Low natural gas prices have led Advantage Energy (TSX: AAV) to curtail natural gas production in Alberta. The curtailments reportedly began in September, and are expected to continue during the fourth quarter.
Curtailments are currently anticipated to impact up to 130 mmcf/d of natural gas production, in what is said to be a strategic method of cutting production. Production for curtailment is being selected based on variable cash costs an deferring development capital, with current curtailments primarily occurring at Glacier.
Liquid production is said to be unimpacted. Production in the third quarter was estimated at 74,000 boe/d, which translates to 368 mmcf/d of natural gas, 8,100 bbls/d crude oil and 4,600 bbls/d NGL, and includes the impact of 5,000 boe/d of curtailments related to natural gas.
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Free cash flow however is said to have been positively impacted, with the 2024 capital program expected to come in near the low end of the 2024 guidance range of $260 to $290 million.
2024 production as a result of the curtailments is expected to average 70,000 boe/d. Outlooks for 2025 are said to remain unchanged, however the curtailments are said to last until pricing recovers.
Advantage Energy last traded at $9.85 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
