Current CJ:CA Stock Info

It was in July 2017 that Apache Corp. (ticker: APA) announced it was selling its conventional light oil production to Cardinal Energy Ltd. (ticker: CJ). At that time, Cardinal estimated that the properties would add about 5,000 BOEPD of production, with oil and NGLs making up all production.

In Q4 2017, Cardinal’s average daily production was 20,948 BOEPD, and for 2017 overall, the company produced on average 18,707 BOEPD. This was a year-over-year increase of 28% – Cardinal’s 2016 production values were 11,042 BOEPD.

Cardinal reported a net loss of $54.3 million, or $(0.49) per share for Q4 2017. For the full year 2017, the company had a net loss of $57.6 million, or $(0.61) per share.

Cardinal Energy, Now with Apache’s Conventional Light Oil Assets, Produces 21 MBOEPD in Q4 2017

Cardinal Asset Base, Jan. 2018

Apache sold it, Cardinal bought it

Cardinal bought Apache’s Midale and House Mountain conventional light oil assets back in July 2017 for $224 million.

The company said its focus for 2017 was to integrate and increase understanding of the Midale and House Mountain assets.

The Alberta assets are about 30 miles from existing Cardinal properties, and were producing 2,150 BOEPD from the Beaverhill Lake formation. Anticipated future development involves fracturing existing wells and developing the 50 identified drilling locations.

The Saskatchewan assets are under CO2 and water floods to enhance recovery, and had a very low 6% decline rate. Cardinal plans to expand EOR operations and conduct infill drilling on the 250 potential well locations identified.

House Mountain

In House Mountain, Cardinal saw a positive waterflood response to initiatives undertaken in 2017. Management of this asset resulted in 3 million barrels of incremental high netback, light oil reserves being added to the year-end report.

Midale

In the first six months of operating the Midale property, Cardinal generated $15 million of operating income and incurred $1.5 million of capital expenditures, of which $1.4 million were CO2 purchases. The production on the property was held flat at approximately 3,000 BOPD.

Cardinal funded this acquisition with its credit facility and a financing agreement. The agreement involved selling C$170 million in shares to a syndicate of banks, which were then sold to the public. The company said its credit facility would cover the remaining $160 million at the time of the transaction.

Grande Prairie operations

Cardinal has spent a total of $46 million in the Grande Prairie area in 2017. According to the company, this amount included both the original acquisition price and a seven-well drilling program. The TPP PV-10 reserve value was $100 million at year end 2017. Cardinal drilled a total of seven Dunvegan light oil wells on its Grande Prairie lands acquired in 2017.

Cardinal said that the Grande Prairie, Midale and House Mountain acquisitions have transformed the company from a medium quality (WCS) weighted asset base to a light oil weighted asset base.

Overall drilling

Cardinal Energy, Now with Apache’s Conventional Light Oil Assets, Produces 21 MBOEPD in Q4 2017

Cardinal 2017-16 Drilling, Mar. 2018

Reserves, 2018

The company reported total proved and developed producing (PDP) reserves of 66.4 MMBOE, total proved (1P) reserves of 70.5 MMBOE and total proved plus probable (2P) reserves of 94.7 MMBOE.

The company expects to produce on average in 2018, 21-21.5 MBOEPD, with light oil and NGLs making up 46%, medium quality oil 41% and natural gas 13%. Cardinal has projected a 2018 capital program of $55.5 million. Approximately $38 million will be for drilling and optimization and $17.5 million for facilities.


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