SASKATCHEWAN WELL ACTIVITY JAN/12
JAN/13
Wells licensed
JAN/12
JAN/13
Wells spudded
JAN/12
JAN/13
Rigs released
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Source: Daily Oil Bulletin
S.K. Saskatchewan
Renegade spending $80 million in 2013
Photo: Pipeline News
Renegade Petroleum Ltd. said its board of directors has approved a 2013 capital development budget of $79.6 million. The company’s 2012 budget was first set at $76 million, but eventually was increased to $130 million. Of the $79.6-million 2013 budget, $51.4 million is earmarked for southeastern Saskatchewan and $28.2 for west-central Saskatchewan. The capital program and the expected dividend payment of $46.7 million are forecasted to be funded through the company’s funds flow from operations with an all-in annual payout ratio estimated at 98.4 per cent. Renegade said its successful 2012 drilling program and recent acquisition in southeastern Saskatchewan enabled it to achieve record exit production of about 8,000 barrels of oil equivalent per day. The company believes its assets are ideally suited for an “income plus growth” model for several reasons: its output is 95
per cent light oil with operating netbacks of $50 a barrel; it has a 25 per cent corporate decline rate; 65 per cent of its 2013 production is hedged at C$93.67 for West Texas Intermediate (WTI); 3,000 barrels per day of 2014 output is hedged at C$91.28 WTI; it has a 36 per cent dividend payout ratio (a 98.4 per cent all-in payout ratio); and it has more than 900 light-oil development drilling locations. In the fourth quarter, Renegade began its transition to a dividend-paying corporation, focusing on areas that provide predictable results and strong capital efficiencies. As such, its drilling program concentrated on its core assets in southeastern Saskatchewan and its Viking assets in west-central Saskatchewan. In southeastern Saskatchewan, Renegade drilled six (five net) wells in the fourth quarter, bringing the year-to-date total to 32 (23.8 net) wells. Renegade continued to focus on both the Frobisher and Souris Valley trends, with further drilling plans continuing into 2013.
Drilling in southeastern Saskatchewan. Renegade is spending $51.4 million in the area in 2013.
During the fourth quarter, Renegade drilled and completed two (two net) wells in the Wordsworth and Queensdale areas, targeting the Frobisher formation. In the Wordsworth area, one (one net) horizontal well was drilled, yielding a 30-day initial oil production average of 180 barrels per day. This well offsets the strong results noted in the third quarter. Renegade drilled one (one net) horizontal well in the Queensdale east area that showed promising results during drilling and will be evaluated further in the first quarter of 2013.
8,000
barrels per day
Renegade’s 2012 exit production Renegade drilled one (0.5 net) well in the Crystal Hills area of southeastern Saskatchewan in the fourth quarter, which yielded a 30-day initial unoptimized oil production rate of 200 barrels per day. Renegade has additional plans to continue drilling in this area throughout 2013. In the third quarter, Renegade drilled three (2.5 net) wells in the Redvers/Mair area of southeastern Saskatchewan. The most recent two (1.5 net) wells had an average 30-day initial oil production rate of over 85 barrels per day. In west-central Saskatchewan, Renegade is a strong producer in the Viking play. The company boasts all-in costs of $950,000 per well. Renegade drilled six (six net) wells in west-central Saskatchewan in the fourth quarter. The company has now drilled and brought onto production 14 (14 net) wells based on 40-acre spacing. The production results continue to show a strong correlation to the offset 80-acre spacing well type curves. — DAILY OIL BULLETIN OIL & GAS INQUIRER • MARCH 2013
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