Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) provides an operations update and presents its 2016 year-end reserves. Traverse's independent reserve report, dated February 21, 2017, was prepared by Sproule Associates Limited ("Sproule") in accordance with National Instrument 51-101 effective December 31, 2016.
In 2016 Traverse reduced its capital program in response to the continuing weak commodity markets. Traverse drilled two wells in 2016, completed and commissioned a water disposal facility and completed a program of recompletions and workovers to optimize production. Total capital expenditures for 2016 were approximately $6.6 million. Traverse's production averaged 605 BOE/day during the fourth quarter of 2016 and 690 BOE/day for the year (49% oil and NGL). Undeveloped land holdings at December 31, 2016 were 181,600 gross (180,700 net) acres. At December 31, 2016 the Company had working capital of approximately $1.7 million and unutilized credit facilities of $7.0 million.
The Board of Directors has approved an initial exploration and development program for 2017 of $14 million to be financed by cash flow, working capital and new equity issues or debt as appropriate. The 2017 capital program is weighted towards the second half of the year and consistent with 2016 will be adjusted throughout the year in response to both commodity prices and exploration results.
In the Coyote area, one horizontal development well and one vertical exploratory well were drilled in January 2017. The horizontal well was drilled to a measured depth of 2,451 meters into the Upper Mannville formation. The horizontal leg of 1,100 meters was fracture stimulated using 30 stages. The well was tied into existing infrastructure in mid-February and has averaged 360 BOE/day comprised of 300 bbls/day oil and 360 mcf/day sales gas in the first 21 days of production. The well is currently flowing at approximately 315 BOE/day (83% oil). The vertical exploration well was drilled several miles west of the existing Coyote production on recently acquired freehold lands. The well was completed in the Mannville and is currently being production tested. Further exploratory and development drilling is planned for the Coyote area in 2017. One gas well that was production tested in November is still awaiting tie-in pending a pipeline acquisition or pipeline construction after break-up.
In the Watts area, a vertical exploratory well was drilled in January and is currently waiting on services to fracture treat the well to evaluate its productivity. An oil well and a gas well previously tied in during the fourth quarter of 2016 were placed on production in early February. The oil well has averaged 143 BOE/day comprised of 100 bbls/day oil and 260 mcf/day sales gas in its first 39 days of production. Current production is 115 BOE day (65% oil). The gas well is currently being recompleted in a Mannville zone and is waiting on services to fracture treat the zone. Additional activities for the Watts area in 2017 include seismic acquisition and additional drilling.
In the Turin area, two previously acquired vertical wells were completed in late 2016 and placed on production in mid-January. The oil well's current production is 35 BOE/day (69% oil). The other well, which was originally completed as a gas well, is currently shut in and will be recompleted in uphole zones.
Summary of oil and gas reserves
The Company's 2016 year end audited financial statements, the related management's discussion and analysis and Annual Information Form are expected to be filed on or about April 11, 2017.
SOURCE: Traverse Energy Ltd.
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