Through 2014, Trilogy built on the success it achieved in the previous three years with the continued development drilling of the Kaybob Montney oil pool. In 2010 through 2013, Trilogy drilled a total of 78 wells into the pool, followed by an additional 29 wells in 2014. Given the current commodity price environment, Trilogy plans to reduce its drilling program to 2 wells in the first quarter and evaluate its activity levels once crude oil prices improve
In 2014, Trilogy spent approximately $118 million to drill and complete 29 wells to find 5.2 MMBoe of proved reserves and 6.5 MMBoe of proved plus probable reserves. On average, the year’s drilling and completion program added 180 MBoe of proved reserves per well (61 percent oil reserves) and 226 MBoe per well of proved plus probable reserves (61 percent oil reserves). This represents a finding and development cost of $22.62/Boe for proved reserves and $18.15/Boe for proved plus probable reserves.
In 2014, production from the pool averaged 10,214 Boe/d (62 percent oil and natural gas liquids production), with operating costs of $7.74/Boe and operating netback of $48.09/Boe. As of year-end 2014, the pool has produced approximately 8.3 MMBbl of oil from the horizontal oil wells drilled into the pool since its discovery in 2010. Under the current royalty regime, each well qualifies for royalty relief, where Crown royalties are reduced to 5 percent on the initial 80 to 90 MBoe of production. Historically, the costs of approximately $4 million to drill, complete and tie-in are usually paid out in less than one year of production.
Production in 2014 was less than expected due to wells on the eastern portion of the pool performing below expectations. Wells drilled later in the year on the north and western portions of the pool appear to be performing at or above type curve expectation and will be the focus of additional drilling when commodity prices improve.