CALGARY, ALBERTA–(Marketwired – Oct. 8, 2015) – Delphi Energy Corp. (TSX:DEE) (“Delphi” or the “Company”) is pleased to provide the following operational update.
Delphi continues to improve upon its superior capital efficiencies at Bigstone through successful innovation of its slickwater frac design, resulting in both material cost savings and improved well productivity.
Delphi’s 100 percent working interest 14-30-60-22W5M Montney well (“14-30” or “the well”) was drilled in the third quarter of 2015 to a total depth of 5,656 metres with a horizontal lateral length of 2,729 metres. 14-30 is the first well completed with a redesigned slickwater frac program over 37 stages with initial clean-up test results higher than any previous Delphi Montney horizontal well completed with slickwater. The well was also drilled and completed for a company record capital of $7.3 million, which is a 28 percent reduction from average drilling and completion costs in 2014. Net of the ongoing GORR funding arrangement, the net cost to Delphi to drill and complete the 14-30 well was $5.0 million. The well flowed on clean-up over 2.9 days prior to running production tubing, recovering approximately 15 percent of the initial load frac water and is now shut-in to equip and pipeline connect the well for production. Prior to running production tubing, the well tested, over the final 24 hours, at an average rate of 11.7 million cubic feet per day (“mmcf/d”) of raw gas, 1,418 barrels per day (“bbls/d”) of wellhead condensate (121 bbls/mmcf of raw gas) and approximately 1,898 bbls/d of load frac water. Total production for the 14-30 well over the final 24 hours of the 2.9 day clean-up flow, including additional estimated gas plant NGL recoveries of 40 bbls/mmcf of sales gas, was approximately 3,562 barrels of oil equivalent per day (“boe/d”), (51 percent field and plant NGL). This test rate is 52 percent and 16 percent higher than the direct well offsets at 13-30-60-22W5M to the west and 15-30-60-22W5M to the east, respectively. Both of the 13-30 and 15-30 wells were completed with the original slickwater hybrid frac design over 30 stages. The 14-30 well is expected to commence production in the fourth quarter of 2015.
As a result of the realized costs savings, Delphi has expanded its drilling program. The Company has commenced drilling its fifth horizontal Montney well (0.83 net) of the 2015 capital program at 14-24-60-23W5M (“14-24”). Completion operations for 14-24 are expected to commence in early 2016 with plans to employ the newly optimized frac design that has shown positive initial results at 14-30.
Delphi continues to pursue operating efficiency gains and operating cost reductions in the field. The Company is nearing completion of facility construction for the previously announced water disposal well that was acquired in the greater Bigstone area for the handling of its produced water and completion flow-back water. After equipping of the water disposal well with the required injection facilities, Delphi expects disposal of its produced water to commence during the fourth quarter of 2015. Avoiding water disposal costs through third parties will result in further reductions to both operating costs on all of the Company’s Bigstone Montney production and future capital costs on Delphi’s completion operations for its Montney development wells.
The Company is also preparing to install a pipeline to access higher quality fuel gas to improve the efficiency of the Montney 7-11 compression facility, increasing the throughput capacity and decreasing required maintenance costs.
While maintaining a conservative approach to its capital spending plans in this commodity price environment to preserve financial flexibility, the Company is getting even more efficient as operating and capital costs continue to decrease. Capital spending on its large-scale Montney project at Bigstone where it holds 138.5 gross sections of land is expected to remain within the context of cash flow generated.
Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.
