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Pat Carlson hits it out of park with Journey East Duvernay

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Oil Summary (C-*MKTOIL) - Market Summary

 

Energy Summary for April 16, 2019

2019-04-16 20:28 ET - Market Summary

by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery added 65 cents to $64.05 on the New York Merc, while Brent for June added 54 cents to $71.72 (all figures in this para U.S.). Western Canadian Select traded at a discount of $8.47 to WTI, unchanged. Natural gas for May lost two cents to $2.57. The TSX energy index added a fraction to close at 163.63.

Alex Verge's Alberta-focused Journey Energy Inc. (JOY) shot up 54 cents to $2.75 on 78,100 shares, pleasing investors with the most comprehensive update yet on its assets in the emerging East Duvernay play. Over two years have passed since Journey first mentioned the Duvernay in early 2017. It was not until early 2018 that Journey began to hype the play as a potential core area, and it was not until August, 2018, that it got to work in earnest by bringing in a joint venturer. That would be Kitwetinohk Resources Corp., or KRC, a private company led by Pat Carlson. Mr. Carlson is the founder and past chief executive officer of Alberta Montney producer Seven Generations Energy Inc. (VII: $9.89). Coincidentally, the above-noted Mr. Verge, who is Journey's president and CEO, previously held those roles at a different Alberta Montney producer, NuVista Energy Corp. (NVA: $4.87). Now both men are hard at work in the East Duvernay. Under the terms of the agreement with Journey, KRC became the operator of the joint venture and was required to complete two initial wells. The wells were spudded last year but were not ready for testing until last month.

Now the test results are in, to the great excitement of Journey, which described them no fewer than three times as "encouraging." The first well has tested at 968 barrels of oil a day and 1.5 million cubic feet of gas a day (or about 1,129 barrels of oil equivalent a day), while the second well has tested at 1,017 barrels of oil a day and 2.27 million cubic feet of gas a day (or 1,395 barrels of oil equivalent a day). These results are from 48 hours of testing. Although two-day tests can only provide so much information, the results are indeed encouraging, especially the oil rates. For some context, recent Duvernay wells drilled by companies such as Baytex Energy Corp. (BTE: $2.80) and Paramount Resources Ltd. (POU: $2.80), which are respectively north and south of the Journey/KRC joint venture, indicate IP30s (30-day initial production rates) in the neighbourhood of 500 barrels of oil a day. Investors will have to wait a little longer to see how Journey and KRC's first wells stack up.

Read more at https://stockhouse.com/companies/bullboard/t.vii/seven-generations-energy-ltd?postid=29636750#j8qllmjOi9sMpPVE.99