Business
Kelt Provides an Update on the Impact of Current Western Canada Natural Gas Prices
Calgary, Alberta--(Newsfile Corp. - September 12, 2022) - Kelt Exploration Ltd. (TSX: KEL) ("K...
About this update from Kelt Exploration Ltd.
[{"type":"text","content":"Kelt Provides an Update on the Impact of Current Western Canada Natural Gas PricesCalgary, Alberta--(Newsfile Corp. - September 12, 2022) - Kelt Exploration Ltd. (TSX: KEL) (\"Kelt\" or the \"Company\") is providing an operations update with respect to the potential impact that current weak AECO and Station 2 spot gas prices may have to its 2022 operating and financial results.Production DowntimeCommencing during the third week of August 2022, daily AECO and Station 2 spot prices dropped significantly as a result of pipeline maintenance on the NGTL and T-South systems, an unplanned compressor failure in Alberta and restrictions to gas storage injections. Given the short-term nature of these low daily index prices, Kelt believed it would be prudent to temporarily shut-in certain drier gas wells in anticipation of a short turnaround price recovery. As a result, the Company shut-in significant gas volumes on certain days in both Alberta and British Columbia. Subsequently, current AECO prices have rebounded, however, AECO prices could remain volatile through September and October as further maintenance on the NGTL system is completed. Based on published maintenance upgrades on the T-South natural gas transmission system, it is expected that Station 2 prices should recover after maintenance is expected to be completed by September 16, 2022.On September 2, 2022, the TWM Pipestone Plant where Kelt processes approximately 33.0 MMcf per day of raw gas was shut-in as it conducts plant turnaround maintenance operations. The plant is expected to be shut-in for approximately three weeks.2022 GuidanceKelt is reducing its production guidance to be in a range from 28,500 to 29,500 BOE per day (previously forecasted to be in the range from 30,000 to 31,000 BOE per day). At current future strip pricing for both oil and gas and after adjusting for shut-in production outlined above, Kelt expects its estimated 2022 adjusted funds from operations to be within 3% of its previous forecast of $350.0 million.The following table summarizes average commodity prices during the first eight months of 2022 and future strip pricing used by Kelt for the remainder of the year:Jan-Aug2022Sep-Dec 2022 StripAverage2022PreviousForecastPercentChangeCommodity Prices   WTI Crude Oil (USD/bbl)100.6582.2594.5095.00(1%)   MSW Oil (CAD/bbl)126.17104.8811...