[ad_1]
Strathcona Resources Ltd. reported operating earnings of $210.83 million (CAD 289.9 million) for the third quarter, compared to $206.76 million (CAD 284.3 million) in the prior-year period.
The Alberta-based company’s oil and natural gas sales for the quarter were $0.77 billion (CAD 1.06 billion), compared to $636.56 million (CAD 875.3 million) in the same period in 2022, according to its most recent earnings release. The company noted that the results did not include the contribution of Pipestone Energy Corp., which Strathcona acquired recently, with the acquisition completed on October 3. The acquisition resulted in Strathcona becoming a publicly traded reporting issuer on the Toronto Stock Exchange under the symbol SCR.
Strathcona’s total oil production rose to 119,527 barrels per day (bpd) in the quarter ended September 30, compared to year-ago production of 96,258 bpd. Total production was 147,461 barrels of oil equivalent per day (boepd) for the quarter, consisting of 81 percent oil and 86 percent total liquids, compared to 119.829 boepd in the prior-year period, according to the release.
Strathcona said it expects 2023 production to average approximately 155,000 boepd, including approximately 185.000 boepd in the fourth quarter. Capital expenditures are expected to total approximately $0.73 billion (CAD 1.0 billion) on a full-year basis.
Meanwhile, Strathcona’s board has approved a 2024 capital budget of approximately $0.95 billion (CAD 1.3 billion). Approximately $581.8 million (CAD 800 million) is allotted to replace produced reserves, including its assets in Cold Lake Thermal, Lloydminster Heavy Oil, and the Montney. Around $181.81 million (CAD 250 million) will be earmarked for growth capital directed towards filling existing facility capacity and contributing to near-term production growth, while roughly $181.81 million (CAD 250 million) will be allotted to long-lead debottlenecking and brownfield facility expansion capital, which is expected to contribute to long-term production growth and operating cost reduction, according to the release. The projects include adding water handling and steam generation capacity at Lindbergh and a waste heat recovery unit at Orion in Cold Lake Thermal, as well as adding steam generation capacity at Meota and expanding the existing polymer flood pilot at Bellis in Lloydminster Heavy Oil. On a combined basis, the expansion projects are expected to increase total production capacity by more than 25,000 bpd above current capacity by the end of 2026, the company noted.
For 2024, Strathcona expects production of 190,000 to 195,000 boepd, consisting of 70 percent oil and condensate, and 77 percent total liquids. The company said that the midpoint of this guidance reflects approximately 9 percent year-over-year production growth from Strathcona’s 2023 legacy assets of 147,000 boepd, and approximately flat production on Pipestone’s full-year 2023 production of 33,000 boepd. Strathcona’s 2024 guidance for the legacy Pipestone assets “reflects a disciplined capital program of approximately CAD 120 million [$87.27 million], focused on optimization of base production, which is expected to result in a reduced base decline rate and improved go-forward well economics”, it said.
In the third quarter, Strathcona completed the expansion of its Groundbirch gas plant in British Columbia, increasing production to 60 million cubic feet per day (MMcfpd) from 30 MMcfpd. The company subsequently brought on three new wells to fill capacity, which are performing in-line with its expectations. Further, Strathcona tied-in and began steam circulation at the 8 well pair H-pad at Tucker, marking the first new well pairs to be added to the property in approximately five years. The company said that “the H-pad is expected to benefit from improved reservoir characterization when compared to the majority of the previously drilled well pairs, driving higher production and a lower steam oil ratio for the asset into 2024”.
To contact the author, email rocky.teodoro@rigzone.com
[ad_2]
Source link