News: West Hazel Operations Are Stable Hillcrest says West Hazel operations are stable
2020-03-12 08:51 MT - News Release
Mr. Donald Currie reports
HILLCREST SHAREHOLDER UPDATE
Hillcrest Petroleum Ltd. has provided an update on current operations.
Oil production operations at Hillcrest's West Hazel field are stable, with production revenues expected to continue to cover operating expenses in the current low oil price environment.
In addition, activities to connect the field to the regional power grid to power field operations is underway and expected to be completed by end March. Field electrification is expected to reduce monthly operating costs by approximately 20% and reduce operational carbon footprint significantly, by replacing diesel generators currently in use.
Plans and permits are in place to re-complete an existing well in an up-hole, oil bearing, zone which is estimated to add 50-100 barrels oil production per day. Costs for the well re-completion and associated production equipment is expected to be less than CDN $200,000.
Additional production from the well recompletion is expected to provide a disproportionate increase in operating income, as a high proportion of the field costs are fixed. Sales revenues from additional oil production would therefore accrue directly to operating profits without increasing operating costs.
Hillcrest is in discussions with parties to secure funding for the re-completion and the Company is confident funding can be sourced.
"Since re-starting production from the West Hazel field early last year, we have gained valuable insight into opportunities to add value by optimizing our operations and implementing environmental best practices." states Don Currie, CEO of Hillcrest Petroleum. "The initial upgrades of facilities and the current field electrification puts the Company in a better position than most producers, in that we are able to maintain positive operating cash flows from the field, even after the recent dramatic drop in oil prices.
In addition, Hillcrest has identified relatively inexpensive re-completion potential in the field and will proceed when funding is obtained.
We are continuing to pursue our stated objective of acquiring and further developing, producing assets in the Western Canada Basin and will update our shareholders as material events occur."
We seek Safe Harbor.
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