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Be the first with the news that moves the market- Delphi Energy (TSX:DEE) has successfully drilled three Montney wells at its Alberta LNG property
- However, due to the recent market volatility, the company is likely to defer the remainder of its 2020 drill program
- The oil and gas industry have been reeling recently after a trade war between OPEC and Russia sent the oil price to historic lows
- This, coupled with COVID-19’s ongoing economic impact, has caused a number of oil and gas companies, including Delphi, to cut their capital spending budgets until the market improves
- Delphi Energy (DEE) is down 9.09 per cent, with share trading at C$0.20 and a market cap of $3.86 million
Natural gas producer, Delphi Energy (TSX:DEE) has successfully drilled three Montney wells, but is halting further drilling amid a volatile market.
The three wells were drilled at the company’s Alberta-based properties and are located near the West Bigstone area, which is known to be highly productive.
Delphi Energy already has existing pipelines near the new wells and is therefore hoping that hook-up costs could be significantly reduced.
The company recently made substantive changes to its drilling procedures. As a result of the changes, the company saw drill-time drop by two weeks and costs drop by C$1.4 million per well, compared to 2019’s drill program.
Due to these cost reductions, Delphi expects to finish this quarter $6 million under budget.
However, the company is taking some time to reconsider its capital spending budget for the rest of 2020.
An ongoing trade war between OPEC and Russia, has brought an already poor oil-price to historic lows in the past month. This, coupled with COVID-19’s ongoing economic and logistical effects, has resulted in an unforeseen and difficult oil and gas market.
With that in mind, the company has stated it will likely defer any further drilling until the oil price improves.
Furthermore, the company has chosen to forestall filing its annual information form. The Canadian securities authority is allowing companies to hold-off filing the form, which was initially due on March 30.
In doing this, the securities authority is giving companies more time to account for the recent unexpected economic downturn and not rush out incomplete or incorrect filings.
Delphi intends to file the form before the new date of April 25.
Delphi Energy (DEE) is down 9.09 per cent, with shares trading at $0.20 at 12:20pm EST.
