Endeavour International Q2 production exceeds guidance

Endeavour International Corporation reported physical production for Q2 2014 that exceeded the company's revised guidance range of 10,500 – 11,500 barrels of oil equivalent per day (boepd).

Physical production for Q2 averaged 12,900 boepd compared to 9500 boepd for the same quarter of 2013. Sales volumes for the second quarter of 2014 were 7400 boepd, compared to 14,500 boepd for the same quarter in the prior year.

Endeavour did not have a lifting of production at the Alba field during the quarter, so revenues were significantly lower than would have been if based on physical production.

The company reported a Q2 2014 net loss, as adjusted of US$ 38.7 million compared to a net loss, as adjusted of US$ 12.6 million for the same period in 2013.

Highlights

• Rochelle field fully operational with both wells producing during the quarter.
• Settled and received US$ 12.6 million in proceeds for the Rochelle E1Y well insurance claim.
• Executed a forward sale for US$ 22.5 million.
• Successfully finished the hydraulic fracture stimulation of a third Pennsylvania Marcellus well.

Commenting on the performance, Endeavour President and CEO, William L. Transier, said: "During the quarter we were able to establish production from both wells at the Rochelle field. We experienced periods during the quarter where production rates exceeded 100 million ft³/d of gas and 4000 boepd. This confirms our confidence in the Rochelle field's potential.

"However, we continue to be challenged by unexpected downtime and lower production efficiency rates which are directly attributable to the production facilities we do not control. We are working with the operators at Alba and Rochelle to improve ongoing performance."

North Sea

At Rochelle, the West Rochelle (W1) development well was returned to production in mid-May. The E2 and W1 wells produced together during the quarter and achieved production rates greater than 100 million ft³/d equivalent for 32 days during the second quarter.

The Scott Platform began its planned shutdown period on 27 July 2014 and so the Rochelle Field is expected to be shut-in for three weeks until the Scott Platform goes back into service. The shutdown at the Scott Platform is being executed to coincide with the previously announced maintenance work occurring on the Forties Pipeline System. Endeavour has a 44% working interest in Rochelle.

At Alba, the A69 well is being completed and is expected to start production this month. Progress was made in the southern part of the field with partial water injection being reinstated. Installation of the replacement pipeline is planned early in the first quarter of 2015, with start-up expected in the second quarter. The partial reinstatement of water injection in the southern part of the field has sustained production throughout the second quarter. Well A69 is expected to increase overall production rates in the third quarter. Endeavour has a 25.68% working interest in Alba.

Bacchus continues to perform at rates above the company's expectations. The B3Y well has not, as expected, been turned into a water injector because of certain technical issues. Future options for the B3Y well continue to be evaluated. Endeavour has a 30% working interest in the field.

North America

In the Pennsylvania Marcellus, Endeavour successfully completed hydraulic fracture stimulation of the C-13 horizontal well, the third completion this year in the Daniel Field. The company's operated activity included more than double the number of frac stages on the longest laterals to date relative to previous wells. Following these successful well completions, operatorship of the Marcellus assets was transferred to Samson Exploration.

Later this year, the wells will be tied into a new third-party pipeline being commissioned by EQT Corporation that allows firm capacity of up to 10 million ft³/d, with potential for future expansion.

In the Piceance Basin Rim play in Northwest Colorado, Endeavour has two projects targeting liquids-rich Niobrara and Frontier objectives. At present, a rig has commenced drilling an initial horizontal Niobrara test at the company's Wiley prospect. Endeavour has leasehold and drilling options on 40,000 gross acres and 27,000 net acres.

Outlook

In the UK North Sea, Q3 is typically the time to perform maintenance and other tasks on infrastructure. During 2014, Endeavour anticipates that all of its producing fields will be modestly impacted. These shutdowns will be less invasive than those experienced in 2013, but will still have an impact on third quarter physical production.

At present, there is a 16-day shutdown on the Forties Pipeline System planned in August that will affect oil production from Bacchus and Rochelle. Currently underway is a three-week Rochelle shutdown, which coincides with the work being done at Forties.

At Alba during August, a short shutdown of three days is planned to test the emergency systems. Average daily physical production volumes are expected to be in the range of 9500 – 10,500 boepd for Q3 2014.

Image courtesy of Endeavour International Corporation.

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/05082014/endeavour-reports-q2-2014-production-figures-1205/