Canada’s Advantage O&G Boosts 2020 Guidance
Canadian producer Advantage Oil & Gas said October 8 it would increase its 2020 capital guidance by about 11% to reflect its improving outlook and augment natural gas production through the winter season.
The company now plans capital spending in the C$147-167mn (US$111-126mn) range this year, primarily to accelerate a four-well pad into Q4 2020.
The four additional wells will be drilled at Glacier – two into the D4 Montney horizon and two into the Upper Montney. They will augment six D1 Montney wells drilled since June this year and all expected to be onstream prior to year-end. Production from all 10 wells will be processed using existing capacity at Advantage’s 400m ft3/day Glacier gas plant.
“Advantage's 2021 production is expected to grow between 5% and 10%, with exceptional growth anticipated in adjusted funds flowbased on current natural gas futures pricing,” the company said. Natural gas production averaged 244mn ft3/day in the second quarter.
Net capital expenditures in 2021 will be about 75% of adjusted funds flow, Advantage said, and sustaining capital requirements in the 2021-2023 period are expected to be under C$80mn/yr, reflecting the company’s “prolific Montney assets and a corporate base decline rate of approximately 23%.”