Perpetual Energy restsuctures
Perpetual Energy used 2013 to start to restructure itself.It's Capital spending helped to diversify away from natural gas towards natural gas liquids and heavy oil.Also it has now five new wells ,three on the Mannville heavy oil property and two on the Edson property.Lastly it made enhancements in the Edson area as it now has a gas processing facility(including a refrigeration plant and a sales pipeline.Deliveries to the Alliance pipeline started October1.
Mannville heavy oil
Three new wells have come onstream in 2013 and drilling will commence on another four.Heavy oil production was 3346 barrels per day a 28% increase from Q3 in 2012.Production will be higher for 2014.For example,there will be capital spending of$26 to $32 million in Q1of 2014.Some of this will go towards Mannville.
The Edson area
The first of five new wells was completed and tied-in.South of Edson one exploratory well was drilled in the Alberta deep basin .It is now being tied-in.The additions in infrastructure to gas processing facilities are being added here as well as an increase in equity in the Warwick storage area to 30%.
Funds flow
Funds flow for this quarter increased by almost $20 million or 75% from 2012 and almost 10% from last quarter.Capital spending for the year should be around $110 to $140 million.$100 million of this is expected to come from further asset dispositons.And funds flow will produce about $60 to $75 million.That leaves about $35 to $65 million for reduction of debt.This is part of their restructuring.
2014
Perpetual is expecting natural gas sales to rise about 7 to 10% and natural gas prices should rise.Heavy oil production should rise with the new wells tied-in and new drilling.Perpetual must put a longer gas pipeline and a bigger pipe and processing plant to raise their income into a positive cash flow position.Their storage plant will not be as important if the price of natural gas rises.
Mannville heavy oil
Three new wells have come onstream in 2013 and drilling will commence on another four.Heavy oil production was 3346 barrels per day a 28% increase from Q3 in 2012.Production will be higher for 2014.For example,there will be capital spending of$26 to $32 million in Q1of 2014.Some of this will go towards Mannville.
The Edson area
The first of five new wells was completed and tied-in.South of Edson one exploratory well was drilled in the Alberta deep basin .It is now being tied-in.The additions in infrastructure to gas processing facilities are being added here as well as an increase in equity in the Warwick storage area to 30%.
Funds flow
Funds flow for this quarter increased by almost $20 million or 75% from 2012 and almost 10% from last quarter.Capital spending for the year should be around $110 to $140 million.$100 million of this is expected to come from further asset dispositons.And funds flow will produce about $60 to $75 million.That leaves about $35 to $65 million for reduction of debt.This is part of their restructuring.
2014
Perpetual is expecting natural gas sales to rise about 7 to 10% and natural gas prices should rise.Heavy oil production should rise with the new wells tied-in and new drilling.Perpetual must put a longer gas pipeline and a bigger pipe and processing plant to raise their income into a positive cash flow position.Their storage plant will not be as important if the price of natural gas rises.
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