RE:RE:RE:Petrinex March 2022I agree that SDE shot themself in the foot with guiding too conservatively. I'll give them a pass as the outperformance seems mostly related to the Gold Creek wells and they haven't controlled that acreage for very long, those numbers should be revised higher with Q1: would be great to get specific well results or aggregate results by business unit.
I think production will moderate in the middle of the year due to spring break up but would expect an increase in the budget for the second half, both more wells and cost inflation. Exit production of 78k boe/d at this pricing would vaporize debt.
The question becomes: what to do with the excess cash. Soon there won't be debt to pay off and existing production should be generating a healthy FCF yield. Increased capex can be part of it: lower per unit operating costs by utilizing infrastructure, but I think there is a limit on how much they can drill, between equipment availability and processing capacity.
Curious how production works out at Karr and Simonette, and Pouce Coupe