Current AAV:CA Stock Info

We have chased profitability and low cost structure: Mah

Advantage Oil & Gas’s President and CEO Andy Mah spoke to Oil & Gas 360®’s Angie Austin at the EnerCom conference in Denver last week. Mah talked about drilling results in the Montney, the advantages of owning and operating a gas plant, and the plans for company growth beyond 2017.

Calgary-based Advantage Oil & Gas Limited (ticker: AAV) is an oil and gas development company focused on the Montney resource play in Northern Alberta. The company’s shares are traded on both the TSX and NYSE.

Advantage operates 169 wells and holds a 100% working interest in an associated gas plant in the Glacier field, which produces from the Montney formation. The plant was upgraded to its current 250 MMcf/d capacity in 2015, with plans to expand capacity to 350 MMcf/d under review. The latest plant expansion is planned to begin in early 2017.

Interview Questions

  • Andy, Advantage Oil & Gas is 100% focused on the Montney shale in Northern Alberta. Can you talk about your Montney asset base – describe the acreage positions at Glacier and other areas, talk about the formations you’re drilling, and the drilling results you are seeing?
  • Could you talk about the liquids-rich Middle Montney formation; how is the Middle Montney different from the formations you are producing now?
  • Could you talk about Advantage’s Glacier gas plant. What advantages does the company realize from owning/operating your own processing plant and what are the associated costs or cost savings for Advantage?
  • Andy, Advantage is showing tremendous success with drilling and completion cost reductions. You just reported a company record of only 59 cents cash cost per Mcfe. In fact, improved well results and lower costs have reduced your capital requirements by $300 million for your 2015-2017 planning period. How much lower can you go; what’s left to squeeze out of the cost equation?
  • What’s your projected timeline to hit your 350 million cubic feet production goal, and what are your production goals beyond 2017?
  • Could you take us through your new frac and completions designs, the reduced spacing between stages and the longer laterals – what are you learning from these wells? Is there a difference between how you approach completions in the Upper, Middle and Lower Montney?

Advantage Oil & Gas’s Breakout Notes from the 2016 EnerCom conference are available here.

You can listen to Advantage Oil & Gas’s 2016 EnerCom presentation/webcast here.

For the company’s second quarter results, click here.

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