February 8, 2018
Canbriam Energy has been busy with investment plans, and a deal with Suncor for mineral holdings in British Columbia.
Canbriam announced a number of corporate updates including plans to invest between $50 million to $60 million in the first half of this year, which is expected to support full year production between 37,000 and 39,000 boe per day, including approximately 15 per cent liquids component. Production expectations represent effective capacity of Canbriam’s 100 per cent owned and operated processing facilities. The full year 2018 capital budget is expected to remain within Canbriam’s cash flow expectations based on current commodity price levels and hedge positions.
“Our prudent approach to development supports a 2018 capital budget that is expected to be funded entirely with cash flow due to challenging natural gas price levels,” said Paul Myers, Canbriam’s President & Chief Executive Officer. “The additional lands will complement our existing Montney land position and infrastructure to support the scalable, profitable development of liquids rich natural gas.”
Canbriam also announces that it has reached an agreement with Suncor Energy Inc. to exchange all of Suncor’s northeast British Columbia mineral land holdings and consideration of $52 million for a 37 percent equity interest in Canbriam. The transaction is subject to regulatory approval and is expected to close in Q1 2018.
2018 Capital Budget
Canbriam is targeting a capital budget that will be directed toward sustaining full capacity at its Altares Montney asset, based on nameplate capacity of 40,000 boe per day including liquids. The company’s full year production expectations, between 37,000 and 39,000 boe per day, reflect routine downtime as existing wells are temporarily taken offline to accommodate the completion and tie-in of new wells.
Canbriam has deferred construction of Phase 3 of its Altares Processing Facility, and has purchased long lead items and expects to commence construction once commodity prices increase to a level that supports production growth beyond the current capacity. Phase 3 is expected to add an incremental 120 million cubic feet per day, or approximately 20,000 boe per day including liquids, of processing capacity once complete.
Canbriam continues to pursue hedging opportunities to protect its capital program and support full cycle returns. As of January 31, Canbriam has 80,000 gigajoules (Gj) per day of its natural gas production hedged at $2.37 per Gj, which combined with basis hedges represents over 65 per cent of full year production expectations. For 2018 basis hedges, Canbriam has physical sales contracts tied to the Sumas, Chicago, AECO and SoCal natural gas price hubs less a fixed differential, which help diversify away from Station 2 prices. Canbriam has 3,750 barrels per day of liquids production hedged at $68.32 per barrel, which represents over 80 per cent of 2018 liquids production expectations.
Q4 2017 Operational highlights
On December 11, 2017, Canbriam recommissioned its b-24-H facility, adding 50 million cubic feet per day of processing, or approximately 10,000 boe per day with liquids. The b-24-H facility had been offline since May 2017 due to an unplanned outage. Canbriam’s production averaged 39,000 boe per day for the final two weeks of last year.
Canbriam also commissioned its liquids pipeline in November 2017, which represents a major milestone for the company’s marketing transportation strategy. This liquids pipeline provides safe, efficient and reliable transportation of NGL and condensate production to marketing hubs in Alberta and will eliminate the need to truck liquid hydrocarbons.
(Canbriam Energy Inc.)