CALGARY, ALBERTA, Nov 25, 2014 (Marketwired via COMTEX) —
PRD Energy Inc. (“PRD” or the “Company”) (PRD)
announces filing of its financial statements and operating results as
at and for the nine months ended September 30, 2014, and provides an
operational update on activities to date as well as an outlook for
the remainder of 2014. The Company’s interim condensed consolidated
financial statements and management’s discussion and analysis for the
reporting period will be available on SEDAR at www.sedar.com and
posted on the Company’s website at www.prdenergy.de. All references
to dollars or “$” in this news release are references to Canadian
dollars.
As a result of the recent decline in commodity prices, the Company
has conducted an internal evaluation of its three primary near term
projects: Boerger, Volkensen and Sittensen. All three projects remain
economically viable in the current pricing environment based on our
capital and reservoir assumptions. However, the Company is revising
its guidance on expected timing of these activities as a result of
regulatory delays and corporate planning initiatives to conserve cash
and maximize asset values.
Boerger Field
The Company is in discussions with its joint venture partner to
become the designated operator of the Boerger pool (through either
acquisition of the partner’s interest or by mutual agreement) in
order to accelerate development timeframes for the Boerger pool. The
Company plans to drill two to three deviated wells from the Boerger
7A well site in the second quarter of 2015, as the next stage of
development for the Boerger pool, conditional on the Company becoming
the designated operator during 2014 or early 2015. The Company
believes deviated wells are the optimal well design for drilling into
the underlying reservoir structure and should reduce operational risk
and capital exposures when compared to horizontal wells, as
originally planned. The Company’s current cost estimate for its 50%
working interest share is $2,250,000 for each deviated well,
including drilling, completion and equipping the wells.
During the three months ended September 30, 2014, the operator
produced the Boerger 7A well intermittently in order to carry out
pressure transient well testing and produced a total of 3,091 barrels
during 34 days of operation. Since being placed on production on
February 24, 2014 until September 30, 2014, the Boerger 7A well has
completed 136 operating days and has produced a total of 19,023
barrels of oil, or an average of 140 bbls/d, when operational. PRD is
encouraged by the initial results of this well, but believes that the
well is not producing to its full capability as a result of ongoing
reservoir testing and other operational issues, as well as failure to
produce from the full horizontal length of the well. The Company is
evaluating various workover and stimulation possibilities to increase
the performance of Boerger 7A well, in the event the Company obtains
operatorship.
Regulatory Affairs/Volkensen/Sittensen
The Company is seeking regulatory approval for its Volkensen
development plans and has recently received regulatory approval for
the Sittensen 3D shoot. During November, 2014, the Company met with
its principal regulator to discuss concerns around the predictability
of timing for permitting in relation to its current and future
projects. The regulator has agreed to work with the Company to
provide clarity and predictability to permitting timeframes. The
Company believes that enacting a more expeditious and streamlined
regulatory process would enhance its prospects for 2015 and beyond.
The Volkensen development permit was submitted in August, 2014. As a
result of additional data and information requests from the regulator
there have been a number of delays in the permitting process. The
Company does not believe that these delays are indicative of the
likelihood to receive permits, as they are procedural in nature and
are not in relation to public feedback or concerns about the project.
The Company has revised its expectations as to timing for field
activities and estimates site construction and drilling to start in
early second quarter of 2015. The Company has been granted an
extension until April 30, 2015 to commence site activities at
Volkensen with a further extension expected to be granted to
accommodate the Company’s proposed drilling program. The Company is
now planning on drilling a vertical/deviated well off the proposed
well-site pad to evaluate the downhole drilling conditions and
reservoir parameters in the Volkensen pool prior to horizontal
development. The Company is planning on cutting core, taking pressure
measurements and evaluating the reservoirs with modern geophysical
logs. These results, combined with the results of the Sittensen 3D
seismic program (which covers a portion of the Volkensen licences)
will further reduce the operational and production risks for future
pool developments in both the Volkensen and Sittensen licences.
The Sittensen 3D seismic shoot permit was issued by the regulator on
November 19, 2014, and is subject to certain customary conditions. We
are very pleased by the shortened length of time for the issuance of
this permit, being less than six months. The Company anticipates
starting the shoot in the first quarter, 2015 conditional on being
granted land access by certain land owners. If seasonal surface
access issues prevent the shoot from being commenced in the first
quarter of 2015, the next earliest opportunity to conduct the seismic
shoot will be in the second half, 2015. The Company has reduced the
seismic area to 70 square kilometers from 90 square kilometers to
take into consideration community concerns. The reduction in size
will reduce the total cost without compromising the development and
exploration opportunity being targeted by the shoot. As a result, the
shoot is expected to cost approximately $4,500,000 compared to the
previously disclosed $5,000,000 expected procurement cost.
Joint Venture Partner
The Company is in the process of seeking a joint venture partner for
the Volkensen and Sittensen licences. The Company has executed
several confidentiality agreements and held discussions, however, it
has not entered into any definitive arrangements at this time.
Other Licences
PRD is continuing to augment its understanding of its existing land
base of 2,413,300 acres with improved access to data of Germany’s
major oil gas companies. Management has completed a technical
review of its existing licences and prospects resulting in the
high-grading of certain exploration and production licences and
expects to materially reduce the size of certain licences during 2015
as a result of these assessments. The Company has also applied for
certain new licences which have been identified as prospective during
its internal review process. These licenses are expected to be the
focus of future development activity in late 2015 and throughout
2016.
