Our
Operations

Delphi’s core operating areas are in the Deep Basin of northwestern Alberta. This area garners great attention in the industry because of the stacked, multi-zone opportunities that contain liquids-rich natural gas and oil. The area is also extensively covered by the infrastructure required to bring hydrocarbon products to market.

Our three core assets: Bigstone Montney and Cretaceous, Hythe and Wapiti all possess the important components that make the Deep Basin a desirable place for oil and gas companies to conduct their business.

GO TO OPERATIONS WEBPAGE

The Bigstone property is located 150 kilometres southeast of the city of Grande Prairie. The natural gas production from the Cretaceous zones at Bigstone was the Company’s 4th largest producing asset in 2013, contributing an average of 1,020 boe/d, of which 19 percent was oil and natural gas liquids.

BIGSTONE (MONTNEY)

The liquids-rich Montney development project is located in the Bigstone area of Alberta, 150 kilometres southeast of Grande Prairie. In its third year of development for Delphi, in an area referred to as East Bigstone, the Montney formation continues to be a significant success story for the Corporation.

The Montney development continues to transform Delphi, evident by the production growth of both the Corporation and the Montney asset at East Bigstone. In the fourth quarter of 2014, Montney production averaged 7,743 boe/d, an increase of 99 percent from the fourth quarter of 2013 and represented 64 percent of the Corporation’s fourth quarter production. Most importantly, Delphi maintained natural gas liquids and field condensate yields at 95 barrels per million cubic feet (“bbls/mmcf”) in 2014, consistent with the prior year, with field and plant condensate representing 67 bbls/mmcf or 70 percent of the yield.

The Montney wells drilled in 2014 continued to be completed using the slickwater hybrid frac, creating a significantly large stimulated rock volume (shattering the rock) in the reservoir, lessening the production decline rates of the wells and allowing the hydrocarbons greater access to the wellbore.

Production from the Montney is produced through the Corporation’s 100 percent owned compression and dehydration facility located at 7-11-60-23 W5M (the “7-11 Facility”). The facility was originally constructed in the spring of 2012 with an initial capacity to handle 30 mmcf/d of raw natural gas. In addition to this facility, Delphi constructed tank storage capacity at the same site to handle 3,000 barrels of field condensate recovered at the wellsite before the barrels are transported to sales terminals. With the increase in the Montney production, Delphi initiated an expansion of its 7-11 Facility during the winter of 2014 to its current capacity of 45 mmcf/d of raw natural gas and field condensate tank storage capacity to 6,000 bbls. During the summer of 2014, Delphi constructed a nine mmcf/d compression/dehydration facility and gathering system to handle Delphi’s Montney production in the southern part of East Bigstone. Effective September 2014, Delphi executed a three year natural gas processing agreement with SemCams ULC for transportation to and processing of raw natural gas, from its Montney play at East Bigstone, at the SemCams K3 facility. Switching from SemCams KA facility to the Semcams K3 facility has resulted in an improved operating netback for the Montney as a result of reduced operating and transportation costs.

The success of the capital program and production performance of the Montney wells are reflected in the reserves assigned to the Montney development and the value of the Corporation. The Montney reserves, as evaluated by the Corporation’s independent qualified reserves evaluators, GLJ Petroleum Consultants Ltd., increased significantly in all reserve categories. In addition, despite a decrease in the price forecasts used by the Corporation’s independent engineers year over year (January 1, 2014 versus January 1, 2015), the net present value of future net revenue, before tax and discounted at ten percent also increased significantly across all reserve categories in 2014. The table below summarizes the year over year changes.

The Bigstone property is located 150 kilometres southeast of the city of Grande Prairie. The natural gas production from the Cretaceous zones at Bigstone was the Company’s 4th largest producing asset in 2013, contributing an average of 1,020 boe/d, of which 19 percent was oil and natural gas liquids.

BIGSTONE (CRETACEOUS)

The Bigstone property is located 150 kilometres southeast of the city of Grande Prairie. The sweet natural gas production from the shallower Cretaceous zones at Bigstone was the Corporation’s fourth largest producing asset in 2014, contributing an average of 1,064 boe/d, of which 18 percent was oil and natural gas liquids. Important infrastructure ownership in the area for this production includes the Corporation’s 25.2 percent working interest in the Bigstone West gas plant with a gross capacity of 85 mmcf/d. The Corporation has an average working interest of 69.4 percent in 59,680 acres of land, of which 22,080 acres (16,758 net) are undeveloped.

In the fall of 2014, Delphi closed the acquisition of 26.3 gross sections (19.3 net) of Cretaceous rights contiguous to the Company’s deeper Montney rights at West Bigstone and an extension of its current Cretaceous rights in the greater Bigstone area. As part of the transaction, Delphi also acquired approximately 40 kilometres of field gathering infrastructure and a 100 percent working interest in an under-utilized 15 mmcf/d sweet shallow cut natural gas processing plant. The Company’s initial exploratory horizontal Montney test well at West Bigstone currently produces to this natural gas processing plant.

The Hythe property is located 60 kilometres northwest of the city of Grande Prairie and was the Company’s second largest producing asset in 2013, contributing an average of 1,891 boe/d of which 20 percent was oil and natural gas liquids.

Hythe

The Hythe property is located 60 kilometres northwest of the city of Grande Prairie and was the Corporation’s second largest producing asset in 2014, contributing an average of 1,481 boe/d of which 19 percent was oil and natural gas liquids. Important infrastructure ownership includes working interests in three gas plants with a combined gross capacity of over 300 mmcf/d. The Corporation has a working interest of 23.9 percent in the Goodfare gas plant, 4.3 percent in the Knopcik gas plant and 0.1 percent in the Sexsmith gas plant. In March of 2015, the Corporation became the operator of the Goodfare gas plant and is currently evaluating optimization projects to increase the efficiency of the plant and reduce operating costs. The Corporation has an average working interest of 64 percent in 155,869 acres of land, of which 82,353 acres (53,342 net) are undeveloped.

On September 30, 2014, Delphi closed the sale of certain interests from its Hythe property for net proceeds of $15.8 million. The disposed assets were producing largely from the Doe Creek Formation and included 23.3 gross (17.7 net) sections of primarily shallow Cretaceous rights.

The Wapiti property is located 50 kilometres south of the city of Grande Prairie and was the Company’s third largest producing asset in 2013, contributing an average of 1,755 boe/d, of which 36 percent was oil and natural gas liquids.

Wapiti

The Wapiti property is located 50 kilometres south of the city of Grande Prairie and was the Corporation’s third largest producing asset in 2014, contributing an average of 1,339 boe/d, of which 35 percent was oil and natural gas liquids. Important infrastructure ownership includes working interests in three gas plants. These include a working interest of 0.38 percent in the South Wapiti gas plant, 0.51 percent in the Wapiti Shallow Cut gas plant and 0.92 percent interest in the Wapiti Deep Cut gas plant. These gas plants have a combined processing capacity of 940 mmcf/d. The Corporation has an average working interest of 57 percent in 59,364 acres of land, of which 29,284 acres (19,281 net) are undeveloped.

Rich gas from the multi-zone Cretaceous and Jurassic intervals continue to offer significant value from the liquid volumes that are extracted and sold at premium prices. Wapiti continues to be a growth area with a significant drilling inventory of over 48 identified net multi-zone locations. The Corporation is evaluating the potential for drilling horizontal wells with multi-stage fracturing to further enhance the already robust economics of these liquid rich intervals