InPlay is a Calgary-based Oil and Gas Exploration Company focused on the Cardium and Duvernay resource plays in the Greater Pembina and Willesden Green areas SW of Edmonton. IPO brings strong technical skills to bear, using the latest cost-effective technology of monobore drilling with sliding sleeves. The Cardium play has repeatability, low declines, large reserves and long production life potential. IPO has been very acquisitive adding assets from Bellatrix and Anderson Energy Inc. in Q4/16. The corporate base decline rate is estimated by IPO at 22% but this will rise to the 26-28% range as they accelerate drilling activity. New production additions are coming on at around $17,000 per flowing boe.
Cardium and Belly River Oil Resource Projects
IPO was producing 4,100 boe/day in total with the largest contributions from the Pembina (2,675 boe/d) and Willesden Green (1,025 boe/d) areas in Q1/17. Over 78% of production was from the Cardium formation. In 2017 they expect to drill 11-12 wells and in 2018, 15-17 wells. The Belly River produced 675 boe/d in early 2017 and for a spend of $1.5M per year volumes should stay flat and generate more than $7M a year of cash flow. Drilling costs at Pembina are $1.8M per well to a depth of 1,600 meters, with 30-day IP rates averaging over 220 boe/d. At Willesden Green drilling costs are $2.1M to 2,000 meters, and 30-day IP rates exceed 210 boe/d. Drill times are down to eight days on their one mile long horizontal wells.
Duvernay Oil Resource Projects
This area will get minimal capex in 2017 as they watch competitors (private companies) de-risk the play. IPO may need to drill one vertical well to hold on to expiring acreage. The wells may cost $1.5M and they will log and core it resulting in holding nine sections going forward. They have 50 drillable locations now in inventory. Drilling for this light oil target with horizontal wells would cost $4-5M per well. IPO will hold back on an active horizontal program in this core area until energy prices stabilize at much higher levels and they can afford to spend this larger amount per well. The total depth here is 2200 meters.