Twin Butte - a real beauty
Twin Butte is an intermediate medium and heavy gravity oil producer.It has increased it's production from about 13,000 barrels per day to 16,263 barrels this year.Almost a 20% increase.It had a funds flow of about $35 million and it reduced it's debt by $15 million.It made some non-core asset dispositions which earned about $22 million.It also tightened up it's operating areas.Production was mostly in Saskatchewan.It has new growing fields in Frog Lake,Soda Lake and Wildmere.
It's capital spending was about $31 million with $22 million coming from asset dispositions.It drilled 31 wells with a 90% success rate.So now it has about 800 producing medium and heavy gravity wells.It will drill about 70 to 80 horizontal wells and 40 to 60 vertical wells in2014. This will likely increase production significantly for 2015 with their usual success rate.This means that there will be about 35 wells at Wildmere up from the present 4 or 5.
In addition to it's organic growth it made a significant acquisition;it acquired Black Shire Oil.Black Shire has a lot of wells in the Provost area of Alberta.This will become a second area of concentration of wells.Black Shire has about 7000 barrels of present production;added to Twin Butte production this will produce about 23,300 barrels for the fourth quarter of 2013 and 24,500 by 2014.This acquisition has
increased total debt by another $180 million to $370 million and added a cleaning and staging facility.
The acquisition will increase cash generating ability as well as funds flow.Debt has gone up and the payout ratio will rise temporarily but it is predicted that net income will stabilize in the third quarter and start to rise above current levels in the fourth quarter of 2014.An increase in net income before the fourth quarter is purely a bonus.But Twin Butte is leveraged to the price of oil;if it goes back to $100 a barrel Twin Butte may show increases in net income by the second or even the first quarter.
It's capital spending was about $31 million with $22 million coming from asset dispositions.It drilled 31 wells with a 90% success rate.So now it has about 800 producing medium and heavy gravity wells.It will drill about 70 to 80 horizontal wells and 40 to 60 vertical wells in2014. This will likely increase production significantly for 2015 with their usual success rate.This means that there will be about 35 wells at Wildmere up from the present 4 or 5.
In addition to it's organic growth it made a significant acquisition;it acquired Black Shire Oil.Black Shire has a lot of wells in the Provost area of Alberta.This will become a second area of concentration of wells.Black Shire has about 7000 barrels of present production;added to Twin Butte production this will produce about 23,300 barrels for the fourth quarter of 2013 and 24,500 by 2014.This acquisition has
The acquisition will increase cash generating ability as well as funds flow.Debt has gone up and the payout ratio will rise temporarily but it is predicted that net income will stabilize in the third quarter and start to rise above current levels in the fourth quarter of 2014.An increase in net income before the fourth quarter is purely a bonus.But Twin Butte is leveraged to the price of oil;if it goes back to $100 a barrel Twin Butte may show increases in net income by the second or even the first quarter.
Comments
Post a Comment