Spartan Oil Corp. announces current production in excess of 4,000 boepd and record third quarter cash flow of $12.9 million
Thursday, Nov 15, 2012Spartan Oil Corp. ("Spartan" or the "Company") (TSX:STO), is pleased to report its financial and operating results for the three and nine months ended September 30, 2012 along with this operational update. Selected financial and operational information is outlined below and should be read in conjunction with Spartan's interim financial statements and the related management discussion and analysis which are available for review at www.sedar.com or on the Company's website at www.spartanoil.ca.
Emphasizing the quality of the Company's asset base and the efficiency of its operations, Spartan continued to enjoy strong netbacks during the third quarter ended September 30, 2012. Operating netbacks averaged $53.12 during the quarter and corporate netbacks averaged $51.80. These netbacks propelled the Company to record cash flow during the third quarter of $12.9 million and net earnings of $4.7 million. Production averaged 2,505 boepd, an increase of 277% over the comparable period in 2011.
West Texas Intermediate (WTI) crude oil pricing was relatively stable in the third quarter of 2012, trading in the range of US$87.93 to US$95.34 per barrel. Average WTI pricing for the quarter was US$92.47, as compared to US$89.76 during the third quarter of 2011.
Edmonton Par pricing experienced greater volatility, trading in the range of $75.98 to $91.14 per barrel during the most recent quarter ended September 30, 2012. Average Edmonton Par pricing during the quarter was $84.62 per barrel. The volatility in Edmonton Par pricing was largely due to the impact of differentials on Canadian light oil that continued to negatively impact pricing during the third quarter. Differentials ranged from a high of $13.17 in July to a low of $1.84 in September, with an average differential on Canadian light oil of $7.23 during the quarter.
For the nine months ended September 30, 2012, Edmonton Par crude prices have averaged $87.01 per barrel, as compared to an average price of US$96.53 for WTI crude during the same period.
Net capital expenditures (excluding non cash items and capitalized G&A) during the second quarter of 2012 were $42.6 million. Of this amount, the Company spent $34.9 million on drilling and completions, $7.5 million on equipping, tie-ins, pipelines and facilities and $0.14 million on land, seismic and other capital expenditures.
Spartan drilled or participated in 20 (18.4 net) horizontal wells in Pembina during the third quarter of 2012. From June, 2011 to September, 2012, Spartan has drilled a total of 53 (48.6 net) horizontal wells and participated in an additional 6 (1.8 net) horizontal wells targeting Cardium light oil at Spartan's Keystone property with a 100% success rate.
Spartan has worked hard to become the most efficient Cardium driller in Pembina. The average time from spud to rig release for the Company's horizontal wells is 7 days. Costs have continued to improve to the point where Spartan is now experiencing average on-stream costs for its Cardium horizontal wells of approximately $2.3 million ($2.0 million drill and complete). This has a material impact on the economics of the Company's Cardium wells.
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