to continue to defend Twin Butte's dividend. The company introduced its 1.6-cent monthly payout in January, 2012, and since then has constantly had to reiterate its safety to a (generally skeptical) market. The current yield is 10.3 per cent. Still, Twin Butte has never cut the dividend, even after its stock fell to a low of $1.60 last summer.