Saturn Oil & Gas Inc. (TSX.V: SOIL) is one of Canada’s fastest growing oil companies and recently announced really good news. Earlier today Saturn announced an operational update on their three 100% working interest Viking horizontal wells brought online in August 2018. These wells have exceeded the Company’s internally assigned type curve with initial production rates averaging over 110 barrels of oil per day. These initial rates were the catalyst to the immediate development program currently underway.
The foundation for the fast growth is a 20 million USD senior secured revolving note facility with Prudential Capital Group, which was closed just recently. This group is the 81.4 billion USD private capital arm of PGIM, the 1 trillion USD global investment management businesses of Prudential Financial, Inc. (NYSE: PRU).
John Jeffrey, CEO of Saturn, commented, “We would like to thank Prudential, our new lending partner, for their commitment and support. This financing provides us the instrument to aggressively develop our light and heavy oil assets while continuing to strengthen our asset base.”
Saturn also announced today the appointment of Mr. Simon Akit, P.Eng., MBA to the Board of Directors. Akit is a Managing Director and Global Head of Energy Sales at Canaccord Genuity covering Canadian, U.S., and European funds with the firm’s global energy product. Mr. Akit has over 20 years of experience between capital markets and the oil and gas industry. Canaccord and Prudential are big names and Saturn is obviously surrounded by the right strong partners for sustainable growth.
The Saskatoon-based oil producer will now rapidly expand their development of their Viking light oil and Success heavy oil assets in west-central Saskatchewan. Based on the latest news Saturn already started a 20 well horizontal program which will run to the end of March 2019 and consist of 17 Viking light oil wells, primarily extended reach horizontals over their Kerrobert, Prairiedale, Milton and Plato assets. The program will also include three Success heavy oil horizontal wells at their Flaxcombe and Milton assets.
Scott Newman, COO of Saturn, commented, “This 20 well horizontal program is the culmination of a year of planning, strategic land acquisitions and de-risking assets. A development program of this scale provides us the means to achieve our corporate goal of exiting 2018 with a production rate in excess of 1,200 barrels of oil per day.”
About a month ago the company acquired 10 lease parcels totaling 8.25 sections, bringing Saturn’s total land position in the Kindersley area to 32.50 sections (27.50 net). Land, funding and experiences are the success components of Saturn and its team. Obviously it’s just a matter of time until the production numbers exceed 1,000 barrels per day of production this year and most likely exceed 1,750 barrels in 2019.
Major oil trading houses as Mercuria and Trafigura are already predicting the return of 100 USD per barrel of crude for the first time since 2014. Based on Saturn’s corporate presentation their current netback per barrel is at 48.50 CAD, so there seems to be huge upside potential. The stock is currently trading around 0.275 CAD with a market capitalization of above 50 million CAD. Make sure to keep an eye on SOIL.