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Chinook Energy Inc. Common CNKEF



GREY:CNKEF - Post by User

Comment by Miner1967on Sep 29, 2017 1:02am
176 Views
Post# 26757110

RE:Chinook's Montney: High IP, low cost, high Condensate (~20%)

RE:Chinook's Montney: High IP, low cost, high Condensate (~20%)
stockfy wrote:
Canaccord Genuity set a price target of CAD$0.65 for Chinook (CKE) a couple of months ago and I believe that it will raise this target after the latest impressive Montney results.

One of the key things about CKE's 4 latest Montney wells is not just about their low cost and high IPs that are almost double CKE's originally projected type curve, as noticed by GMP First Energy analyst Robert Fitzmartyn who noted that:


"The new Montney wells average 1,762 boe/d which is ahead of CKE's type curve expectation of 943 boe/d". 


It's also about the fact that they have about 20% Condensate which trades at a Premium to WTI and Canadian Light, see the chart below (it's the second chart from top to bottom of the article below):

https://www.oilsandsmagazine.com/energy-statistics/oil-and-gas-prices


By the way, the British Columbia lands typically produce significant amount of Condensate. And given that CKE's Montney acreage is 100% located in British Columbia, high Condesante volumes in the next Montney wells will most likely continue.
Specifically, BC produced 54,000 bblsd oil and liquids in 2015 and 34,000 bblsd was Condesate. So Condensate was 68% of BC's oil and liquids production in 2015.
 

British Columbia

 
Drilling rig in northern British Columbia

British Columbia produced an average of 8,643 cubic metres per day (54,000 bbl/d) oil and equivalent in 2015, or about 1.4% of Canada's petroleum. About 38% of this liquids production was light crude oil, but most of it (62%) was natural-gas condensate.


Links:
 
 





Remarkable difference from Alberta where the condensate share in oil and liquids production is only 2%, according to June's 2017 data. This is the reason Alberta still relies heavily on US imports to meet all of its diluent needs.
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