YES, I TOLD YOU: LOTUS CREEK OFFLOADS 1120+ INACTIVE WELLS ! Gear’s Lloydminster heavy oil assets have been the cornerstone of the Company since inception. In fact, prior to 2016, it was the only asset. In 2014, the heavy oil business unit was producing approximately 7,000 boe/d. Today it sits at 3,700 boe/d despite receiving a significant majority of invested capital over that period. During this time, Gear has developed these assets utilizing innovative drilling and production techniques, however, this has become increasingly difficult with inflationary capital and operating cost pressures, a depleted inventory of locations and tightly held offset land bases. Today, the Lloydminster assets are mature, characterized by declining base production, limited drilling inventory and nearly 1,400 legacy wells, of which more than 80% are inactive. At this stage of the assets life cycle, the assets are more appropriately owned by a major oil and gas company with a large area land position and operational synergies.
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