Penn West's 2013 development program is focused primarily on light oil in concentrated core areas, where capital efficiencies are strong, and where infrastructure capacity has been built over 2011 and 2012.
- The Spearfish will be a major focus area, with approximately 30% of our development capital invested in this play. The Spearfish is defined by predictable and well established type curves that generate high internal rates of return and high netbacks, where incremental infrastructure capacity exists. We are targeting 13,500 boe per day of production from the Spearfish by the end of 2013.
- In the Slave Point region of our Carbonates play, Penn West expects to spend approximately 15% of its 2013 development capital. The company will focus on the Sawn area, where well results to date have been strong, and economic returns have been competitive. Penn West is the dominant player on this trend, and has significant expanding inventory to support many years of development. In the Swan Hills area of the Carbonates, Penn West expects to invest a further 10% in East Swan Hills.
- In 2013, the focus in the Cardium will be development drilling in Alder Flats, and the progression of our integrated enhanced oil recovery strategy. The Cardium is expected to be a long term growth driver for Penn West and the combination of primary development with enhanced oil recovery is projected to lead to significant and substantial capital investment and growth in future years.
- The Viking play in 2013 is characterized by a strategy which continues to fill existing capacity and maintain current production rates. This play is highly predictable and economic returns are robust.
- Penn West will continue to invest in smaller, efficient plays where moderate sized programs exist. In 2013 this will include the Medicine River Glauconite, Montney, Progress and Milton oil plays.
- Enhanced oil recovery is an important cornerstone of long term resource development and value creation. In 2013, Penn West will be moving forward with several horizontal waterflood pilots in the Cardium and the Slave Point.