Crew’s operations are focused primarily in the Montney in Northeast British Columbia (“NEBC”), where we continue to execute on our strategy:
- Develop our world-class Montney resource, which offers scale and repeatability
- Control costs and generate high capital efficiencies
- Maintain operatorship and high working interest
- Conduct all of our activities responsibly with respect for the environment and the communities in which we operate and reside
Crew’s capital has primarily been focused on continued Montney development of our liquids rich natural gas area at Septimus / West Septimus (“Greater Septimus”), and our light oil weighted asset at Tower, BC. This development focus is designed to provide a platform for long term, profitable corporate growth, and further delineate Crew’s NEBC Montney resource. We will also be well positioned to begin the next phase of infrastructure construction required to support continued production growth from our Montney lands.
A World-Class Resource Play With Excellent Market Access
The Montney resource play is a very large, siltstone gas reservoir that is situated in the northeast corner of the province of British Columbia in western Canada and ranks among the top natural gas basins in the world.
>1000 ft thick
Montney formation that is predictable in size and thickness
World-Class Montney Resource Play
Westcoast Energy Pipeline
Alliance Pipeline (to Chicago)
TC Energy Pipeline System
Core Operating Areas
Crew’s focus is primarily on the development of our World Class Montney Resource, which offers us significant long-term potential to grow our production, reserves and cash flow. Our Lloydminster area in Alberta / Saskatchewan offers attractive development opportunities with excellent capital efficiencies from our Heavy Oil assets.
Our Montney area assets include Septimus / West Septimus, Tower, Groundbirch, Attachie, Oak/Flatrock and Portage and are situated in northeast British Columbia. Our operations include liquids rich natural gas and light oil production from the siltstone Montney formation. At up to 300 metres thick, the Montney is developed with long-reach horizontal wells, completed with water-based fracture stimulations.
Crew holds a large, contiguous land base of over 264,000 net acres (>225,000 net undeveloped acres) in the Montney with condensate, light oil, liquids-rich natural gas & dry gas, and only 19% of our Upper Montney lands and less than 1% of our Lower Montney lands have been assigned reserves to the end of 2020.
net acres of Montney land held by Crew
identified Montney drilling locations
of land in Upper Montney, and <1% in Lower Montney have reserves booked
Crew’s Lloydminster asset is situated in the Saskatchewan/Alberta border region near the city of Lloydminster, Saskatchewan. Production from the area is comprised of 12º to 14º API heavy oil from several stacked Cretaceous aged reservoirs.
Development includes conventional vertical and horizontal wells completed for primary and secondary waterflood production from these reservoirs. The majority of Crew’s oil production from Lloydminster is gathered and processed at our 100% owned oil battery which is directly tied into the Manito Pipeline System.
2020 Reserves Highlights
Highlights of our proved developed producing (“PDP”), total proved (“1P”) and total proved plus probable (“2P”) reserves from the Sproule Report are provided below. All finding, development and acquisition (“FD&A”)1,2 costs and finding and development (“F&D”)1,2 costs below include changes in future development capital (“FDC”) unless otherwise noted.
In response to low commodity prices caused by a price war between OPEC+ members in the first half of the year coupled with global oil demand destruction related to the COVID-19 pandemic, Crew executed a modest capital program for the majority of 2020. After formulating our two-year asset development initiative, as first outlined in Crew’s December 10, 2020 news release, we began executing our plan designed to efficiently calibrate production to match infrastructure and transportation commitments and expand margins. As a result, Crew’s net capital expenditures3 for the year after the impact of the strategic infrastructure transactions (as announced Feb. 27 and Nov. 5, 2020) totaled $28.1 million ($86.3 million gross1), with 48% of the total gross capital invested during Q4/20. Capital was primarily allocated to the drilling of 12.0 net extended reach horizontal (“ERH”) wells and the completion of 7.0 net wells at Greater Septimus.
With the funds received from the infrastructure transactions combined with operational improvements and declining capital costs, Crew achieved a record low PDP F&D costs1,2 of $6.83 per boe and FD&A costs1,2; of $2.00 per boe in 2020, resulting in recycle ratios1,2 of 1.77x and 6.05x, respectively. Further, the Company achieved our seventh consecutive year of declining average three-year 2P F&D costs of $2.26 per boe and FD&A costs of $0.92 per boe, with corresponding reductions of 60% and 82%, respectively, from the three-year averages posted in 2019.
The bulk of Crew’s Q4/20 development activity occurred at the Company’s 9-5 pad, where per well costs averaged 12% below forecasts. Lower costs and improved liquids pricing set the 9-5 pad on track to become the most efficient in our history, with improved completions design, longer ERH wells and faster drill times generating strong capital efficiencies and recycle ratios. 2P F&D costs2 for the 9-5 pad totaled $3.05 per boe compared to $4.90 per boe when the wells were originally booked in West Septimus. Improved capital efficiencies supported the reduction of FDC costs by $95 million and $180 million for 1P reserves and 2P reserves, respectively, with decreases of 11% and 10% compared to year-end 2019, respectively, creating negative finding costs when the change in future capital is included.
In 2020, Crew added 12.0 MMboe of PDP reserves, prior to accounting for production, representing approximately 19% of 2019 PDP reserves with a reserve replacement ratio of 150%, bringing the total to 67.1 MMboe at year-end after accounting for production, a 6% increase over 2019.
Crew’s 1P and 2P reserves in 2020 remained stable year-over-year, as reserve additions in both categories offset the negative impact of weaker pricing following the onset of the COVID-19 pandemic. With 8.6 MMboe of 1P reserves added, production was effectively replaced by 106%, resulting in 202.5 MMboe of 1P reserves at year end, while 2P reserves replaced 93% of production and remained at 410.0 MMboe.