Operations

Exploration and Development Overview

Exploration Overview

Great reservoir rock. Large oil-in-place. Multi-zone opportunities. Extensive high-working-interest land positions. And aggressive use of long-leg horizontal wells, multi-stage fracturing and other advanced drilling and completions technology. These are among the key ingredients that have driven DeeThree’s organic growth into the intermediate producer class. Plus the most important ingredient of all: the mindset of explorationists, motivating us to drill in places and to use methods that other companies simply wouldn’t.

DeeThree’s drilling activity, land capture and overall capital investment are focused on two oil-producing assets in Alberta:

  1. Ferguson in southeast Alberta. It produces oil from the Upper Bakken siltstone – a DeeThree discovery.
  2. Brazeau in west-central Alberta. It produces oil, natural gas and NGL from multiple zones in the Belly River sands. DeeThree was first in the industry to prove up the Belly River for horizontal oil development.

In addition, the Company holds non-core lands in the Peace River Arch of northwest Alberta, where it is engaged in carefully selected drilling for Montney, Doig and Charlie Lake opportunities.

Highlights

Since 2010, DeeThree’s organic exploration and development activities have delivered the following successes:

  • Growth in production from 500 boe per day entering 2011, to 6,000 boe per day exiting 2012, to 10,000 boe per day exiting the first quarter of 2014. Production growth has been accompanied by increasing netbacks per boe, including an average netback of $40.50 per boe in 2013;
  • Three-year growth in proved plus probable reserves from 1.6 million boe at year-end 2010 to 39.4 million boe at year-end 2013, at declining finding and development costs per boe;
  • Growth in landholdings at the two key plays from 453 net sections exiting 2011 to 550 net sections exiting 2013;
  • Growth in the inventory of future horizontal locations from effectively zero when DeeThree’s horizontal drilling began at each play, to over 500 locations entering 2014; and
  • An overall resource base internally estimated at approximately 2.5 billion barrels of resource-in-place at the two main assets.

DeeThree’s extensive mapped pool areas and its large horizontal drilling inventory are the foundation for years of additional growth through the intermediate producer class.

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