Black Swan Energy Ltd. commissioned and started up the first of two phases at its new shallow cut gas processing facility in northeast British Columbia, the company said Feb. 11.

The c-38-C Aitken Creek gas plant had its first gas-to-sales on Jan. 30. The liquids yield, including field condensate, will likely be 40 barrels (bbl).Production has increased to 12Mboe/d, including volumes processed through third-party facilities.

Phase 1 capacity is 50 MMcf/d, and will be completed with the addition of a third compressor in March, bringing total volumes to about 15 Mboe/d, which Black Swan expects to hold flat through the remainder of 2016.

Future plans include a Phase 2 expansion of the plant, bringing the processing capacity up to 100 MMcf/d of liquids-rich gas. Black Swan is currently in the process of procuring long-lead components required for the expansion. Processing capacity at Aitken Creek is incremental to Black Swan's fully owned and operated 50 MMcf/d of compression, which supports volumes flowing to Spectra's McMahon gas plant.

Black Swan has drilled 46 horizontal Montney wells to date, with 20 currently onstream. Production through Aitken Creek is initially supplied by an eight-well pad that was drilled and tested in 2015.

As part of the 2016 capital program, Black Swan will tie in wells from four additional multiwell pads to this facility. The southern acreage will be the focus for initial development, and over the next five years, production could grow to 500 MMcf/d.

At year-end 2015, Black Swan held more than 217,000 net acres of Montney Formation land with more than 2,800 potential horizontal drilling locations. Since fourth-quarter 2014, the company has drilled and tested 17 upper Montney horizontal wells on three multiwell pads, with average test rates per well of more than 1,700 boe/d.

A risk management program was implemented to support capex over the next three years; for 2016, 40% of forecast Montney production has been hedged, the company said.

The Spectra and Alliance pipelines support the Aitken Creek plant and processing commitments at the McMahon plant.

Also, Black Swan said its lending syndicate completed an interim review in November 2015, raising its credit facility to CA$130 million, up from CA$80 million.

Black Swan Energy Ltd. is based in Calgary, Alberta.