PetroQuest Energy (ticker: PQ) is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, Wyoming, Texas, South Louisiana and the shallow waters of the Gulf of Mexico.
Recent Q3’13 Success Fueled by Acquisition
PetroQuest Energy announced results for Q3’13 on November 5, 2013. The punch line from the announcement was how the company’s $188 million purchase of shallow Gulf of Mexico assets contributed to increases comparable to Q2’13 of 25% in total production, a 35% rise in discretionary cash flow and an increase of 46% in total oil and gas revenue. Oil production climbed 90%, with a revenue increase of 97%. Net income for the first nine months of 2013 is $6,652,000, or $0.10 per share, compared to a net loss for the same period in 2012 of $111,767,000, or $1.79 per share.
Gulf Coast Production Expected to Increase in the Near-Term
PQ’s Tokay prospect (80% WI) in Ship Shoal 72 reached total depth and logged 209 net feet of pay. PQ expects it to produce a maximum 24 hour gross production rate of 400 BOPD to 600 BOPD. Additionally, PQ initiated production from two wells at Ship Shoal 238 near the end of September after delays pushed back its anticipated start date of August 2013. The 24 hour gross rate of production totaled 1,400 BOEPD, with 90% oil. Upon completion of upgrading the equipment, PQ expects the total to reach 3,000 BOEPD. OAG360 notes PQ still reached the low-end of production guidance for Q3’13 despite these delays. In the West Delta 89, one well is complete but the other is delayed due to a down-hole obstruction. Production is expected to commence in Q4’13.
Woodford Operating Starting to Accelerate
PQ recently added 8,000 net acres in the play bringing the company’s total net acreage in the play to 30,000 (including the joint venture). PQ’s five well pad is expected to be completed by January 2014. OAG360 reminds readers PQ expects to drill 50 gross wells in the Woodford in 2014 – an increase from 16 gross wells this year.
Upcoming Catalysts to Add to the Story
Overall, PQ’s liquids production growth is expected to translate into a substantially higher cash flow, which in turn will be used to accelerate the development of its resource assets and significantly increase its long-term production and reserve base.
With its 2014 production outlook intact, the company has a few additional catalysts that will continue to drive growth in 2014. PQ is preparing an 8 to 10 well horizontal program in the Cotton Valley in 2014. Additionally, PQ initiated a 3D seismic survey in the Mississippian Lime and results are expected to be received by January 2014.
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