Raging River Exploration announces operations update and increased capital and production guidance
Friday, October 05, 2012
- Continued exceptional well results and strong production volumes have resulted in the Board of Directors of Raging River approving a $15 million budget increase.
- Weather conditions improved during the quarter which allowed for an aggressive drilling program.
Raging River Exploration Inc. (TSX VENTURE:RRX) provide increased 2012 capital and production guidance and a third quarter operations update.
Continued exceptional well results and strong production volumes have resulted in the Board of Directors of Raging River approving a $15 million budget increase. This increases the Company's 2012 capital budget to $82 million from the previous $67 million.
REVISED CAPITAL BUDGET
| Drilling & Completions || $44 million |
| Land, Seismic and Facilities || 4 million |
| Acquisitions || 34 million |
| Total || $82 million |
The increased budget will see an additional 10-12 net horizontal wells added to the program for a total of 41-43 net wells. The revised capital budget also contemplates pre-drilling a number of 2013 locations assuming operating conditions remain favorable.
INCREASED 2012 GUIDANCE
Based upon field estimates, third quarter production exceeded expectations with average production of 2,100 boe/d (97% oil). Average daily production for the period from April through December 2012 is expected to be 2,150 boe/d (97% oil), a further 10% increase from prior guidance of 1,950 boe/d. This third increase in guidance in 2012 represents a 26% increase from initial guidance of 1,700 boe/d without increased capital expenditures.
The 10-12 incremental net wells are expected to have a material impact on exit production which is now expected to be 2,800-2,900 boepd (97% oil). This third increase in exit guidance represents a 30% increase from initial guidance of 2,200 boepd without increased capital expenditures.
Weather conditions improved during the quarter which allowed for an aggressive drilling program. The Company drilled a total of 37 gross (28.8 net) wells during the third quarter including 36 horizontal Viking oil wells at a 100% success rate and one vertical stratigraphic test well. 17 gross (16 net) wells were placed on production in the third quarter and 19 gross (11.8 net) wells were waiting to be brought on stream in October.
The optimized drilling and completion techniques previously disclosed, continue to provide consistent improved production results. Average 45 day production rates for the 17 new wells placed on stream during the third quarter have exceeded 50 bbls/d of oil. This is consistent with the results of the first 13 wells drilled with this technique earlier this year.
Drilling and completion costs ("D&C") have continued to trend lower. The average D&C cost in the third quarter was $800 thousand leading to total per well on-stream costs of $925 thousand.
Raging River's rapidly increasing production and cash flow will allow the Company's balance sheet to remain exceptionally strong. The Company forecasts that its net debt at year end 2012 will be approximately $35 million, 55% drawn on its $65 million credit facility, representing less than 0.7 times debt to trailing fourth quarter cash flow.
Raging River's experienced management team remains committed to balance sheet management, operational and execution excellence to continue to deliver per share value growth to our shareholders.sdg