CORE AREA REVIEW

NORTH EAST BRITISH COLUMBIA

Umbach/Nig Creek/Fireweed 120,000 net acres / approximately 25,985 Boe/d*

Horn River Basin 68,000 net acres / Boe/d not material

*Average daily production Q4 2020

Storm’s land position is prospective for liquids-rich natural gas from the Montney formation and totals approximately 120,000 net acres (170 net sections) with 87 horizontal wells (81.9 net) drilled to the end of the fourth quarter.

Field activity in the fourth quarter included drilling three wells (3.0 net) at Umbach and finishing the completions and pipeline connections for four wells (4.0 net) at Nig Creek.

First quarter 2021 activity at Umbach will include completing and pipeline connecting three wells (3.0 net) and, at Fireweed, will include drilling three wells (1.5 net) plus constructing 19 kilometres of large diameter gathering and sales pipelines.

At the end of the fourth quarter, there were seven Montney horizontal wells (5.5 net) that had not started producing which included four wells (4.0 net) at Umbach and three wells (1.5 net) at Fireweed.

At Umbach (average 90% working interest), produced raw natural gas contains 1.2% H2S with field compression capacity totaling 150 Mmcf raw per day.  Firm processing commitments total 80 Mmcf raw per day (65 Mmcf per day at McMahon Gas Plant and 15 Mmcf per day at Stoddart Gas Plant).  Inlet volumes in the fourth quarter averaged 88 Mmcf per day.  Activity in 2021 is expected to maintain production and includes drilling the remaining three wells (3.0 net) on a six-well pad and completing six wells (6.0 net) with three completions in Q1 and three completions in Q4.

At Nig Creek (100% working interest), produced raw natural gas contains up to 0.5% H2S and is directed to the 100% working interest sour gas plant that started up in February 2020.  Gas plant inlet volumes in the fourth quarter averaged 50 Mmcf per day, sales were 9,930 Boe per day (46.2 Mmcf per day sales with total liquids of 48 barrels per Mmcf sales), and the production cost was $1.30 per Boe.  Capacity of the gas plant is estimated to be 70 Mmcf raw per day at the current average H2S of 0.3% (versus design capacity of 50 Mmcf raw per day at 0.5% H2S).  Future drilling is expected to include three to four wells each year to keep the gas plant full.  Activity in 2021 will be focused on increasing volumes processed at the gas plant to 70 Mmcf raw per day which will come from adding inlet compression (expected to increase rates from existing wells by 10% to 30%) and from drilling and completing three to four wells (3.0 to 4.0 net) in the lower Montney where the H2S is below 0.1%.

Recent wells at Nig Creek continue to exceed expectations:

  • The first well in the lower Montney started producing in December 2019 with the IP365 being 760 Boe per day sales with 33% liquids (180 barrels per day of condensate plus 70 barrels per day of NGL). The half-cycle cost to drill, complete and tie-in the well was $5.2 million which was paid out in approximately 13 months (cumulative field operating netback was $5.1 million to December 2020);
  • The four most recent wells in the upper Montney started producing in late October 2020 with the average IP120 being 9.4 Mmcf raw per day which is an average of 1,940 Boe per day sales with 25% liquids (250 barrels per day of condensate plus 230 barrels per day of NGL).

At Fireweed (50% working interest), activity was restarted in the fourth quarter of 2020 after being deferred following the collapse in the WTI crude oil price in April 2020.  Based on production history from offsetting horizontal wells, first year average field condensate-gas ratios are expected to be 30 to 70 barrels per Mmcf raw which is 100% to 400% higher than at Umbach and Nig Creek.  There are currently three standing wells (1.5 net) with two completed wells (1.0 net).  Activity in 2021 will include constructing a 50 Mmcf raw per day field compression facility with 19 kilometres of gathering and sales pipelines (50% working interest), drilling five wells (2.5 net), and completing three wells (1.5 net).  First production is expected in the fourth quarter of 2021 from five wells (2.5 net).

Through a predecessor company Storm began acquiring undeveloped land in the Horn River Basin of northeast British Columbia in 2008. As at December 2020, Storm had 100% working interest in 101 sections (68,000 net acres) which are prospective for natural gas from the Muskwa, Otter Park and Evie/Klua shales. Storm has one producing horizontal well in this area with cumulative production of 6 Bcf raw which was shut in for the majority of 2019 and produced intermittently in 2020 in response to improved commodity prices in the second half of the year. A core area totaling 30 sections has been proven to be productive through drilling of this well plus two vertical wells that were completed with final test rates of 900 Mcf per day over the final 24 hours of each flow test. Lands within the 30 section area have been continued through drilling and are not subject to expiry. The remaining 71 sections may be subject to expiry over a period of several years beginning in 2021.

ALBERTA

The majority of the properties in this area were sold on July 15, 2015 and there remains only one property with no associated production or reserves.  No capital was invested on this property by Storm from 2017 to 2020 and no activity is planned for 2021.

LATEST REPORT

DOWNLOAD OUR LATEST REPORT [PDF]

CORPORATE PRESENTATION

DOWNLOAD OUR FULL PRESENTATION [PDF]