RE:RE:RE:RE:RE:RE:RE:National banksterThe 5 Groundbirch wells should come onstream pretty quickly as that Pad is already pipeline connected. They only holdup would be if the new zones they are completing in the 5 new wells are condensate rich, then they may require additional surface facilities. The 3 existing wells on that Pad are natural gas only, so they are easy to produce and process.
Dale mentions in the Q2 report that the 11-27 Pad they are currently drilling will be completed and onstream in Q1 2023. There are only 6 wells on the 11-27 Pad whereas their other Pads have had 8 or more wells, so I found that interesting.
Crew's production rates have always been difficult to predict and I have mentioned numerous times that their production capability based on the well rates in the presentations, are well above the guidance of 32,000 -33,000 boe/day.
Q2 is a prime example where Crew ramped up production to 35,000 Boe/day to capture the high commodity pricing no doubt and the additional 2000 boe/day will allow them to achieve their annual guidance should Q3 drop by 2000 boe/day due to plant turnarounds and wells being shut-in for offsetting completion activity. Crew appears to throttle back or open up their wells to make sure they match their guidance, which is good production practice.
Crew's Montney wells can have decline rates of 40% in the first year on new wells and then 10-15% per year after that. EXAMPLE: If Crew had 30,000 boe/day of existing production and wanted to add 10,000 boe a day of new production and replace the decline on your existing production, you would want to have approximately (14,000 boe/day new + 4500 boe/day existing) 18,500 boe/day of new production available to get you to 40,000 Boe/day. So they would need 48,500 boe/day which is in excess of their facility capacity. Perhaps that is why Crew is adding 4000 boe/day of additional capacity.
A very simplistic EXAMPLE and very, very WRONG but I hope you get my point. Crew will not be growing its production rate significantly with one new 6 well Pad but then again they really don't need to.
What has happened to Crew and many other E&P companies is because of the commodity price increase, Crew is cash flowing like it is already producing in excess of 40,000 boe/day using historical pricing, without having to spend the capital to reach that production level.
It is a game changer for the entire industry and it is why companies aren't drilling their brains out, they don't need to. Their revenue is way up without significant capital outlays and they can use their excess capital to reduce debt, buy back shares, increase dividends, etc.
Crew's new corporate plan to be announced Q4 will definately clarify things and I am looking forward to hearing about where they are heading.
The only problem they will have is trying to decide which of their seemilngly endless opportunities to pursue. A very nice problem to have.
So freakin exciting!
BTOS