Current RZE:CA Stock Info

Calgary’s Razor Energy Corp. (stock ticker: RZE) has approved a capital budget of $13.5 million for fiscal 2019 that allows it to maintain production levels while continuing to pay a dividend.

Reactivations, recompletions and optimizations $4.6 million
Facilities and pipelines $5.2 million
Other (oilfield IT and other) $1.5 million
End of life expenditures $2.2 million

Reactivations, recompletions and optimizations include activities in both the Swan Hills and Kaybob areas and production management activities of existing waterfloods, the company said in a statement.

Razor said it will develop a blending facility in Kaybob and a condensate stabilization facility in Swan Hills.

In 2019, Razor plans to complete its oilfield information system upgrade program, which has already provided immediate enhancements impacting operational awareness, preventative maintenance, personnel safety, and environmental protection through actionable and predictive analytics.

2019 guidance

Recent volatility in both West Texas Intermediate (“WTI”) and Canadian crude oil differentials has resulted in a lower capital spending budget and production profile for 2019. The capital budget will be reviewed continuously by management and the Board and adjusted in response to changes in light oil price assumptions, project economics, and other market opportunities. Razor remains steadfast in its conviction to maintain its financial advantage and build a top-tier junior oil and gas company.

Razor’s 2019 financial and operating guidance and assumptions are as follows:

Average daily production January 2019 4,300 boe/d
Average daily production 2019 4,900 boe/d
Capital expenditures $13.5 million
Net debt(1), December 31, 2019 (“Exit Net Debt”) $51.1 million
Assumptions:
WTI (US$/bbl) $55.00
Exchange rate (US$/C$) 0.75
Light sweet oil differential to WTI (C$/bbl) ($11.45)
AECO gas (C$/GJ) $1.90

Razor said it will pursue consolidation of land and production within its existing project areas, in addition to complementary shallow horizons within its Alberta core region.

Razor started operations in 2017 with acquisitions of producing assets in the Swan Hills area and assets in the Kaybob area.  The assets are predominantly light oil assets.

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