-- The above noted Asset Acquisition and Financings create a series of transformational transactions which are expected to transition the Company into the highest domestic light oil weighted income plus growth dividend paying corporation in the Canadian public markets.
- -- On November 2, 2012, Renegade closed an asset purchase agreement with a private producer to acquire certain light oil and gas assets within its existing southeast Saskatchewan core area for total consideration of $1.375 million made up of $1.2 million of cash and 69,228 common shares of Renegade with a deemed value of $0.175 million.
During the third quarter of 2012, Renegade successfully executed its capital expenditure program with a 100 percent success rate. A total of 24 gross (20.2 net) wells were drilled of which 16 gross (12.2 net) were completed and brought on production in the quarter. The remaining 8 gross (8.0 net) wells have been brought on production in the fourth quarter.
Renegade's drilling and completions activity for the three and nine months ended September 30, 2012 is summarized by region below:
Three months ended Nine months ended September 30, 2012 September 30, 2012Region Gross Net Gross NetSoutheast Saskatchewan 14 10.2 26 19.3West Central Saskatchewan 10 10.0 39 38.5Total 24 20.2 65 57.8
Renegade's capital expenditure program for the three and nine months ended September 30, 2012 is summarized below:
($000) Three months ended Nine months endedCapital Expenditures September 30, 2012 September 30, 2012Drilling, Completion and Production Equipment 22,056 66,434Facilities and Equipment 3,671 11,804Land and Seismic 3,549 12,805Property Acquisitions/Dispositions 1,129 17,788Capitalized General and Administrative Expenses 230 959Other 59 178Total 30,694 109,968
Renegade drilled 14 gross (10.2 net) wells in the third quarter of 2012, bringing the year to date total to 26 gross (19.3 net). Renegade continues to maintain its strong focus on both the Frobisher and Souris Valley trends with increased well performance, facility capacity and increased acreage providing long term growth potential. A total of 12 gross (9.5 net) wells were drilled along these key trends.
Wordsworth & Queensdale
During the third quarter of 2012, Renegade drilled and completed 4 gross (2.5 net) wells in the Wordsworth and Queensdale areas.
Three gross (1.5 net) horizontal Frobisher wells were drilled in Wordsworth area, with a dual leg horizontal yielding a 30 day initial production average of over 180 bbls/day and Renegade's first three leg horizontal well having a 30 day initial production average of 290 bbls/day.
Renegade drilled 1 gross (1.0 net) vertical in its existing Queensdale area. The vertical well provided key reservoir data within its large contiguous land position. Renegade is currently in the process of licensing 3 horizontal wells offsetting the vertical and anticipates drilling to commence on the first of these wells in the fourth quarter.
Renegade drilled 3 gross (2.2 net) wells in the Crystal Hills area of southeast Saskatchewan in the third quarter of 2012. An additional 1 gross (0.3 net) well drilled in the second quarter was brought on production in the third quarter. Renegade's drilling program in the Crystal Hills area has yielded 30 day initial production rates on average of 92 bbls/day which is above Renegade's budgeted type curve of 54 bbls/day. Renegade's latest well drilled in the Crystal Hills area early in October came on production October 28, 2012 and is currently producing approximately 240 bbls/day (120 bbls/day net).
During the third quarter, Renegade drilled 5 gross (5.0 net) wells and additionally completed 1 gross (1.0 net) well that was drilled in the second quarter in the Redvers area of southeast Saskatchewan.
As a result of the financing completed in March 2012, Renegade has accelerated the infrastructure development in the Redvers area to accommodate the development of the Souris Valley trend. The Redvers facility has recently been commissioned and is anticipated to be fully operational within the next several weeks which will allow Renegade to begin optimization of Renegade's initial horizontals in the play.
During the quarter, Renegade used the time in which the facility was being constructed to evaluate the horizontals drilled using advanced means drilling and completion techniques and various production methods to increase well performance once capacity was available. Drilling activity in the quarter consisted of 4 gross (4.0 net) horizontals and 1 gross (1.0 net) vertical well.
West Central Saskatchewan
Renegade continues to experience exceptional well performance in the Viking play of west central Saskatchewan. Renegade's Viking results continue to be industry leading on long term production and cumulative recoveries which exceeds our independent reserve auditor type curves. Based on public data, Renegade has become a leading Viking producer in west central Saskatchewan over the last 18 months. This accomplishment is attributed to Renegade's continued technology improvement and disciplined initial production management. Renegade continues to drive down costs with current drilling and completion costs per well of approximately $850 thousand and total on stream costs of approximately $950 thousand. Drilling improvements have been made with the average time from spud to total depth down to 1.5 days from the previous 2.3 days.
Renegade drilled 10 gross (10.0 net) wells in the third quarter of 2012, bringing the 2012 total to 39 gross (38.5 net) wells. Of the 10 wells drilled, 6 gross (6.0 net) were spud late in the third quarter and completed and brought onto production early in the fourth quarter.
Renegade has now drilled and brought onto production 12 gross (12.0 net) wells based on 40 acre spacing. The production results continue to show a strong correlation to the offset 80 acre spacing well type curves.
Alberta Slave Point
Renegade currently has 5 locations licensed and has 12 locations in various stages of licensing at Senex. Due to the transformational shift in Renegade's strategy, Renegade does not anticipate allocating capital to the Slave Point play for the remainder of 2012. However, Renegade remains excited about the upside on the play and will consider either undertaking a modest capital program in 2013 or identifying potential joint venture partners for these high growth properties. Renegade's Board of Directors will make a formal decision on the Slave Point play upon the closing of the Asset Acquisition and Arrangement.
Renegade is on track to meet its exit production for 2012 of 8,000 boe/d pro forma the Asset Acquisition. Current pro forma production is approximately 7,800 boe/d.
Renegade's drilling program for the fourth quarter of 2012 includes 1 gross (1.0 net) wells in Wordsworth; 1 gross (0.5 net) in Crystall Hills; 1 gross (1.0 net) wells in Queensdale; 4 gross (3.0 net) wells in Redvers; and 3 gross (3.0 net) wells in the Viking.
Renegade's 2013 budget and guidance will be formally approved by its Board of Directors upon closing of the Asset Acquisition and Financings which is scheduled for mid-December.
In addition, Renegade is working on a transition to the TSX, which management anticipates completing in the first quarter of 2013.
We seek Safe Harbor.