Cequence Energy Ltd. reported operational highlights on Feb. 4. At the 16-33-61-27W5 Simonette Montney well, a new completion design was used. The well’s average production rate for the last week was 1,800 barrels of oil equivalent per day (boe/d).

The well is producing about 500 bbl/d of frack water, 28% recovered to date. The 16-33 well was drilled in a part of the Simonette property with limited existing reserve bookings. Its condensate yield is predicted to be about 40 bbl, higher than the current forecast of 20 bbl.

The well is the longest Simonette Montney well drilled by Cequence, at 6,100 m measured depth with a completed lateral length of 3,050 m. The well was spudded and then put onstream in 55 days, completed with a 70-stage cemented coil shift-frack system. It was drilled and cased for CA$4.1 million and completed for CA$4.5 million, but cost about 30% less per meter compared with the 2014 program average.

Based on the 16-33 well’s success, the average length of future wells in the development plan was increased by about 25% to 2,500 m.

Cequence said the average drilling, completion and tie-in cost per well would be CA$7.7 million.

The 16-33 well has de-risked about eight to 10 sections of land on the western side of Cequence’s acreage and will add three locations, the company said.

Paul Wanklyn, president and CEO, said that the higher liquids content at the 16-33 well is encouraging and opens up new potential in the western portion of Simonette.

The 7-11-62-26W5 Dunvegan well produced 47Mbbl of 41 degree API oil in its first 150 operating days for an average 313 bbl/d. Oil is flowing at 270 bbl/d, 97% oil cut.

The 4-11 offset well was drilled to 3,000 m lateral length and completed through a 47-stage cemented coil-shift frack system. The well came on production Jan. 31 and is producing 148 bbl/d of oil and 115 bbl/d of water (56% oil cut).

Cequence has planned 28 potential (24 net) wells with average lateral length of 1,900 m. There could be about 60 MMbbl of total net oil in place, the company said. Cequence currently has 26 Simonette padsites constructed and pipeline connected with more than 200 potential horizontal wells available to drill from these sites.

Overall, 2016 production averaged 9,500 boe/d based on field estimates, in line with the guidance, the company said. The company added that 2016’s overall production will average between 9,200 boe/d and 9,500 boe/d without any additional drilling activity.

Due to ongoing low commodity prices, the company deferred drilling two (1.5 net) Dunvegan oil wells in the first quarter of 2016. Capex for first-half 2016 will be about CA$8.5 million and will be limited to the completion a plant addition, the NGTL meter station and the tie-in of the most recent Simonette wells.

About half of the expected natural gas production for 2016 has been hedged, while 400 bbl/d of crude has been hedged.

Cequence Energy Ltd. is based in Calgary, Alberta.