Crew’s full year 2023 net capital expenditures budget is forecasted to be $230 to $250 million, with H2/23 expected to be $185 to $200 million, of which $55 to $65 million is planned to be directed to infrastructure and deposits on long-lead items. Infrastructure investment plans include:
- condensate stabilization and waste heat recovery at Septimus during H1/23 designed to increase Septimus Gas Plant condensate capacity to 5,000 bbls per day, facilitating expanded development of our ultra-condensate rich area, building on the success of our 4-14 wells;
- construction of 20 kilometers of both 12-inch and 10-inch pipeline from Groundbirch to West Septimus, of which 50% is planned to be completed in H2/23;
- expenditures for long lead equipment for the planned expansion of compression at West Septimus in 2024 designed to increase the facility’s inlet capacity to over 135 mmcf per day; and
- payment to secure a line position for electrification of the planned Groundbirch Plant with final investment decision (“FID”) anticipated by year end 2023, which will be dependent on receiving regulatory approvals to complete the project, supportive commodity prices and securing financing for the project.
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Crew Energy Wells Drilled 2022
The focus on achieving specific goals in H1/23 is expected to result in Crew’s 2023 drilling and completions being predominantly focused in H2/23. The 2023 Budget includes the drilling of 18 (18.0 net) wells and completion of 19 (19.0 net) wells in the Greater Septimus and Groundbirch areas of NE BC during H2/23. With timing of the new drills beginning in Q3/23, coupled with anticipated shut-ins of existing wells to accommodate offsetting completions activity, volumes in 2023 are forecast to be in line with 2022, averaging 30,000 to 32,000 boe per day2 with a forecast exit rate of 35,000 to 37,000 boe per day2 (exit being defined as average production through the month of December 2023).
Active Hedging Program Through 2023
Crew has been actively hedging natural gas and condensate volumes for 2023 and plans to begin hedging for 2024 and 2025. Through 2023, Crew has approximately 72,000 GJ’s hedged at C$4.47 per GJ (or $5.45 per mcf using Crew’s higher heat content factor) and 1,500 bbls per day of condensate at an average price of C$106.00 per bbl for the first six months of 2023 and 250 bbls per day at an average price of C$102.50 per bbl for the second half of 2023.
2024 PLAN
Crew’s Four-Year Plan assumes the investment of between $400 to $450 million in net capital expenditures5 in 2024, with $165 to $185 million allocated to infrastructure. The plan includes drilling approximately 30 (30.0 net) wells, completing approximately 24 (24.0 net) wells, as well as drilling and completing one (1.0 net) disposal well and initiating construction of the Groundbirch Plant, which will be integral to support the Company’s long-term growth and expanded scale.
Between H2/23 and H2/24, Crew would be required to identify and secure financing for the Groundbirch Plant, which could potentially be sourced from AFF, bank or other debt instruments, asset sales, equity issuances, an infrastructure financing partner or some combination thereof. Crew’s 2024 average annual production is targeted at 35,000 to 37,000 boe per day2 with a targeted exit rate between 38,000 to 40,000 boe per day2.
2025 PLAN
Crew assumes 2025 net capital expenditures5 between $400 to $450 million, of which approximately $135 to $155 million is expected to be allocated to infrastructure. The 2025 plan targets drilling of approximately 37 (37.0 net) wells and completing approximately 28 (28.0 net) wells, along with construction, completion and tie-in of the Groundbirch Plant in Q4/25. Average annual production in 2025 is targeted at 41,000 to 43,000 boe per day2, resulting in a targeted exit rate of over 55,000 boe per day2, with the higher volumes designed to support improved per unit cash costs5 declining to between $8.00 to $9.00 per boe in Q4/25.
2026 PLAN
In the final year of the Four-Year Plan, Crew has the potential to increase average production to between 60,000 to 62,000 boe per day2. Based on current strip prices it is expected that this level of production would generate significant free AFF5 based on a preliminary model comprising 2026 maintenance capital investment of approximately $325 million to $375 million, the majority of which would be directed to drill approximately 33 (33.0 net) wells and complete approximately 40 (40.0 net) wells, designed to enable Crew to fill the Groundbirch Plant.
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