Devon’s Canadian Oil Production Jumped Nine Per Cent In Q3 To 80,000 Bbls Per Day NOV. 5, 2014 – VIEW ISSUE Net oil production for Devon Energy Corporation in Canada averaged 80,000 bbls per day, a nine per cent increase compared to the third quarter of 2013. This exceeded the midpoint of the company’s guidance range by 7,500 bbls per day. The majority of this outperformance is due to better than expected performance at Jackfish 2 and 3. The deferral of a facility turnaround at Jackfish 1 resulted in incremental net production of about 3,000 bbls per day during the quarter. Overall, gross production from the Jackfish complex averaged a record 64,000 bbls per day, a 20 per cent increase compared to the third quarter of 2013. After accounting for royalties, net production averaged 53,000 bbls per day. Jackfish 1 exceeds nameplate capacity Gross production exceeded nameplate capacity, averaging 36,000 bbls per day in the third quarter or 27,000 bbls per day, net of royalties. The facility turnaround was deferred until mid‐2015 due to advancements with ongoing plant maintenance techniques and processes. The company is working toward lengthening the time between future facility turnarounds for all its Jackfish projects beyond the historic maintenance cycle of once every two years. Jackfish 2 production advances Gross production averaged 26,000 bbls per day in the third quarter. After royalties, net production was 24,000 bbls per day, an eight per cent increase compared to the second quarter of 2014. This record production was driven by the ramp-up of one new well pad and the optimization of existing pads. Jackfish 3 first oil Devon began steam injection on July 13. Net production averaged 1,600 bbls per day during the third quarter. The company expects Jackfish 3 to exit 2014 producing around 10,000 bbls per day. Peak facility capacity of 35,000 bbls per day is anticipated around year‐end 2015. Jackfish complex to generate significant free cash flow The completion of Jackfish 3 begins an era of free cash flow from Devon’s Jackfish complex. In aggregate, the three Jackfish projects have the potential to generate around $1 billion annually of free cash flow, after maintenance capital. FEED work continues at Pike In 2015, net capital spending at Pike will be approximately $250 million as the company drills additional stratigraphic wells to further understand reservoir characteristics and perform final front end engineering work. Upon completion of the engineering work, expected in the fourth quarter of 2015, the company will finalize a work plan and take the project to its board for consideration. Lloydminster delivers solid results Net production from Devon’s other Canadian assets, primarily Lloydminster, averaged 31,000 boe per day, of which 86 per cent was oil. The company expects these assets to generate approximately $200 million of free cash flow in 2014, after capital expenditures. Earnings Overall, the company reported net earnings of US$1 billion or $2.48 per common share ($2.47 per diluted share) for the quarter ended Sept. 30, 2014. This compares with third-quarter 2013 net earnings of $429 million or $1.06 per common share ($1.05 per diluted share). ARTICLE SECTION: PRODUCER NEWS
Posted on: Thu, 25 Dec 2014 16:20:26 +0000
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