InPlay Oil Corp. Provides Operations Update and Announces Renewal of Credit Facilities
CALGARY, Alberta, July 08, 2019 (GLOBE NEWSWIRE) -- InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") is pleased to provide an operations update and announce that the annual review of its operating and syndicated credit facilities by its lenders has been completed.
Production for the second quarter, based on field estimates, is expected to average over 5,100 boed. The Company is very pleased with this result as it is above the high end of our annual production guidance of 4,900 – 5,100 boed, and achieved despite significant third party infrastructure turn arounds and downtime encountered during the quarter. The last two Willesden Green 1.5 mile Extended Reach Horizontal (“ERH”) wells that were drilled and brought on production in March 2019 have delivered some of our strongest production rates to date. The two ERH wells are flowing (without artificial lift) at the following initial production (“IP”) rates:
Average IP-30 days of 891 boed (83% light oil and liquids)Average IP-60 days of 817 boed (79% light oil and liquids)Average IP-90 days of 668 boed (73% light oil and liquids)
Our strong balance sheet, coupled with low second quarter industry activity in Canada, provided InPlay access to preferred equipment as the Company elected in June to commence drilling the next two 1.5 mile ERH wells directly offsetting the last two wells brought on in March. These two wells, originally scheduled to commence drilling in the third quarter, were drilled in 9.0 and 9.2 days respectively continuing our industry pacesetting times for 1.5 mile ERH wells, but more importantly achieving new low costs of less than $1.4 mm on the drilling operations per well. These two wells are planned to be completed and brought on production later in July. In addition, as per our guidance, InPlay anticipates drilling and completing another four net horizontal wells prior to year-end. With strong production results year to date and an active second half drilling program, InPlay is well positioned to achieve its annual production guidance.
InPlay's borrowing base has been reconfirmed by its lenders at $75 million, comprised of a $65 million revolving line of credit and a $10 million operating line of credit, with the term out dates being extended to May 31, 2020. In conjunction with the customary annual review, the terms of the credit facilities have been amended to include newly required industry standard banking compliance and reporting features related to abandonment and reclamation activities and liability management ratings. As well, a provision has been put in place until the next semi-annual review on November 30, 2019 in which the borrowing base may be re-determined if requested by any lender in the event the outstanding principal under the credit facilities exceeds $60 million. The Company believes that this credit facility provides ample liquidity for InPlay to execute its stated 2019 capital program. The Company has never been drawn in excess of $60 million on our credit facilities and our expectations with our current 2019 program is that capital spending should not exceed expected funds flow from operations based on future commodity pricing while also still delivering top tier light oil growth amongst our oil weighted peers.
InPlay is based in Calgary, Alberta and the common shares of InPlay are traded on The Toronto Stock Exchange under the trading symbol "IPO". For further information about the Company, please visit our website at www.inplayoil.com.
For further information please contact:
Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632
Darren Dittmer Chief Financial Officer InPlay Oil Corp. Telephone: (587) 955-0634
Forward-Looking Information and Statements
This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" “forecast” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: the volume and product mix of InPlay's oil and gas production; production estimates including 2019 guidance; future liquidity and financial capacity including availability under our current credit facilities; future results from operations; future exploration and development activities and related capital expenditures; the number of wells to be drilled, completed and tied-in and the timing thereof; and methods of funding our capital program. Forward-looking statements or information are based on a number of material factors, expectations or assumptions of InPlay which have been used to develop such statements and information but which may prove to be incorrect. Although InPlay believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because InPlay can give no assurance that such expectations will prove to be correct.
The forward-looking information and statements included herein are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; the potential for variation in the quality of the reservoirs in which we operate; changes in the demand for or supply of our products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of InPlay or by third party operators of our properties, increased debt levels or debt service requirements; inaccurate estimation of our oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in InPlay's disclosure documents.
The forward-looking information and statements contained in this news release speak only as of the date hereof and InPlay does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Test Results and Initial Production Rates
Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long term performance or of ultimate recovery. A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed.
Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of 6:1, utilizing a 6:1 conversion basis may be misleading as an indication of value.