Cenovus posted 14% production growth in Foster Creek & Christina Lake for Q1 2011; Plans to invest $1.7 billion - $1.9 billion for the rest of 2011

Cenovus was formed on 2009 from the split of Encana Corporation into two independent publicly traded energy companies: one an integrated oil company (Cenovus), the other a natural gas company (Encana). The company had operations in Athabasca region of Northern Alberta and southern Saskatchewan.

Source: Derrick Petroleum E&P Transactions Database

Cenovus posted increase in oil sands results for the first quarter 2011. The company’s quarterly production was 137,355 boepd, up 5% from the same period last year. Cenovus’s oil sands segment (66,828 bpd) posted 14% production increase over Q1 2010 (58,546 bpd). However the company’s natural gas production was 652 MMcfpd for Q1 2011, down 16% over Q1 2010. The Company’s strategy is to focus on the development of its substantial crude oil resource in Alberta and Saskatchewan. Cenovus is looking primarily in developing the land position in the Athabasca region in northeast Alberta.

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Cenovus reportable E&P segments include Oil Sands and Conventional. Oil Sands, which consists of Cenovus’s producing bitumen assets at Foster Creek and Christina Lake, heavy oil assets at Pelican Lake, new resource play assets such as Narrows Lake, Grand Rapids and Telephone Lake, and the Athabasca natural gas assets. Conventional, which include development and production of conventional crude oil, natural gas and NGLs in Alberta and Saskatchewan.

Expansion phases C and D at Christina Lake continuing to progress on target with expected first production at phase C in the third quarter of 2011 and at phase D in early 2013; and Additional progress on the CORE project at Wood River with coker start up expected in the fourth quarter of 2011.

Cenovus Plans to invest $1.7 billion - $1.9 billion for the rest of 2011

Oil Sands capital investment for Q12011 was primarily focused on facility spending at both Foster Creek and Christina Lake related to the next phases of expansion. The company drilled 440 gross stratigraphic wells during the quarter. Conventional capital investment in the quarter was focused on the continued development of conventional oil properties.

In Feb 2011, Cenovus announced for a venturing partner to develop oil sands holding and boost the value of reserves. The company will get $3 billion, assuming 50-50 JV. On a gross basis, about 260 of the assessment wells were drilled at the company’s oil sands properties in 2010 and an additional 450 strat wells are expected to be completed in 2011. In addition, Cenovus has identified 10 other oilsands projects - Narrows Lake, Grand Rapids in the Greater Pelican region and Telephone Lake project in the Borealis region for future development.

Source: Derrick Petroleum E&P Transactions Database

Pioneer investing $1.6 billion for 2011 drilling program (69% for Spraberry); Aims for 18% compounded annual growth for 2011-2013

Pioneer's capital program for 2011 totals $1.8 billion, consisting of $1.6 billion for drilling operations and $0.2 billion for vertical integration and facilities. The 2011 drilling capital of $1.6 billion is focused on oil and liquids-rich drilling, with 75% of the capital allocated to the Spraberry and Eagle Ford Shale plays. The company is projecting 18% compounded annual growth for 2011-2013.

Spraberry

Pioneer estimates that the company will drill approximately 700 wells into the Spraberry formation during 2011. This will increase its net production to between 38,000 boepd and 44,000 boepd by the final quarter of 2011. The company plans to substantially increase the number of rigs drilling the Spraberry formation in West Texas over the course of 2011.

“Our most recent drilling program called for 30 rigs to be operating in the Spraberry during 2011, but we now plan to increase the rig count to 35 rigs by mid-year,” revealed Pioneer Chairman and CEO Scott D. Sheffield.

Other companies working the Spraberry include Cheapeake Energy, which has 680,000 net acres in the Spraberry and three other plays in the Permian Basin.

Source: Derrick Petroleum E&P Transactions Database

Eagle Ford Shale

In 2011, Pioneer Natural Resources will ramp up its development of the Eagle Ford Shale as well. The company will drill 70 gross wells within its joint venture area with Reliance Industries. In 2010, the company drilled 26 wells into the Eagle Ford Shale. The company estimates that this development will increase production from the Eagle Ford Shale to between 10,000 and 13,000 BOEpd in 2011, triple the level of production in 2010.

Pioneer holds 310,000 gross acres in the Eagle Ford Shale, which is growing in popularity among producers because it holds natural gas and oil.

Pioneer Natural Resources plans continued exploitation of its large acreage position in the Spraberry trend in 2011, along with increased development of the Eagle Ford Shale as the company seeks to boost its oil and liquids production. This accelerated drilling program, which is planned to ramp up further in 2012 and 2013, is expected to increase the company’s current compound annual production growth target of more than 15 percent for the 2011 through 2013 period.

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Gran Tierra Energy increases 2011 capital program to $355 million; Raises production outlook; Plan to drill 38 wells in Colombia, Brazil, Peru and Argentina

Gran Tierra Energy increases 2011 capital program to develop recently acquired assets in South America. The company intends to spend approximately $55 million on the newly acquired assets with approximately $25 million in Colombia, $14 million in Peru and $16 million in Argentina.

Source: Derrick Petroleum Planned Exploration Wells Database

Gran Tierra acquired Petrolifera Petroleum in a $195 million deal in January 2011, bringing together a pair of Canadian-based companies exploring for oil in South America.

Source: Derrick Petroleum E&P Transactions Database

Including the Petrolifera assets, Gran Tierra sees average production of between 17,500 and 19,000 barrels of oil equivalent per day, net after royalty. In late December, the company had forecast production of 16,000 to 18,000 boepd net after royalty. The company, which has assets in Colombia, Argentina and Peru, raised its capital expenditure for the year by about 19% to $355 million.

In Colombia, Gran Tierra Energy intends to delineate a potential gas production platform in the Lower Magdalena basin, prepare for 2012 exploration drilling in Peru, and reverse production declines in Argentina where both oil and gas prices have consistently been rising.

Colombia

Gran Tierra Energy plans to spend approximately $14 million on drilling in Colombia, including one exploration well and one delineation well with the intention of evaluating a potential gas production platform in the Lower Magdalena Basin.

Peru

In 2011, Gran Tierra Energy intends to spend approximately $13 million in preparation for drilling in early 2012.

Argentina

Capital spending in Argentina will initially focus on reversing production declines on properties in the Neuquen Basin. Gran Tierra Energy plans to spend $14 million on drilling and completions in Argentina.

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