Birchcliff Energy has expanded its position in an area of the Montney play it believes to have high value potential.
The company announced it has reached a $39 million deal for 18 sections of Montney land that are contiguous with is existing Pouce Coupe and Gordondale properties.
The purchase increases Birchcliff’s Montney position to a “mostly contiguous” 217 gross sections.
“In addition to consolidating our land position in the area, we believe that these lands are located on a significant liquids-rich trend in Pouce Coupe,” the company said in its third quarter results.
The new lands are located near what Birchcliff calls its “science and technology pad” in Pouce Coupe, where it has drilled four successful wells in 2018.
The purpose of the science and technology program is to collect high quality and high value data that can be used to enhance technical capabilities and understanding with respect to the drilling, completion and production from a multi-layer resource play, the company said earlier this year.
“Current production from the lands is approximately 700 boe/d (approximately 14 precent oil and NGLs) and is predominantly from 9 Montney horizontal wells which were drilled and completed using older technology. The most recent wells were drilled in 2014,” Birchcliff said this week.
The company plans to drill five wells from one pad on the lands in Q1/2019, with production expected to be processed at its Pouce Coupe Gas Plant.
The deal is expected to close in January 2019.
Birchcliff’s production averaged 79,331 boe/d in Q3/2018, a 22 percent increase from 65,276 boe/d in Q3 2017.
The company reported net income of $6.7 million, compared to a net loss of $121.7 million the previous year.