NuVista Energy provides operational update, Pipestone well test results


CALGARY -- NuVista Energy Ltd. has provided a significant operational update, including the startup at Bilbo block--its largest pad drilled to date; powerful IP30 success from Elmworth block high intensity fractured wells (HiFi); the successful and on-time conclusion of the Keyera Simonette gas plant planned turnaround; and the achievement of a compelling well test in our emerging Pipestone block. This test provides early flow data, increasing our confidence in above-typecurve results.

Bilbo Block

The Bilbo compression and dehydration facility is now at capacity with peak production up to 20,000 boed depending on normal operational fluctuations. The company's largest pad, containing six wells, has now been successfully started up at Bilbo. Initial results are very encouraging as the wells all move through their early days of flowback and cleanup. Despite the shorter lateral length of 1,425 to 1,500 m on these wells and the early stage of cleanup, they are averaging approximately 3.8 MMcfd raw gas and over 1,000 bpd of condensate each.

Elmworth Block

Completion activities progressed very well with summer weather, and all nine planned new Elmworth wells have been completed successfully and are in various stages of tie-in and initial flowback. Two of these wells have HiFi completions and have nearly reached IP30 with flowrates, which eclipse prior Elmworth results. The wells flowed an average of 2,200 boed, including 9.9 MMcfd raw gas and 723 bpd of condensate each. This represents more than 2.5x the condensate rate of the Elmworth HiFi typecurve and more than double the condensate rate of the Elmworth historical average results. The IP30 CGR was 73 bbl/MMcf versus the typecurve CGR of 40. If these results are repeated for the other HiFi wells which are coming on stream in Elmworth, it would represent a step-change improvement in well economics. The company says it expects to see continued production increases in our Elmworth facilities through the fall as these nine wells are tied-in and started-up.

Pipestone Block

As previously reported, NuVista has concluded the drilling of its first well in this emerging block. The well was drilled to a lateral length of 3,100 m in just 19 days, and has now been successfully completed with regular fracture intensity including 26 stages. The initial cleanup and flow test was conducted within the limit of environmental flaring regulations, with very encouraging results. The well flowed for approximately 3.5 days with the final 24-hr rate being over 1,400 boed including 6 MMcfd raw gas and 600 bpd condensate, with rates still increasing at the end of the short test period. Although the well was still cleaning up, the early indications provide a CGR greater than 100 bbl/MMcf versus initial type-curve expectation of 60 bbl/MMcf. The raw gas result was also favorable. The well will remain shut in until the Pipestone block facilities are in place. The Pipestone stakeholder and development plan is proceeding well to underpin the company's planned future growth in this area.

Lower Montney

NuVista has recently completed the drilling of our first Lower Montney horizontal well, at Bilbo. We expect to complete this test well by early 2018 in this newly emerging layer of the Montney formation.

The planned Keyera Simonette gas plant turnaround was completed on schedule, allowing the Bilbo block to resume operations. Current corporate production is returning to the prior run rate of 33,000 boed, and the company expects to push beyond those levels in the coming weeks as it removes well test equipment from these new wells and bring them on to permanent production. With drilling and completion costs continuing in the expected range, it anticipates being in the upper portion of its capital guidance range of $280-$300 million as previously communicated. NuVista has reiterated the production guidance ranges for the third quarter at 26,000 to 29,000 boed and fourth quarter at 35,000 to 38,000 boed. Guidance for the full year of 2017 is also unchanged at 28,000 to 31,000 boed.

Given top quality assets and a management team focused upon relentless improvement, NuVista will continue to optimize well results, improve margins, and grow our production profitably toward its 2021 goal of 60,000 boed.

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