Energy producer Yangarra Resources has released its operations update, as well as a detailed 2019 guidance. Highlights include a production increase of 64 percent year-over-year.
Calgary-based Yangarra Resources (TSX:YGR) has released its operations update, as well as a detailed 2019 guidance. Highlights include a production increase of 64 percent year-over-year.
As quoted from the press release:
Production for 2018 averaged approximately 9,400 boe/d which is a 64 percent increase on a production per share basis when compared to 2017, with fourth quarter 2018 production estimated at 12,200 boe/d.
The company drilled 36 horizontal (HZ) Cardium wells during 2018. Due to wide Edmonton par differentials in the fourth quarter, six of those wells were not completed (“DUCs”) and three additional wells that were completed in the fourth quarter of 2018 were not put on production until January 2019 when differentials improved significantly. In addition, seven wells that were shut in by Yangarra during 2018, due to excessively high third-party processing fees, will be placed on stream in January 2019 through Company owned infrastructure.
Yangarra has now drilled 60 HZ wells into the bioturbated section of the Cardium zone. Well results continue to improve as the company refines the drilling and completions processes. Wells #41-50 recently achieved 30 days of initial production (“IP-30”) data and have the best results to date with average operating day IP-30s of 752 boe/d, which is 55 percent better than the average operating day IP-30 from wells #1-40.
Yangarra further accelerated its infrastructure build-out in the fourth quarter improving its operating cost advantage from prior years with most of Yangarra’s gas gathered and compressed through Company owned infrastructure rather than third party facilities. Additional trucks were added to the fluid hauling fleet, largely eliminating higher priced third-party trucking. The pressure pumping and crew truck division was expanded during the year, again reducing the use of higher priced third-party providers. As industry conditions deteriorated in the second half of 2018, Yangarra reduced drilling and completion costs by replacing those service providers with more cost-effective options.
Several key initiatives, including, adoption of new technology for operations, advances in communications, SCADA, and better software implementation for production accounting have resulted in Yangarra being able to manage much higher levels of production while maintaining static head count in the Calgary office. Yangarra’s strategy of geographic and geological concentration in the Central Alberta Cardium allows the company to maintain a very low G&A burden while leading the industry in drilling and completion operations, all while maintaining best in class operating costs.