PetroBakken to spend $700 mln in 2012, expects higher output, boosts hedging program

PetroBakken Energy (TSE:PBN) reiterated its 2011 production forecast on Tuesday, as well as announcing several plans for 2012, including a boost to its hedging program and a $700 million capital expenditure program.

The oil producer said it continues to expect an exit production rate for 2011 of over 49,000 barrels of oil equivalent per day (boe/d).

To date, the company's Bakken oil business has produced over 23,000 boe/d, while its Cardium business has produced over 14,750 boe/d. Total production as of the start of December had reached over 48,000 boe/d, representing a 23 percent increase over the third quarter.

For the full year 2012, PetroBakken said it expects an exit production rate of between 50,000 and 54,000 boe/d.

The company expects to deploy about $700 million in capital expenditures, mainly focused on horizontal drilling, largely in the Bakken and Cardium oil plays. These expenditures will be funded entirely from cash derived from operations, with surplus cash funding dividends and debt repayment, it said.

Specifically, PetroBakken said it will focus on its light oil play in southeast Saskatchewan for the Bakken, and in central Alberta for the Cardium. It will also focus on its Mississippian conventional light oil play in southeast Saskatchewan.

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