Twin Butte Energy Ltd TBTEF

still doesn't justify 33% drop

[ajee333]

Although the transition away from vertical heavy oil well concentration is ongoing and is showing early success, Twin Butte continues to experience higher than anticipated production declines on a number of its higher productivity vertically drilled heavy oil wells. Ultimate recovery factors in these pools are still anticipated to be on forecast and consistent with other similar pools in the area.  These higher declines are not being experienced on the Company's horizontally drilled heavy oil wells or the Company's Provost are a medium oil production. Because of this, the Company now anticipates that its yearend 2014 production will be approximately 22,500 boe per day and average production for 2014 will be approximately 22,000 boe per day, a six to eight percent reduction from earlier estimates, based on full year capital spending of $140.6 million. Assuming, for the remainder of 2014, WTI pricing of $97.00 per boe, a US$/Cdn$ exchange ratio of 1.09, and a WTI to WCS heavy differential of $(24.50) per boe, the Company anticipates that its 2014 annual cash flow will be approximately $201 million. As long as in the next earnings report there isn't more bad news about a more rapid decline, there should be a nice share boost. And with them switching over to horizontal wells they should hopefully avoid this issue again.