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Kelt Exploration Ltd T.KEL

Alternate Symbol(s):  KELTF

Kelt Exploration Ltd oil and gas company. The Company is focused on the exploration, development and production of crude oil and natural gas resources in northwestern Alberta and northeastern British Columbia. The Company's assets are comprised of three operating divisions: Wembley/Pipestone in Alberta; Pouce Coupe/Progress/Spirit River in Alberta, and Oak/Flatrock in British Columbia. The Company’s British Columbia assets are operated by Kelt Exploration (LNG) Ltd., a wholly owned subsidiary of the Company.


TSX:KEL - Post by User

Comment by PabloLafortuneon May 10, 2024 11:58am
80 Views
Post# 36033737

RE:56.8 MMcf Gas Processing added betwwen Q2 - Q4

RE:56.8 MMcf Gas Processing added betwwen Q2 - Q4The company stated that the 2024 production forecast range (36,000 to 39,000) depends on whether the CSV Albright plant is up and running at the beginning of Q4 or at the end. That indicates 12,000 boepd (and 4,000 bpd).

Nuvista I believe signed up for 25MMcf at the same plant and they're stated that this will give them additional capacity of 7,000 boepd.

The original Wembley facilities (plural) nameplate was 34MMcf from which actual production in 2023 was 9,344 boepd. To this we have to adjust for downtime So capacity was in the 10-11K. Extrapolating, the 50MMcf CSV Albright would be adding 15-16K boepd.

So the range of production to be added at CSV Albright according to the above is 12,000 to 16,000 boepd.

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The big story to me is in the updated presentation, page 32: the proposed 3rd party pipeline connecting Progress/Pouce Coupe gas gathering and Wembley. Reason is simple: even after CSV Albright is up and running, Kelt Wembley production will be constrained once again by the lack of plant capacity.

With the proposed Wembley-Pouce Coupe pipeline, Kelt will be able to process Wembley gas over at Progress/Pouce Coupe plants.  The combined plant capacity of Wembley and Pouce Coupe will be 241MMcf which is 7x what the original capacity (34MMcf) Kelt had at Wembley.

It will make for much better capital allocation decisions - when oil prices are high and NG is low, drill oil rich targets. When the reverse is true, turn on gassier wells (reduce capex at the same time). (Long term, if one believes NG will eventually take over, then oil rich targets should be drilled first and eventually exhausted  Short term, oil prices are much higher, oil rich targets should be drilled first.)

It would basically turn Kelt Alberta Montney and Charlie Lake into one larger connected play (similar albeit much smaller if you will to the way Tourmaline operates in the deep basin).

Combined the Alberta Montney and Charlie Lake reserves are 329MM boepd with 41% liquids or enough for 45,000 boepd for 20 years.. That is with 22% drilled locations at Wembley and almost nothing booked at Charlie Lake.

In the grand scheme. what makes sense is to exclusively drill more liquids rich targets first so that theoretically they reach 65,000 boepd in Alberta producing 45-50% liquids with the liquids mix sliding over time (similar to what's happening in the Permian - 2% oil growth right now equates to 10% natural gas growth).
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