UMBACH

 

Storm's land position at Umbach is prospective for liquids-rich natural gas from the Montney formation and currently totals 109,000 net acres (155 net sections).  To date, Storm has drilled 65 horizontal wells (61.4 net).

Production in the third quarter was 15,073 Boe per day with liquids recovery representing 38 barrels per Mmcf sales (57% being higher priced condensate).

Activity in the third quarter included completing five horizontal wells (5.0 net) and drilling three horizontal wells (3.0 net).  Two horizontal wells (2.0 net) started production which left an inventory of ten horizontal wells (10.0 net) that had not started producing at the end of the quarter including four completed wells.  Eight horizontal wells (8.0 net) have started production in 2017 with production from these wells totaling 4,800 Boe per day in the third quarter. 

Since 2013, approximately $100 million has been invested in building out infrastructure (pipelines and facilities) with current capacity totaling 115 Mmcf per day raw gas from three field compression facilities.  Throughput in the third quarter was 79 Mmcf per day raw gas (August and September averaged 88 Mmcf per day).  Capacity can be increased to 150 Mmcf per day by installing additional compression at a cost of $7.0 million with the installation timing dependent on well performance and commodity prices.  The increased compression capacity would support growth in corporate production to approximately 27,000 Boe per day.

Storm’s produced raw natural gas is sour (approximately 1.2% H2S) with 78% directed to the McMahon Gas Plant in the third quarter and 22% directed to the Stoddart Gas Plant.  At the Stoddart Gas Plant, the firm processing commitment is 15 Mmcf raw gas per day until April 2018.  At the McMahon Gas Plant, the firm processing commitment started in January 2017, totals 65 Mmcf raw gas per day, has terms of 5 to 15 years, and includes the option to add up to 35 Mmcf raw gas per day. 

A summary of horizontal well performance and costs is provided below.  The drilling and completion cost per meter for the 2017 wells has decreased by 12% from 2016.  The 2017 wells are 28% longer than wells completed in 2014 to 2016 and the average rate over the first 180 calendar days is approximately 20% better after adjusting for the 39 days of downtime for the McMahon Gas Plant turnaround.  Notably, the field condensate rate averaged 128 barrels per day over the same period, an improvement of 130% after adjusting for the downtime.  IP90’s are not used for comparing well performance as the majority of new horizontal wells are initially restricted to manage fluid production.  Further improvements in well performance and costs will be realized from the wells being drilled in the second half of 2017 which are approximately 60% longer than wells completed in 2014 to 2016.

Year of Completion

Frac

Stages

Completed

Length

Actual Drill & Complete Cost

IP90 Cal Day

Mmcf/d Raw

IP180 Cal Day 

Mmcf/d Raw

IP365 Cal Day

Mmcf/d Raw

2014

12 hz’s(1)

19

1,170 m

$4.6 million

$3,900 per meter

4.9 Mmcf/d

12 hz’s

4.4 Mmcf/d

12 hz’s

3.5 Mmcf/d

12 hz’s

2015

11 hz’s

22

1,360 m

$4.4 million

$3,200 per meter

4.7 Mmcf/d

11 hz’s

4.2 Mmcf/d

11 hz’s

3.3 Mmcf/d

11 hz’s

2016

10 hz’s

25

 1,300 m

$3.8 million

$2,900 per meter

5.1 Mmcf/d

10 hz’s

4.2 Mmcf/d

10 hz’s

3.6 Mmcf/d

7 hz’s

2017

5 hz’s

34

1,630 m

$4.2 million

$2,600 per meter

4.9 Mmcf/d(2)

5 hz’s

4.1 Mmcf/d(3)

3 hz’s

 

  • (1) 2014 wells exclude a middle Montney well (this table provides analysis of upper Montney wells only).
  • (2) Produced for an average of approximately 80 days due to the McMahon maintenance turnaround J         June 5 to July 14.
  • (3) Produced for an average of approximately 141 days due to the McMahon maintenance turnaround        June 5 to July 14.