Production Restart | Curtailment/Shut-In
Gear Energy Turns on Taps After Curtailing Production by 80% in May
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Gear Energy Ltd. reported updates to current and future expected operations.
Puts Restricted Production Back Online
With recent improvement in oil prices, Gear has initiated a gradual production re-start across the majority of the asset base. After initiating shut ins through April, corporate production was restricted by almost 80% in May with approximately 1,300 boe/d delivered to market.
Current estimates are for June production to be approximately 3,700 boe/d, July to be approximately 5,000 boe/d and August to be approximately 6,000 boe/d.
With minimal capital expenditures currently forecast for the remainder of 2020, production is expected to decline slightly through to December, providing an annual average of 5,200 – 5,300 boe/d. (57% Heavy Oil, 28% Light & Medium Oil, 3% NGL’s, and 12% Gas)
Annual guidance is as follows:
|
2020 Guidance |
|
|
Annual Production (boe/d) |
5,200 – 5,300 |
|
Heavy Oil Weighting (%) |
57 |
|
Light/Medium Oil & NGL Weighting (%) |
31 |
|
Royalties (%) |
11 |
|
Operating plus Transportation Costs ($/boe) |
17.00 – 18.00 |
|
G&A Costs ($/boe) |
2.60 |
|
Interest Costs ($/boe) |
2.05 |
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Capital and Abandonment Expenditures ($ million) |
13 |
Borrowing Base Redetermination Extension
Gear’s lenders have agreed to extend the re-determination of the semi-annual borrowing base to July 10, 2020 to allow for additional time to finalize negotiations and to obtain required approvals.
Borrowings will remain capped at $75 million during this period.
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