Lotus Creek Surpasses Production Guidance at Wilson Creek Project

Lotus Creek Exploration Inc. (TSXV:LTC) has been making waves in the Alberta light oil business with its organic growth strategy, which focuses on reinvesting cash flow into a repeatable, low-cost drilling inventory rather than pursuing acquisitions.

The company's flagship Wilson Creek project is at the center of this strategy, and an operational update released on September 2 highlighted the progress being made. Current production has reached roughly 5,500 barrels of oil equivalent per day in late August, with a weighted average of 72% to light oil and natural gas liquids.

The Belly River light oil program at Wilson Creek is running ahead of internal schedules, and management has reaffirmed full-year average production guidance of 3,800 to 4,200 barrels of oil equivalent per day. The company's debt-light position gives it flexibility to fund drilling internally and weather commodity price swings.

While the risks associated with small single-asset producers are present, Lotus Creek's concentrated play and visible near-term growth make it an attractive option for investors. As management continues to execute on its strategy, the question on everyone's mind is whether the company will eventually lift guidance as its inventory is derisked.