Northern Petroleum (AIM: NOP), the AIM quoted oil company focusing on production led growth, provides the following update regarding production and development in north west Alberta, Canada:
- net average oil production from 1 April up to and including 18 April was 449 barrels of oil per day (‘bopd’)
- regional trucking restrictions were imposed between 19 and 29 April due to the expected annual spring thaw, which can cause wet and difficult road surface conditions:
- production from wells tied in via pipeline continued at a rate of approximately 212 bopd for the remainder of April
- overall average production for the whole of April was therefore 354 bopd
- trucking restrictions were lifted on 29 April due to unusually dry weather allowing the local roads to dry out quicker than in previous years
- trucked wells now back in production
- 9-25 battery ready for start up once final approvals are obtained from regulator, which will initially add another three producing wells
- costs incurred to date at the Rainbow redevelopment project indicate that operating costs per barrel are between US$20 and US$25, when measured at an average production rate of 400 bopd
- the variable operating costs per barrel of incremental production over and above 400 bopd are forecast to be between US$4 and US$10 per barrel, depending on whether the oil is transferred to the processing facility by pipeline or truck
- following the completion of the current programme, a summer work programme will be developed for Q3, to achieve further production enhancements and operating cost synergies.
Keith Bush, Chief Executive Officer, commented:
‘The operations team in Canada and London have done well to more than double production in the last three months, with production from the 9-25 battery yet to be added. This has provided a production base which gives valuable net cashflow for the group.
‘Additional production above the current level comes at very low incremental cost and is a key focus once the current work programme is completed. The Company has substantial owned infrastructure which can process much higher volumes of production with a limited increase in fixed operating costs. Building production from here will create an asset with very attractive net cashflow and value, even at current oil prices.’
