BlackPearl cuts 2015 capital budget to $31 million (Can.)

BlackPearl Resources Inc., Calgary, is reducing its 2015 capital budget to $31 million (Can.) from $80 million (Can.) “as a result of the continued deterioration in crude oil prices,” the firm said.

The company’s capital spending in 2014 reached $240 million (Can.). Total capex in 2015 is expected to be $71 million (Can.) because of a deferral of $40 million (Can.) for the Onion Lake thermal project in Saskatchewan from fourth-quarter 2014 into 2015.

The new spending plans are based on forecasted oil prices of $55/bbl (US) for West Texas Intermediate, a $15/bbl (US) heavy oil differential, and an exchange rate of 85¢ (Can.) to the US dollar. BlackPearl’s November budget for 2015 was based on expectations of $85/bbl (US) for WTI, a $17/bbl (US) heavy oil differential, and an exchange rate of 90¢ (Can.) to the US dollar.

The primary focus of the 2015 capital program will be the completion of the first 6,000-b/d phase of the Onion Lake project (OGJ Online, June 27, 2013). Commencement of steam injection is expected in midyear.

“If oil prices improve, we are in a position to rapidly resume our capital plans,” said John Festival, president and chief executive officer.

BlackPearl expects 2015 production to average as high as 9,000 boe/d.