The recent “rapid” decline in world oil prices is the main reason given by Pengrowth Energy Corp., Calgary, for setting its 2015 capital budget at $200 million, 74% below its $770 million budget for 2014.
Pengrowth said $75 million is allocated to the Lindbergh thermal project in the Cold Lake area of eastern Alberta (OGJ Online, Dec. 16, 2014).
A revised two-phase development plan for Lindbergh delays the second phase by a year. Steaming operations at the 12,500-b/d Phase 1 have begun on 15 well pairs on two well pads, and steaming on remaining well pairs is expected in early February.
Previous capital spending at Lindbergh established a “low decline production base” that Pengrowth expects to maintain with a lower level of investment through 2016. Pengrowth said Lindbergh would provide positive cash flow even at $40/bbl.
In Pengrowth’s conventional category, $65 million is targeted on maintenance to support operations. The company said it “does not contemplate an active drilling program.”
Pengrowth does not expect a decrease in production from 2014’s average of 73,000 boe/d. That’s because of expected new production from Lindbergh.
Pengrowth also said there will be “a strong emphasis” in 2015 on reducing debt. Senior unsecured debt at yearend 2014 totaled $1.73 billion.
