Delphi Energy (TSX: DEE, Stock Forum) continued advancing its exploration efforts at Bigstone Montney located approximately 250 kilometres west-northwest of Edmonton, Alberta, when the company announced an operations update.
According to the news release, the company successfully completed its sixth Montney horizontal well of the year at 3-26-59-23 W5M (“3-26”) in East Bigstone. The 100%-owned 3-26 well was drilled to a total depth of 5,593 metres with a lateral length of 2,601 metres. The well is being equipped to produce through the company's wholly-owned compression and dehydration facility and is anticipated to be onstream in the next two weeks.
The company also finished drilling its seventh Montney well of the year at 13-23-60-23 W5M (“13-23”). The 100%-owned 13-23 well was drilled to a total depth of 4,995 metres with a lateral length of 2,161 metres. Completion of the well is expected to commence in the next two weeks.
Drilling has begun at the company's eighth Montney well of the year at 16-27-60-23 W5M (“16-27”). The company holds a 87.5% working interest in 16-27.
Corporate production averaged approximately 11,000 boe/d during September 2014 with production from the Montney formation at East Bigstone averaging approximately 7,700 boe/d, an eleven-fold increase over production in February 2013.
Cash operating income during September 2014 was approximately $6.2 million, equal to an annual run-rate of approximately $75.0 million.
Production data continues to support the robust economics of the company's East Bigstone Montney project.
A landslide in the Bigstone area on October 22, 2104 shut down the Alliance pipeline lateral connecting the Bigstone West Gas Plant. The company has been able to migrate any production loss through alternative transportation arrangements, mitigating any impact on the company's Montney production.
The company recently bought up eight gross sections of Montney rights directly offsetting its current Montney production for $8.8 million as well as closing the West Bigstone acquisition of approximately 430 boe/d for a purchase price of $9.0 million.
Certain interests from its Hythe property were disposed of for gross proceeds of $16.0 million. The company has decided not to sell its Wapiti assets at this time as the potential purchaser was unable to act within the terms of the revised LOI which expired October 9, 2014.
Production for the fourth quarter is expected to average 11,200 to 11,500 boe/d, a 26% increase over the matching 2013 period.
Delphi Energy was in the news recently when the Calgary-based company provided another Montney update at the beginning of September.
Shares were down 3.35% on the news to $2.31 per share.
Currently there are 155.3m outstanding shares with a market cap of $358.8 million.