Aurora Increases in its Anticipated Well Count for 2013

Source: 3/27/2013, Location: North America

Aurora Oil & Gas Limited (Aurora) is pleased to announce an increase in its anticipated well count for 2013, with 45-50 net wells expected to spud on its Eagle Ford assets, representing a 25-30% increase over the 4th quarter 2012 guidance. This comprises 30 - 32 net wells expected to spud on Aurora’s non-operated Sugarkane acreage and 14-19 net wells on Aurora’s soon to be acquired operated acreage, which is to be brought into the Sugarkane asset portfolio.

Aurora’s forecast of between 14 -19 net wells being spud on its operated Eagle Ford acreage is based on one rig commencing in mid-2013 and a second rig being added shortly thereafter. Well locations will be determined by Aurora on an ongoing basis and management will consider adding a third rig prior to year end.

Production Forecast
Based on an estimated 45-50 net well count for 2013, Aurora forecasts a cumulative annual production range of 7.2-8.0 million boe (gross) (note 2012 cumulative production of 3.9 million boe gross) and 2013 exit production of 23,000-25,000 boe/d (gross) and 17,000-19,000 boe/d (net). (Note 2012 exit production 18,800 boe/d gross and 13,850 boe/d net)).

CAPEX Forecast
Aurora’s capital expenditure in 2013 is forecast to be US$430-465 million, of which approximately 40% is scheduled for Q4 2013. Approximately US$50 million of forecast CAPEX relates to field infrastructure.

Downspacing pilot program
The number of net non-operated wells expected to be spud has been revised from 39 previously guided due in part to Aurora and operator Marathon awaiting results of the current downspacing pilot program. In addition, we understand Marathon intends to balance rig location mobilisation across its interests and meet near term held-by-production requirements on its other acreage.

The Sugarkane Field has been part of a down spacing pilot program in the Eagle Ford - drilling wells closer together to increase recoveries - which Aurora views as a catalyst for reserves, production and value upside. The downspacing program is testing horizontal well spacing of 40 acres (336ft) and 60 acres (500ft) across the Sugarkane Field.

Aurora is finalising its review of pilot well performance and is highly encouraged by the preliminary results. A summary of this review will be released to market upon completion of the review, expected to be in the next week.

Accelerated development in 2nd half 2013

Activity levels over Aurora’s operated and non-operated acreage will be weighted to the second half of 2013. Aurora intends to commence drilling on its soon to be acquired operated Sugarkane acreage early in the 3rd quarter 2013. Aurora intends to apply 40 acre spacing to its development plans on this acreage. The acreage already hosts 11 wells on production, producing over 1600boe/d at the beginning of 2013. Aurora CEO Douglas E. Brooks said: “Aurora is anticipating another successful year of growth in the Eagle Ford. We are confident these development drilling programs together with the results of our downspacing pilot programs will deliver strong and accelerating production growth during 2013 and beyond. We see value upside from the recently announced acquisition of 100% owned and operated acreage, which we will incorporate into the Sugarkane asset. The recently completed US$300 million unsecured fixed coupon debt issuance and an undrawn US$200 million secured revolver facility means we are very well funded for both our operated and non-operated drilling programs.”

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