Q1 Earnings Commentary is pretty bullish
https://www.newswire.ca/news-releases/altura-energy-announces-first-quarter-2021-financial-and-operating-results-874743233.html
OUTLOOK
Management is excited to get back to drilling in the Rex pool and plans to drill two (1.8 net) new wells at Leduc-Woodbend in the summer of 2021 with production additions in July and October, respectively. With added production from the two new wells, improving commodity prices and a more favorable hedge book, Altura is forecasting substantial adjusted funds flow1 growth in the second half of 2021 and a decrease in net debt1.
At current commodity prices, management believes that over the next five years the Corporation could double production at Leduc-Woodbend and completely eliminate debt while drilling only half of its booked locations4. Additionally, if conservative levels of debt continue to be utilized, management believes it has the economic inventory at Leduc-Woodbend to further accelerate production growth. See Altura's corporate presentation at www.alturaenergy.ca for further details on Altura's long-term plan.
Altura has increased its capital expenditure budget for 2021 from $6.0 million to $7.5 million to advance several parallel initiatives:
- Altura will continue to improve its extended reach horizontal ("ERH") well design by increasing the lateral length in one of the proposed wells from 2,000 to 2,300 meters (a 15% increase). This extension will accommodate a commensurate increase in total frac stages from 74 to 85. Previous success with longer horizontal laterals and increased frac stages in the Rex pool illustrates improved production and reserve capture. This further optimization is expected to result in even greater well performance which will reduce the number of required wells and decrease the capital required to develop the remainder of the Rex pool.
- The Corporation is excited to implement a waterflood pilot project at Leduc-Woodbend. Success of the pilot would result in gas/oil ratio ("GOR") suppression, reservoir pressure maintenance and attenuated production declines which could add material upside to Altura's Rex oil pool reserve recoveries.
- In the first quarter of 2021, Altura modified the artificial lift system in three (2.7 net) Rex wells to a more robust rod string resulting in improved runtime efficiency which is expected to reduce future workover costs. The expanded budget will enable the conversion of an additional nine (7.9 net) wells in 2021.
Altura expects to close the final disposition of a 1.375% working interest for $875,000 on June 30, 2021 as disclosed in the April 28, 2021 news release.
While 2020 was primarily a defensive year of survival for many junior oil weighted producers, 2021 is looking to be a year of opportunity. Altura's Leduc-Woodbend asset has a large economic well inventory of 47 (36.6 net) booked locations4 and 104 (67 net) additional drilling opportunities4 and at current commodity prices can self-fund growth within cash flow while improving its strong balance sheet. The Altura team is very excited and poised to refocus efforts towards creating value for shareholders in 2021 and beyond.