Crew Energy Inc. Announces Second Quarter 2015 Financial and Operating Results
CALGARY, ALBERTA–(Aug. 6, 2015) – Crew Energy Inc. (TSX:CR) of Calgary, Alberta (“Crew” or the “Company”) is pleased to announce our operating and financial results for the three and six month period ended June 30, 2015. Our Financial Statements and Notes, as well as Management’s Discussion and Analysis (“MD&A”) for the three and six month period ended June 30, 2015 are available on Crew’s website and filed on SEDAR.
- Production of 17,656 boe per day for the quarter exceeded Crew’s budgeted volumes and reflects outperformance of new West Septimus wells that were production tested during the quarter in our Northeast British Columbia (“NE BC”) Montney area, and partially offset the approximately 2,500 boe per day that was off-line for 25 days in June due to a planned third party facility turnaround;
- Funds from operations totaled $24.8 million or $0.18 per share, an increase of 20% and 13%, respectively, over the previous quarter as a result of higher revenues and lower costs which drove a 27% increase in funds from operations netback;
- Cash costs per boe in the quarter were 33% lower than the same period in 2014, highlighted by a 74% decrease in royalties and an 18% reduction in operating costs. Crew’s second quarter operating costs were $8.81 per boe, 5% lower than the first quarter 2015;
- In July, Crew completed an innovative petroleum and natural gas rights exchange with the Province of BC, adding 53 net sections of new Montney land contiguous to our Groundbirch property (the “New Acreage”), in exchange for surrendering 66 net sections of undeveloped land that had been subject to restricted development since 2004. Pro-forma this transaction, Crew’s NE BC Montney Economic Contingent Resource estimate increased by approximately 12% from 7.4 Tcfe to 8.3 Tcfe given the proximity of the new lands to existing proven development;
- Drilling results at West Septimus continue to improve. In aggregate, production from all six wells on the last completed pad flowed at a total raw gas rate of 45.5 mmcf per day (per well average of 7.6 mmcf per day) with 2,932 bbls per day of wellhead condensate (64 bbls per mmcf). The wells maintained this rate at an average flowing casing pressure in excess of 1,600 psi after recovering over 0.5 bcf of raw gas and over 28,700 bbls of raw wellhead condensate during an 11.5 day flow period. Based on the individual well production test data, the aggregate flow rate from all 15 wells that have been drilled and completed at West Septimus is 76 mmcf per day of raw gas and 4,920 bbls per day of raw wellhead condensate (65 bbls per mmcf) after an average 10 day flow period;
- At West Septimus and Septimus, six (5.7 net) natural gas wells were drilled and eight (8.0 net) natural gas wells were completed. Within our inventory of 31 NE BC Montney wells, 22 are currently in varying stages of completion and tie-in which will contribute to continued production growth through 2015 as new volumes are processed through the West Septimus facility and the existing Septimus facility is maintained at or near capacity;
- With improved efficiencies and industry cost adjustments, drilling costs have continued to decline at Septimus and West Septimus. Per well costs are now averaging between $4.0 and $4.5 million, driven by a 22% reduction in drill times compared to 2014; and
- Net debt at the end of the second quarter improved over the first quarter to $227.3 million and was 10% lower than year end 2014 with current debt capacity of $410 million. In the second quarter, Crew recorded the pending recovery from our facility partner of approximately $34 million representing one half of the current construction costs of the West Septimus facility.
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