NuVista October 2014 updates

NuVista Energy Ltd. has announced that Keyera Corporation has commenced production into the new 94 km x 12 in. dia. pipeline which connects the NuVista Bilbo South Compressor Station to the Keyera Simonette gas plant. The startup was achieved on 26th September, and NuVista will increase production rates as the system proceeds through the initial run-in period. Although the system is still in the early stages of run-in, NuVista is pleased with performance thus far and production volumes are rising from the previously announced level of 20 000 bpd.

NuVista is also pleased to announce that it has signed an agreement with SemCAMS ULC for transportation and processing of an additional 30 million ft³/d of raw gas from our condensate rich Montney play in the Wapiti area of Alberta. The agreement is underpinned by take-or-pay terms for a period of 10 years. To provide the capacity, SemCAMS will construct a compressor station to augment the capacity of their existing Wapiti area pipeline network.

NuVista will supply gas to this contract from our Elmworth (North) Development Block, as we have continued to experience drilling success and expanded running room in and around this block. When added to our existing SemCAMS contracts at Elmworth, this agreement will expand NuVista's total Elmworth block egress capacity to 77 million ft³/d of raw gas. The existing and future expanded volumes flow to the SemCAMS operated Kaybob South 3 (K3) gas plant for processing. The SemCAMS compressor station is expected to be in service in mid 2016, although this date will be confirmed once front end engineering is complete.

NuVista is also pleased to announce the signing of two non-core asset sales agreements including NuVista's non-core Northeast British Columbia natural gas and Wapiti Cardium assets. The expected closing dates for these transactions are 30 October and 6 November, respectively. The assets are currently producing approximately 1400 bpd and have been sold for gross cash proceeds of US$ 49 million plus 3.5 net sections of Wapiti Montney undeveloped land rights.

These asset sales, together with those completed earlier in 2014 bring NuVista's total year-to-date proceeds from asset dispositions to US$ 67.2 million cash plus 3.5 net sections of Wapiti Montney land. NuVista is pleased with this progress in focusing the corporate asset base while providing financial flexibility supporting our rising rate of capital investment in the profitable condensate rich Montney at Wapiti. NuVista retains significant uphole Cretaceous production and land rights at Wapiti with considerable multi-zone production potential over and above the large drilling inventory in our main focus which is the Wapiti Montney.

Production guidance ranges reconfirmed despite divested production volumes

Guidance for the third quarter of 2014 is now narrowed to a range of 17 800 - 18 300 bpd versus the previous range of 17 300 - 18 300. We have been advised of a temporary reduction in gas production with a fourth quarter impact of 650 bpd due to an unplanned non-operated pipeline outage and repair affecting our Wapiti sweet uphole production. With the startup of the new Keyera facilities, NuVista is pleased to confirm that our previous fourth quarter guidance range of 20 000 - 23 000 bpd is unchanged despite the pressure associated with this unplanned outage of 650 bpd and the year-to-date sale of assets with total associated production of approximately 2200 bpd. Annual 2014 guidance of 17 500 - 18 500 bpd is also unchanged, and NuVista's previous range for 2015 remains at 23 500 - 25 000 bpd.

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/07102014/nuvista-october-2014-updates/