good update
Long Run Exploration Ltd. Provides an Operational Update
Press Release: Long Run Exploration Ltd. –
CALGARY, ALBERTA--(Marketwire - Nov 26, 2012) - Long Run Exploration Ltd. ("Long Run" or the "Company") (LRE.TO) is pleased to provide an operational update to the end of November, 2012.
Long Run has drilled 20.8 wells (net) in the fourth quarter to-date, with an additional 10 wells (net) planned for the remainder of 2012. Of those already drilled, 5.8 (net) have been horizontal wells targeting crude oil in the Montney zone in the Peace River area and 7 (net) have targeted the Viking zone in the Edmonton area. After the impact of the previously announced $180 million Saskatchewan Viking asset sale of approximately 1,900 boe per day, Long Run''s 2012 exit production rate is anticipated to be approximately 23,000 boe per day. 2013 annual average production volumes are forecast to be approximately 25,000 boe per day targeting balanced oil and natural gas production.
As indicated in the November 15, 2012 press release, Long Run has announced a 2013 capital spending program of between $260 - $270 million, with approximately 50 percent of forecast spending targeting crude oil in the Peace River Montney play at Normandville and Girouxville. The Company also plans on spending approximately 30 percent of 2013 planned capital spending on the Edmonton Area Viking play at Redwater targeting light oil. Exploration drilling, land acquisition, and seismic will make up approximately 10 percent of the 2013 budget. Long Run anticipates drilling approximately 130 wells (net) in 2013.
PEACE RIVER MONTNEY OIL PLAY
Long Run is currently producing approximately 7,400 boe per day from both the Normandville and Girouxville properties, of which approximately 60% is crude oil. Operating costs have been consistent at approximately $8.50 per boe. As part of the 2013 capital budget, the Company plans to drill more than 50 wells in these properties.
As a result of changes to drilling and well trajectory design, Long Run has reduced drilling days from an average of more than 11 days to just over 8 days on the most recent 6 wells. Production rates have increased due to changes in completion methodology. These changes to completion methodology have increased average initial production rates while maintaining drill, complete, and tie-in costs at $2.0 million per well. The Company''s most recent 12 wells recorded rates averaging more than 300 boe per day (70% crude oil) over the first 60 days of production.
Long Run believes that through ongoing refinements to well design, bit selection, and completion methodology, this play will continue to yield positive results with strong capital efficiencies.
EDMONTON AREA VIKING OIL
The Company is currently producing 4,000 boe per day, 88% crude oil, from the Redwater property. Capital spending throughout 2013 will be approximately $90 million with up to 70 wells planned.
Average drill times for this property have been consistently 5 days and we believe the reliability of our drill times will continue. Long Run believes that the current on-stream cost of approximately $1.2 million can be improved upon and efforts are underway to introduce efficiencies to reduce these costs. As part of the 2013 capital program, we are pursuing improved oil rates and EURs by further refining our drilling and completion techniques.
EXPLORATION
Long Run''s exploration efforts continue, anchored by a dominant land position of more than 600,000 net acres in the Peace River Arch. The Company has drilled initial exploratory wells in the Jack and Josephine areas and is planning on drilling at Flood before the end of the year. All of these exploratory wells target the Triassic Montney and Charlie Lake formations. The Company continues to expand the scope of exploratory drilling on the Peace River Triassic fairway and anticipate a number of 2013 wells will target new areas of Montney, Charlie Lake, and Doig potential. Earlier in 2012 Long Run drilled a Duvernay vertical test well to obtain reservoir information. Preliminary laboratory test results on core samples are encouraging and analysis is ongoing. We look forward to updating results in these projects as they become available.