Calgary, March 20, 2019 (PIPE – TSX-V) Pipestone Energy Corp. (“Pipestone Energy” or the “Company”) is pleased to provide an operational update as well as updated reserves and resources information effective as of January 4, 2019, which was the closing date of the amalgamation (the “Amalgamation”) of Pipestone Oil Corp. (“Pipestone Oil”) and Blackbird Energy Inc. (“Blackbird”). A conference call has been scheduled for Wednesday, March 20th at 9:00 a.m. Mountain Standard Time (11:00 a.m. Eastern Standard Time) for interested investors, analysts, brokers and media representatives.
“Pipestone Energy continues to successfully execute on its development program in 2019, which includes the construction of an integrated in-field gathering and third-party compression system, capable of supporting approximately 33,000 boe/d of sales production. We recently completed drilling the final well of a 7 well program on our 3-1 pad and are preparing to complete these wells in late spring. We have been extremely pleased with the drilling performance on this pad over the past few months as we have set several new operational milestones, including a new performance pacesetter on our final well. Pipestone Energy is well positioned to meet our 2019 exit production guidance of 14,000 – 16,000 boe/d,” stated Paul Wanklyn, Pipestone Energy President and Chief Executive Officer. “The capital efficiencies we achieved during the most recent drilling and completions activities in Q4 2018 and Q1 2019 has resulted in an 11% decrease in our well costs from $9.7 million to $8.6 million. With our large contiguous land position in the condensate-rich Pipestone Montney, committed access to processing infrastructure, product egress, and a strong balance sheet, we expect to deliver strong shareholder value.”
Increased the net present value before tax, discounted at 10% (“NPV10%”) of Pipestone Energy’s Proved (“1P”) reserves from $554 million to $839 million, an increase of 51% since August 1, 2018
Increased the NPV10% of Pipestone Energy’s Proved + Probable (“2P”) reserves from $1,170 million to $1,394 million, an increase of 19% since August 1, 2018
Development program to achieve 2019 exit production of 14,000 – 16,000 boe/d is on-track and on-budget
Average final 24 hour test rate on all wells completed north of the Wapiti River of ~1,790 boe/d (45% condensate) based on raw gas and wellhead condensate production (excludes natural gas liquids) (1)
Infield operated gathering infrastructure project is 95% complete
(1) Based on the latest test results (16 tests) for each well as available (excludes initial test if the well has been subsequently retested)
2019 CAPITAL PROGRAM UPDATE
Due to weather-related delays in Q4 2018, Pipestone Energy spent ~$10 million less than expected causing a shift of the capital expenditure program into Q1 2019. As a result, Pipestone Energy plans to spend between $145 - $165 million on the 2019 capital program. The Company recently finished drilling its fourth and final well for Q1 and expects to drill 9 additional wells in H2 2019. Pipestone Energy is planning to complete 7 wells in 2019 and will have a balance of 12 wells drilled but uncompleted (“DUC”) at year end 2019. The Company may elect to accelerate the completion of 3 additional DUCs into Q4 2019 depending on prevailing market conditions.
Pipestone Energy 5 Quarter Capital Program Overview (Q4 2018 – Q4 2019)Read More