Veren’s share price falls as oil producer cuts production forecast – Winnipeg Free Press

CALGARY – Oil producer Veren Inc. saw its share price fall more than 14 per cent on Thursday following news that the company had lowered its 2024 production forecast and that some of its wells were struggling with “underperformance.”

Formerly Crescent Point Energy Corp., which operates in Alberta and Saskatchewan. The company, known as , said in a statement on Thursday that it now expects an average daily production of 191,000 barrels of oil equivalent, compared to previous expectations of 192,500 to 197,500 barrels. /D.

The company also reported disappointing results from the Gold Creek area of ​​Alberta’s Montney oil and gas producing region, where a new type of well design was tested to improve efficiency.

The “plug and perf” well design, as it is known in industry parlance, is used to create multiple hydraulic fractures in a horizontal well. Veren was excited about the potential for this type of well design to produce the same output at a lower cost than single-point-entry fracturing.

However, production results from test wells at Gold Creek did not meet Veren’s expectations, and the company announced Thursday that it would stick to a single-point entry well design in the area.

In a conference call with analysts, Veren CEO Craig Bryksa fielded many questions about the disappointing well test results and falling production forecast. He emphasized that only a few wells in a given area were underperforming and said he believed Thursday’s stock price impact was an “overreaction.”

“I think this will play out over the next few days,” Bryksa said, adding that testing the “plug-and-perfect” design in the region was a learning experience that served to increase the company’s understanding of the region.

“I think the market will start to see the opportunity ahead of them, and I’m excited as we start looking at 2025, because we know we’re a lot smarter going into that year than we were going into 2024.”

Veren has devoted significant energy and capital to the Montney region in recent years. The company has been one of Canada’s most active oil and gas companies in recent years in mergers and acquisitions as it seeks to restructure its asset portfolio to focus on Montney and the adjacent Kaybob Duvernay shale gas field.

A series of blockbuster deals include the 2021 acquisition of Shell Canada’s Kaybob Duvernay assets for $900 million, the 2023 acquisition of Spartan Delta Corp.’s Montney assets for $1.7 billion and the 2023 acquisition of Hammerhead Energy Corp.’s Montney assets. It is available to purchase for $2.55. Billions of dollars soon thereafter – making Veren the dominant player in two of North America’s most important oil plays.