07:36 AM EDT, 10/08/2024 (MT Newswires) -- Advantage Energy ( AAVVF ) on Tuesday said it has begun strategic production curtailments of up to 130 mmcf/d of dry gas in response to "unusually low" Alberta natural gas prices. It said curtailments began during September and are planned to continue during the fourth quarter until pricing recovers.

The company said consistent with its strategic priorities of maximizing free cash flow and reducing net debt, production curtailment levels are being determined on a continuous basis to eliminate variable cash costs and defer development capital. It noted the curtailments are primarily dry gas at Glacier, which is amongst the lowest-cost natural gas assets in North America, and will not materially impact Advantage's cash flow. Liquids production, which is currently exceeding expectations, will be unaffected.

According to AAV, production during the third quarter was approximately 74,000 boe/d (368 mmcf/d natural gas, 8,100 bbls/d crude oil, and 4,600 bbls/d NGLs), including the impact of curtailments which averaged over 5,000 boe/d.

With lower depletion resulting from curtailments, Advantage's 2024 capital program has been reduced further and is expected to approach the bottom of the company's guidance range ($260-$290 million), further boosting free cash flow. Depending on the duration of gas price volatility and associated curtailments, 2024 production is expected to be approximately 70,000 boe/d, it said.

On capital discipline, AAV said it will remain an "acute focus". However, it added, gas market fundamentals "appear robust" in 2025 as global demand for clean, reliable natural gas continues to rise. "Together with our diversified market exposure and strategic hedging program, Advantage is well positioned for distinctive per-share growth and free cash flow as the natural gas market rebalances. The outlook for 2025 production and capital remains unchanged."

AAV was up $0.22 to $9.85 on the TSX yesterday.