Yoho cuts spending on Duvernay delays

Delayed: Duvernay infrastructure build-out slows

Canadian junior Yoho Resources is cutting its capital spending programme by about 25% due to infrastructure delays in the emerging Duvernay shale play.

The Calgary-based company is also pushing back the drilling schedule into next year for a number of Duvernay wells due to the delays.

For the year, Yoho now plans to spend between C$30 million ($27.6 million) and C$32 million, about $10 million less than previously budgeted. Production is expected to average 1700 barrels oil equivalent per day for the year.

Activity in the Duvernay is increasing, with new gas plants recently built and old ones upgraded. However, planned an unplanned maintenance issues on these plants forced Yoho to undergo "a substantial amount of shut-in time" between May and September.

"These restrictions have also delayed on-stream dates for recently drilled wells," Yoho said, adding that it expects relief to come early next month, "at which time Yoho's Duvernay production will be restored to 100% of capacity".

Yoho estimates current production capacity of between 2400 and 2500 boepd, about half of which comes from the Duvernay.

Production for the third period averaged 1,563 boepd (27% oil and NGLs). Infrastructure issues in the Kaybob Duvernay area took a toll.

Yoho plans to participate in up to eight gross Kaybob horizontal Duvernay wells in 2015.

"Yoho has demonstrated that recent changes to completion methodology have been very successful and will utilize this methodology where applicable in the upcoming drilling programme," the company said.

Yoho is also planning to drill at least one horizontal well at Inga, British Columbia, targeting the Montney formation.

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