Advantage Announces Significant Oil Discovery at Progress, Alberta
This is a big deal for AAV. After a long absence, I initiated a new position and am now looking to add more on weakness. They have a superior management and the assets to survive and thrive.
CALGARY, Sept. 3, 2019 /CNW/ - Advantage Oil & Gas Ltd. ("Advantage" or the "Corporation") is pleased to announce a significant Montney light oil pool has been discovered and appraised at Progress, Alberta, on the Corporation's 47 net section block of 100% owned lands. This discovery elevates the Progress asset to be a primary element of the Corporation's near-term liquids development program.
Advantage has drilled four successful Montney wells to date at Progress, with the most recent located at 16-36-76-10W6 demonstrating average production test rates over 2,100 boe/d (62% liquids). The 16-36 well was drilled to a measured depth of 5,268 meters with a lateral length of 2,867 meters. Following fracture stimulation using approximately 2 tonnes of sand per meter, the well was flowed-back on clean-up, then subjected to a 72-hour production test at the end of the operation. The test results were as follows:
Production rates and pressure were increasing throughout as the well continued to clean up
Average oil rate during the 72-hour test was 1,038 bbls/d (43 degree API oil)
Average gas rate during the 72-hour test was 4.9 mmcf/d
Recoverable natural gas liquids entrained in the gas were approximately 290 bbls/d based on the average gas rate during the 72-hour test, using Glacier Gas Plant recoveries
Average flowing pressure during the 72-hour test was 5,168 kPa, increasing throughout
H2S content averaged approximately 0.1%
Two of the previous three wells drilled at Progress were in the same layer (D3) and demonstrated similar combined oil/NGL yields. The 16-36 well was completed with an updated frac design which is considered by Advantage to be a significant factor contributing to the high liquids yield and overall productivity. The Progress lands were acquired over the last 5 years and appraisal began in 2017. The four wells delineate the entire Progress land block and confirm the extensiveness of the oil accumulation.
The 16-36 well was shut-in for equipping and tie-in on September 2. The asset will be tied-in to Advantage's 100% owned Glacier Gas Plant for gas processing and liquids extraction, making use of existing surplus plant capacity and an existing section of an unused Advantage pipeline. The tie-in and equipping of the wells are targeted for completion by November 2019.
The 16-36 well represents a major milestone in demonstrating that each of Advantage's land blocks (Glacier, Pipestone/Wembley, Valhalla and Progress) features high-quality resource with attractive economics in the current commodity price environment. With this top-tier result at Progress, the asset has become a key element of the Corporation's near-term liquids development plan and is viewed by Management as competitive with Pipestone/Wembley.
Successful Liquids Development Continues with Liquids Production Increasing to 3,300 bbls/d
The Corporation's focus on liquids development has resulted in liquids production more than doubling, from an average rate of 1,491 bbls/d in 2018 to over 3,300 bbls/d in August 2019. Condensate-rich wells at east Glacier and Valhalla have driven the recent growth. In addition, Advantage's first Pipestone/Wembley well is expected to be brought on-production during the second half of September 2019 in conjunction with the commissioning of Tidewater's Pipestone gas plant.
Advantage continues to monitor natural gas price volatility and reduce gas production during times of low prices, consistent with our previously announced production strategy (see press release August 1, 2019). The Corporation is also proactively managing its capital spending plans to maintain a strong balance sheet and preserve financial flexibility.
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