About PRD Energy
PRD Energy Inc. is a Calgary based oil and gas company engaged in the
exploration, development and acquisition of, natural gas and crude
oil in Germany. PRD’s common shares are listed on the TSX Venture
Exchange with the symbol “PRD”.
Forward looking information
This news release contains forward-looking information relating to:
the viability of the Boerger, Volkensen and Sittensen projects;
enhancing potential recoveries from the Volkensen oil pool; expected
results from first stage of the Volkensen development program;
expected timing for commencement of the first stage of the Volkensen
development program, environmental impacts and reduction of costs
associated with operations; prospectivity of the Sittensen licence;
expected timing for commencement and completion of the
Volkensen/Sittensen seismic program and costs and funding in respect
of that program; delineation of exploration prospects, production
from the Boerger 7A well; the success of deviated wells to be drilled
at Boerger 7A; enhancing recoveries from the Boerger 7A well;
optimizing production capabilities of future wells, cost reduction
strategies; the ability to streamline regulatory processes to receive
permits; the ability of the Company to find a focus of corporate
activities in 2015 and 2016; expanding the Company’s business in
Germany and other statements that are forward-looking in nature. Such
forward-looking information is subject to important risks,
uncertainties and assumptions. The results or events predicated in
this forward-looking information may differ materially from actual
results or events. As a result, you are cautioned not to place undue
reliance on this forward-looking information.
Forward-looking information is based on certain factors and
assumptions regarding, among other things, the Company’s licenses,
and in particular: (i) statements relating to the development of the
Volkensen license are based on a variety of assumptions including,
the Company’s ability to begin construction and drilling in early
2015 ; (ii) statements relating to the Sittensen seismic shoot are
based on a variety of assumptions including the Company’s ability to
obtain permits on an efficient and economical timeline, PRD’s ability
to access the permitted land to conduct the seismic shoot and the
success of the results from the shoot; and (iii) statements relating
to the development of the Boerger field are based on a variety of
assumptions including, that the Company will become designated
operator of the field, the success of drilling the deviated wells and
the ability to increase production on the wells that have been
drilled. In addition to those assumptions listed above, the forward
looking information is based generally on certain factors and
assumptions, including the success of future exploration and
development activities, the impact of increasing competition; the
general stability of the economic and political environments in which
the Company operates or owns interests; the timely receipt of any
required regulatory approvals; the ability of the Company to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability to operate in a safe,
efficient and effective manner; the ability of the Company to obtain
financing to fund its operations on acceptable terms; field
production rates and decline rates; the ability to replace and expand
oil and natural gas reserves through acquisition, development of
exploration; the timing and costs of pipeline, storage and facility
construction and expansion and the ability of the Company to secure
adequate product transportation; future oil and natural gas prices;
currency, exchange and interest rates; the regulatory framework
regarding royalties, taxes and environmental matters in the
jurisdictions in which the Company operates; and the ability of the
Company to successfully market its oil and natural gas products, and
other similar matters. While the Company considers these assumptions
to be reasonable based on information currently available to it, they
may prove to be incorrect.
Forward looking-information is subject to certain factors, including
risks and uncertainties that could cause actual results to differ
materially from what is currently expected. These factors include
risks associated with the failure to obtain permits when expected,
the failure identify economic operations in the Boerger pool
following the proposed work-over, declining production from the
Boerger 7A well, the receipt of necessary permits on a reasonable
time frame, timing of field operations at Volkensen and Sittensen and
the ability to attract a joint venture or farm-in partner,
instability of the economic and political environments in which the
Company operates or owns interests, ability to manage water
production and disposal, oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations,
environmental risks, competition from other producers, inability to
retain drilling rigs and other services, incorrect assessment of the
value of acquisitions, the inability to settle the definitive terms
of the farmout arrangements, failure to realize the anticipated
benefits of acquisitions, delays resulting from or inability to
obtain required regulatory approvals, inability to obtain approvals
from the Company’s partners in operations, and ability to access
sufficient capital from internal and external sources, reliance on
key personnel, regulatory risks and delays, including risks relating
to the acquisition of necessary licenses and permits, environmental
risks and insurance risks.
You should not place undue importance on forward-looking information
and should not rely upon this information as of any other date. While
the Company may elect to, the Company is under no obligation and does
not undertake to update this information at any particular time,
except as required by law.
Initial Production Rates:
Any references in this press release to initial production rates are
useful in confirming the presence of hydrocarbons, however, such
rates are not determinative of the rates at which such wells will
continue production and decline thereafter. Additionally, such rates
may also include recovered “load oil” fluids used in well completion
stimulation. While encouraging, readers are cautioned not to place
reliance on such rates in calculating the aggregate production for
the Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Contacts: PRD Energy Inc. Michael Greenwood Chairman and Chief Executive Officer (403) 234-0501 (403) 234-0511 (FAX) PRD Energy Inc. Mark Hornett President and Chief Operating Officer (403) 234-0501 (403) 234-0511 (FAX) PRD Energy Inc. Jeff Scott Vice President, Finance and Chief Financial Officer (403) 234-0501 (403) 234-0511 (FAX)
SOURCE: PRD Energy Inc.
(C) 2014 Marketwire L.P. All rights reserved.