Gear Energy Ltd has announced operational highlights for the 3Q15 and revised capital guidance for 2015.
2015 Operational update:
- Stable field production of approximately 5500 boe/d was realised during the third quarter of 2015. Estimated sales production for the quarter came in slightly lower at 5385 boe/d due to temporary production shut-ins and shipping deferrals implemented during the anomalously low heavy oil price experienced in September. Gear expects to accomplish the existing production guidance of 5700 to 5900 boe/d for calendar 2015. Gear's October realised oil price is currently estimated to increase by approximately $10/bbl over the low September value, due to an improvement in heavy oil differentials into the fourth quarter.
- Gear drilled six wells during the quarter bringing the year to date drill count to eight in total. The drills include three dual lateral and two single lateral horizontal wells in Morgan, one horizontal well in Paradise Hill, a dual lateral unlined horizontal well in the GP at Wildmere and a quad lateral unlined horizontal well in the Cummings at Wildmere. In total, Gear invested approximately $10.5 million in capital through the first three quarters of 2015 including: the eight drills, 20 recompletions, and approximately $2 million in land, seismic and infrastructure. The last 60 days of production resulting from these activities has averaged approximately 1100 boe/d, yielding a company record capital efficiency of under $10 000/boe/d.
- With the strong results to date and in light of continued price volatility, Gear will reduce the 2015 capital program from $25 million to $15 million with the drilling of four more horizontal wells through the fourth quarter, (two in Paradise Hill and two in Morgan). Production expectations for the year are being maintained despite a 40% reduction in capital plans.
- In order to maximise cash flow, Gear has reduced salaries by an average of 9% in both Calgary and the field, resulting in lower estimates for both general and administrative costs and operating costs during the fourth quarter and into 2016.
- Gear expects to release detailed third quarter results and full guidance for the remainder of 2015 and 2016 after market close on 10 November 2015.
Edited from press release by Angharad Lock