Palliser Oil & Gas Corporation continues to focus its abilities on expanding production shipped by rail. The Company completed the construction of a clean oil treating facility in the third quarter which is estimated to increase the Company's capacity to ship approximately 75% of corporate production by rail, up from its previous capacity of approximately 50%.
Commissioning of the cleaning facility required a build in production inventory during the third quarter, which negatively affected third quarter 2013 sales volumes, but the Company commenced shipping clean oil at the start of the fourth quarter. This facility will have a positive impact on fourth quarter and future realized heavy oil pricing.
The third quarter of 2013 saw lower average production compared to the record production achieved in the second quarter of 2013. A prolonged spring breakup that extended well into the third quarter contributed to significant downtime on several wells, and delayed the majority of budgeted third quarter capital projects until late in the quarter, which allowed production declines to outpace additions.