Saturn Oil & Gas Inc., Calgary, increased its 2022 capital expenditures budget to $50 million following the February close of a deal to acquire 240 b/d of high netback light oil production in the company’s core Viking business unit.
The company’s 2022 capital expenditure program is currently under way having contracted one drilling rig to be active throughout the year at the Oxbow asset in southeast Saskatchewan, excluding breakup and maintenance periods. Six horizontal wells drilled were drilled on the asset from December 2021 to January 2022. Results are expected mid-March. The Oxbow asset produces primarily from the Frobisher and Midale formations. Over 85% of the 2022 drilling budget will be directed to the Oxbow asset.
For Oxbow, the company has earmarked $25.8 million to drill 29.2 net wells. Another $5.8 million is set aside for the Viking asset in west central Saskatchewan where the company expects to drill 5 net wells.
For 2022, average annual production of 7,800-8,200 boe/d is expected. Fourth-quarter 2022 average production of 8,100-8,500 boe/d is expected, representing year-over-year production growth of 12-17%.
Company average production for fourth quarter 2021 was 7,245 boe/d with 96% oil and NGL.
At the mid-point of guidance, yearend 2022 net debt is expected to be reduced to $39.4 million (down 45% from an estimated $71.0 million at yearend 2021).