CALGARY, AB, Feb. 8, 2021 /CNW/ - Paramount Resources Ltd.
("Paramount" or the "Company") (TSX: POU) is pleased to report that
fourth quarter 2020 sales volumes averaged approximately 73,000
Boe/d (42 percent liquids), ahead of guidance of 70,000 Boe/d to
72,000 Boe/d. December 2020
sales volumes averaged approximately 78,000 Boe/d (43 percent
liquids).
At Karr, fourth quarter sales volumes benefitted from the
addition of five new wells (three Upper Montney and two Middle
Montney) at the 5-16 West pad, which were brought onstream through
permanent facilities in November. Lease construction,
drilling and completion costs for this pad averaged approximately
$6.8 million per well, $0.4 million lower than prior estimates.
All-in lease construction, drilling, completion, equip and tie-in
(collectively, "DCET") costs averaged approximately $7.6 million per well, below Paramount's type
well DCET assumption for Karr of $8.4
million. Sales volumes averaged approximately 27,000
Boe/d (56 percent liquids) at Karr during the fourth quarter of
2020 and approximately 28,750 Boe/d (57 percent liquids) in
December. Excellent progress has been made on the most recent
six-well (all Middle Montney) Karr 3-10 pad. Preliminary DCET
costs are coming in below type well cost and first production is
now anticipated in February 2021, two
months ahead of schedule.
At Wapiti, fourth quarter sales volumes benefitted from the
addition of five new wells (two Middle Montney and three Lower
Montney) at the 5-3 West pad, which were all brought onstream
through permanent facilities by December. Lease construction,
drilling and completion costs for this pad averaged approximately
$7.2 million per well, $0.1 million lower than prior estimates.
All-in DCET costs averaged approximately $7.6 million per well, below Paramount's type
well DCET assumption for Wapiti of $7.9
million per well. Sales volumes averaged approximately
10,750 Boe/d (64 percent liquids) at Wapiti during the fourth
quarter of 2020 and approximately 13,500 Boe/d (62 percent liquids)
in December.
Paramount has had a very active start to 2021 with three rigs
running in the Grande Prairie
region. Complete fourth quarter and year-end 2020 results
will be provided before market open on March
3, 2021, including further details on the Company's
previously announced 2021 capital plans.
Paramount is also pleased to announce $80
million of non-core asset dispositions pursuant to three
transactions, two of which have recently closed and with the third
expected to close in February. The estimated impact to 2021
working interest production is approximately 2,600 Boe/d (95
percent natural gas). Combined, 2020 netbacks from these
properties totaled approximately $10
million. The proceeds from the dispositions will be
used to reduce amounts drawn on the Company's $1.0 billion senior secured revolving credit
facility. Pro forma the dispositions and the $35 million senior unsecured convertible
debenture financing completed in January, credit facility drawings
were approximately $700 million as at
December 31,
2020.
ABOUT PARAMOUNT
Paramount is an independent, publicly traded, liquids-focused
Canadian energy company that explores for and develops both
conventional and unconventional petroleum and natural gas reserves
and resources, including longer-term strategic exploration and
pre-development plays, and holds a portfolio of investments in
other entities. The Company's principal properties are located in
Alberta and British Columbia. Paramount's Class A common
shares are listed on the Toronto Stock Exchange under the symbol
"POU".
ADVISORIES
Forward-looking Information
Certain statements in this press release constitute
forward-looking information under applicable securities
legislation. More particularly, this press release contains
forward-looking information respecting the anticipated timing of
first production from the Karr 3-10 pad and the anticipated closing
of the third non-core asset disposition and the timing
thereof. Such forward-looking information is based on a
number of assumptions which may prove to be incorrect. In the
case of the anticipated timing of first production from the Karr
3-10 pad, such forward-looking information is based on anticipated
timelines being met in respect of the drilling, completing,
equipping and tie-in of the pad and on the availability of third
party processing and transportation capacity. In the case of
the anticipated closing of the third non-core asset disposition and
the timing thereof, such forward-looking information is based on
customary closing conditions being met and the completion of the
transaction without unanticipated delays. Although Paramount
believes that the expectations reflected in such forward-looking
information are reasonable based on the information available
at the time of this press release, undue reliance should not be
placed on the forward-looking information as Paramount can give no
assurance that such expectations will prove to be correct.
Forward-looking information is based on expectations, estimates and
projections that involve a number of risks and uncertainties which
could cause actual results to differ materially from those
anticipated by Paramount and described in the forward-looking
information. In the case of the anticipated timing of first
production from the Karr 3-10 pad, these material risks and
uncertainties include, but are not limited to, unexpected delays or
disruptions to drilling, completion, equipping and tie-in
activities and unexpected interruptions to the availability of
third party processing and transportation facilities. In the
case of the anticipated closing of the third non-core asset
disposition and the timing thereof, these risks and uncertainties
include, but are not limited to, an unexpected failure to satisfy
closing conditions or an unexpected delay in closing. For
more information relating to risks, see the sections titled
"Risk Factors" in Paramount's annual information form for
the year ended December 31,
2019, which is available on SEDAR at www.sedar.com. The
forward-looking information contained in this press release is made
as of the date hereof and, except as required by applicable
securities law, Paramount undertakes no obligation to update
publicly or revise any forward-looking statements or information,
whether as a result of new information, future events or
otherwise.
Non-GAAP Measure
In this press release, "Netback" means petroleum and natural gas
sales less royalties, operating expense and transportation and NGLs
processing costs. Netback is commonly used by management and
investors to compare the results of the Company's oil and gas
operations between periods. "Netback" does not have any
standardized meanings as prescribed by International Financial
Reporting Standards and is therefore considered a Non-GAAP
measure. Non-GAAP measures should not be considered in
isolation or construed as alternatives to their most directly
comparable measure calculated in accordance with GAAP, or other
measures of financial performance calculated in accordance with
GAAP. Non-GAAP measures are unlikely to be comparable to similar
measures presented by other issuers.
Oil and Gas Measures and Definitions
The term "liquids" includes oil, condensate and other natural
gas liquids (ethane, propane and butane).
This press release contains disclosures expressed as "Boe" and
"Boe/d". "Boe" means barrels of oil equivalent and Boe/d
means barrels of oil equivalent per day. Natural gas
equivalency volumes have been derived using the ratio of six
thousand cubic feet of natural gas to one barrel of oil when
converting natural gas to Boe. Equivalency measures may be
misleading, particularly if used in isolation. A conversion ratio
of six thousand cubic feet of natural gas to one barrel of oil is
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the well head. For the year ended December 31, 2020, the value ratio between crude
oil and natural gas was approximately 21:1. This value ratio is
significantly different from the energy equivalency ratio of 6:1.
Using a 6:1 ratio would be misleading as an indication of
value.
SOURCE Paramount Resources Ltd.