Company that bought Suffield oil and gas assets doing well

By Collin Gallant on May 16, 2018.

Medicine Hat News

The new owner of oil and gas assets on the Suffield block is preparing the first drilling campaign at the sprawling spread in four years, it said Tuesday as its first operating results from the southern Alberta field sent company stock soaring.

International Petroleum Corporation said Tuesday as part of its first-quarter reporting that the global company plans to drill six oils wells in the area it officially acquired earlier this year.

That’s part of a strategy to add mature, strong production areas to a global portfolio that also includes operations in France, Malaysia and the Netherlands.

“We have made excellent progress during 2017 and into early 2018 on all fronts in delivering on that strategy,” said Mike Nicholson, IPC’s chief executive officer, in a release.

“We are preparing for the launch of the first oil drilling campaign in the Suffield area assets since 2014… Work runs in parallel to mature additional oil drilling candidates to extend the program into 2019.”

IPC stock rose 73 cents, or about 11 per cent, to close at $7.53 on the Toronto Stock Exchange, while company shares traded on the Stockholm Nasdaq rose 5.35 krona, about C79-cents or 12 per cent.

At Suffield and Alderson, drilling should commence in the fourth quarter on six locations, and drilling activity could be maintained into 2019 as area staff are currently evaluating target locations, Nicholson stated.

Continued low prices for natural gas have the company reworking its gas exploration plans.

“On the gas side, the immediate focus is on gas optimization efforts to offset natural declines as opposed to new gas drilling,” said Nicholson. “The team is evaluating a wide range of activities over and above those already approved in our 2018 budget that could see additional activity before the year end.”

The sale closed on Jan. 5 for C$449 million from Cenovus, though another $12 million is due at the end of 2018 and additional monthly contingent payments, based on commodity prices, could be owing this year and next. The maximum total payment would be $32 million, and Nicholson confirmed monthly payments of $750,000 had been made on oil, which is now trading above US$70.

The purchase quadrupled the company’s reserves, and nearly doubled production with Alberta providing 6,400 barrels per day of oil and 15,400 barrels of oil equivalent in gas over the course of the first quarter.

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