Canada’s Advantage Energy sees steady production growth
Canadian Montney producer Advantage Energy on December 1 confirmed a 2023 capital budget in the C$250-C$280mn (US$186-US$208mn) range and a three-year strategic plan that will see steady production growth of at least 10% annually, reaching 75,000 barrels of oil equivalent (boe)/day by 2025.
For 2023, adjusted funds flow is forecast to rise by 25%, based on mid-November strip pricing and planned share buybacks, and all free cash flow will remain allocated to the company’s share buyback program.
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Production in 2023 is expected to increase by 11%, averaging in the 59,000-62,500 boe/day range, even with a planned two-week turnaround at its key Glacier gas plant in May and continuing expectations for restrictions on the Nova Gas Transmission Limited (NGTL) system during the summer. Natural gas is expected to comprise 88% of total production in 2023, even with an expected 20% increase in liquids production.
With the expected summer restrictions on NGTL, Advantage continues to see enhanced volatility at the main AECO gas hub in Alberta and will reduce its exposure there to 25% over the 2023-24 period and to just 9% during the summer of 2023.
“By growing our liquids assets more rapidly than gas-weighted assets, revenue will be derived more evenly from multiple commodities, reducing exposure to gas price volatility,” it said.
An expansion of its Glacier gas plant to 425mn ft3/day from 400mn ft3/day is expected to be completed early in Q2 2023, Advantage said, and it continues on its path to net zero by 2025, bolstered by the revenue-generating carbon capture and storage (CCS) projects of its Entropy subsidiary, including at the Glacier gas plant, where CO2 injections began in August.