Twin Butte finds new pools
On August 13 Twin Butte announced it's Q2 results.It showed production of 21,209 barrels per day which is an increase of 25% over Q2 2013.Now light and medium oil represents 36% of it's production from 4% in Q2 2013.Funds flow of $48 million equals $.14 per share which is an increase of 47% from Q2 2013.This is because of new operational cost reductions and higher netbacks on the light and medium oil.In addition, the payout ratio went from 89% for the year to 75% for the second quarter.Capital spending was $21.7 million in Q2 and will be $50 million in Q3.Twin Butte also sold off $4.7 million in non-core assets.
The drilling program
The drilling program will be larger in the next quarter.It will be focussed on horizontal drilling in Provost(newly acquired property) and in Wildmere,Alberta(heavy oil).In Provost TB will cocncentrate on the Dina and Cummings plays.TB has found that drilling on both the initial pool and secondary pools can be expanded.Production from their new wells is only 75 to 95 barrels per day;this may be because of smaller well bores.But Twin Butte has discovered the potential for several other oil bearing zones.Drilling in these "multiple oil bearing zones" is planned for the rest of 2014.This should increase medium wells by 50% and increase cash flow by 10%.TB says that they will meet exit production guidance of 22,500 barrels per day.This blog expects that they will meet this guidance in Q3.
New production areas
TB says that they will continue to do horizontal drilling in the Wildmere area .They expect 15 new wells here in 2014.They also expect 40 new wells overall(in Provost and Wildmere) in Q3 and 13 have already been started.These are mostly horizontal wells and have almost a 100% success rate.Potentially they can get 75 to 95 barrels per day from each and may be looking at an additional 3500 barrels to 4000 barrels per day.It appears that TB's guidance is a little low.
New Pools
The new information coming out of their second quarter results is that TB seems to have found unexploited pools of medium and light oil that the former owner Black Shire had not discovered.In addition, they may have found "multiple oil bearing zones"even in the initial Black Shire pool.All that TB says is that they have extended the life of their oil pool by more than three years.This is potentially significant news and this blog intends to await further clarification ;it is possible that the NAV per share has more than doubled.We will know by the next quarter.
The drilling program
The drilling program will be larger in the next quarter.It will be focussed on horizontal drilling in Provost(newly acquired property) and in Wildmere,Alberta(heavy oil).In Provost TB will cocncentrate on the Dina and Cummings plays.TB has found that drilling on both the initial pool and secondary pools can be expanded.Production from their new wells is only 75 to 95 barrels per day;this may be because of smaller well bores.But Twin Butte has discovered the potential for several other oil bearing zones.Drilling in these "multiple oil bearing zones" is planned for the rest of 2014.This should increase medium wells by 50% and increase cash flow by 10%.TB says that they will meet exit production guidance of 22,500 barrels per day.This blog expects that they will meet this guidance in Q3.
New production areas
TB says that they will continue to do horizontal drilling in the Wildmere area .They expect 15 new wells here in 2014.They also expect 40 new wells overall(in Provost and Wildmere) in Q3 and 13 have already been started.These are mostly horizontal wells and have almost a 100% success rate.Potentially they can get 75 to 95 barrels per day from each and may be looking at an additional 3500 barrels to 4000 barrels per day.It appears that TB's guidance is a little low.
New Pools
The new information coming out of their second quarter results is that TB seems to have found unexploited pools of medium and light oil that the former owner Black Shire had not discovered.In addition, they may have found "multiple oil bearing zones"even in the initial Black Shire pool.All that TB says is that they have extended the life of their oil pool by more than three years.This is potentially significant news and this blog intends to await further clarification ;it is possible that the NAV per share has more than doubled.We will know by the next quarter.
Comments
Post a Comment