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(Jeff McIntosh/Jeff McIntosh for The Globe and Mail)
(Jeff McIntosh/Jeff McIntosh for The Globe and Mail)

Vero Energy raises output target Add to ...

Vero Energy Inc. has raised its 2012 production guidance based on the success of its drilling activity in the first quarter.

The Calgary-based oil and gas producer said Tuesday it now expects to produce the equivalent of between 2,500 and 2,700 barrels per day on average this year, up 200 barrels per day from the previous estimate.

By the end of 2012, Vero expects its production to reach between 3,000 and 3,300 oil-equivalent barrels per day, about 70 per cent oil and liquids.

Vero says the increase will be achieved without raising its 2012 capital budget of $62.5 million.

However, CIBC has agreed to increase Vero's credit facility to $65 million from $45 million based on the success of the company's first-quarter drilling program.

Vero reported that it drilled eight horizontal wells during the first three months of 2012 and had 100 per cent drilling success with them.

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