PetroBakken Energy announced strong first quarter results with growth in production and a busy drilling program with a strong operating netback, mostly due to an increase in oil prices.PetroBakken, which is a subsidiary of Petrobank Energy and Resources, drilled 73 wells (or 59.5 net) in the first quarter, including 50 (41.1 net) in the Bakken, and 19 (16.3 net) in conventional plays in the southeast region.PetroBakken had production of 43,098 boepd in the first quarter, which is a 95-per-cent increase over the prior year, due mainly to the acquisition of TriStar on Oct. 1, 2009, and to drilling activities in the Bakken resource play.The operating netback of $52.93 boe was an improvement of 53 per cent from the previous year due mainly to increased oil prices. Compared with the fourth quarter of 2009, the netback was an increase of 13 per cent.With the production growth and strong netback, funds flow from operations was $189.1 million, slightly ahead of capital expenditures of $185.1 million.The total production in the first quarter was a decline from the fourth quarter of 2009, because the company disposed of about 5,000 boepd in asset disposition, which was partially offset by new production of about 4,500 boepd from two new acquisitions Berens and Rondo, which closed in late February and mid-March respectively.
In the Crown land sale, the company spent $34.8 million to acquire 11,300 acres.
With spring road bans on, production typically declines in the second quarter until drilling ramps up again, and production is expected to grow through the balance of the year.Once drilling is back underway, PetroBakken expects to restart with an eight-rig program in the Bakken, a seven-rig program in the Cardium, and a two-rig program in the conventional light oil play in southeast Saskatchewan and Manitoba. The plans for 2010 is to drill over 120 (or 100 net) wells in the Bakken resource play, over 100 (65 net) wells in the Cardium play, and over 55 (45 net) wells in the conventional light oil play.Last July, PetroBakken began to experiment with bilateral horizontal wells in the Bakken play, and with continued experimentation the company has established a repeatable drilling and completion program for horizontal bilateral wells. The cost to drill these wells are about $600,000 higher than for a single lateral well, and production is increasing significantly as well. The vast majority of wells drilled for Bakken will be 1,400-metre long bilateral wells with a total of 30 staged fracture stimulations per well.
