Calgary’s Whitecap Resources Inc. saw natural gas production jump from Western Canada’s Montney and Duvernay shale formations as well as from conventional assets in Alberta and Saskatchewan in the second quarter.
The independent bucked the trend in North America and posted production of 377,700 Mcf/d for the quarter, up from 294,412 Mcf/d in 2Q2023.
Overall production was 177,314 boe/d in the quarter, a record, compared with 147,166 boe/d in the same quarter last year.
The company also is sticking to its guided activity program.
Joey Wong, vice president of West Division, said the company would bring online 15 Montney and Duvernay wells in the second half of the year.
“Although we would define each area as drilling liquids-rich natural gas wells, the liquids, and more specifically, the condensate volumes drive the economics of each area,” Wong explained.
“When running sensitivities on our Kaybob, Duvernay plus Kakwa, Lator and Musreau Montney type curves, we can run $0 natural gas prices for the first four months of production and still achieve average payout in less than one year across the four areas,” Wong added. “This is why it makes sense for us to adhere to our schedule and continue to bring wells on production despite the challenging natural gas environment at this time.”
So far in the North American earnings season, few companies have indicated natural gas production growth. CNX Resources Corp. and Range Resources Corp. said they were “unlikely” to curtail production. The Lower 48’s No. 1 natural gas producer, EQT Corp., has added curtailments for the second half of the year.
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Canadian hub NOVA/AECO C daily spot natural gas price closed at C93.5 cents/GJ on Monday and has been around the $1.00 level through most of July, according to NGI data.
Whitecap, which reports in Canadian dollars (C$1.00/US72 cents), achieved a realized natural gas price of $1.30/Mcf in the quarter, down from $2.59 in the same quarter last year.
The company is sticking to its capital expenditure plan of $0.9-1.1 billion for the year. Production for 2024 is set to be within the guided range of 167,000-172,000 boe/d (64% liquids).
Second quarter capital expenditures were $204 million and of the 27 wells spud during the second quarter, nine were Montney and Duvernay, and 18 were conventional, management said.
Net income was $244.5 million (41 cents/share) in the quarter, compared with $175.4 million (29 cents) in 2Q2023.
