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CALGARY, ALBERTA--(Marketwired - Feb. 11, 2016) - Bonterra Energy Corp. (www.bonterraenergy.com) (TSX:BNE) ("Bonterra" or "the Company") is pleased to provide the summary results of its independent reserve report (the "Sproule Report") prepared by Sproule Associates Limited ("Sproule") with an effective date of December 31, 2015.
Corporate Reserves Information
The following summarizes certain information contained in the Sproule Report. The Sproule Report was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR on or by March 18, 2016.
Reserve Report Highlights
- Increased proved plus probable (P+P) reserves by 13 percent to 90.6 mmboe (73 percent oil and liquids) and total proved reserves by 13 percent to 70.7 mmboe (74 percent oil and liquids).
- Increased proved reserves by 7.9 mmboe which replaced production by 272 percent.
- Total proved reserves represent 78 percent of total P+P reserves.
- Finding Development and Acquisition (FD&A) costs including the change in future development capital (FDC) are $11.60 per BOE on a P+P basis and $11.52 per BOE on a total proved basis, which results in a recycle ratio of 2.4 times and 2.4 times, respectively.
- Finding and Development (F&D) costs including the change in FDC are $3.12 per BOE on a P+P basis and $4.76 per BOE on a total proved basis, which results in a recycle ratio of 8.9 times and 5.9 times, respectively.
- Reserves per fully diluted share (P+P) increased to 2.78 per share compared to 2.50 per share from the prior year, an increase of 11 percent.
- Reserve life index of approximately 20 years on a P+P basis, 16 years on a total proved basis, and 8 years on a proved developed producing (PDP) basis (based on 2015 average production rate of 12,656 BOE per day).
- Booked reserves represent approximately 30 percent of Bonterra's current potential inventory of undrilled locations.
Summary of Gross Oil and Gas Reserves as of December 31, 2015
| |
Light and
Medium
Oil |
Solution
Gas |
Natural
Gas |
Natural
Gas
Liquids |
Oil
equivalent(4) |
Future
Development
Capital |
| |
(MBbl) |
(MMcf) |
(MMcf) |
(MBbl) |
(MBoe) |
(000s) |
| Proved |
|
|
|
|
|
|
|
| |
Developed Producing |
26,276 |
52,194 |
5,706 |
2,693 |
38,619 |
$ |
- |
| |
Developed Non-producing |
1,293 |
2,038 |
5,647 |
239 |
2,813 |
$ |
2,219 |
| |
Undeveloped |
19,467 |
36,922 |
8,665 |
2,186 |
29,251 |
$ |
495,571 |
| Total proved |
47,036 |
91,155 |
20,017 |
5,118 |
70,683 |
$ |
497,792 |
| Probable |
12,522 |
24,455 |
10,502 |
1,590 |
19,938 |
$ |
20,753 |
| Total P+P(1) (2) (3) |
59,588 |
115,609 |
30,519 |
6,708 |
90,621 |
$ |
518,544 |
Notes:
| (1) |
Reserves have been presented on gross basis which are the Company's total working interest share before the deduction of any royalties and without including any royalty interests of the Company. |
| (2) |
Totals may not add due to rounding. |
| (3) |
Based on Sproule's December 31, 2015 escalated price deck. |
| (4) |
Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. |
Reconciliation of Company Gross Reserves by Principal Product Type as of
December 31, 2015 (1)(2)
| |
Light &
Medium Oil |
|
Associated & Non-Associated Gas |
|
Natural Gas
Liquids |
|
Oil Equivalent |
|
| |
Proved |
|
Proved +
Probable |
|
Proved |
|
Proved +
Probable |
|
Proved |
|
Proved +
Probable |
|
Proved |
|
Proved +
Probable |
|
| |
(MBbl) |
|
(MBbl) |
|
(MMcf) |
|
(MMcf) |
|
(MBbl) |
|
(MBbl) |
|
(MBoe) |
|
(MBoe) |
|
| Opening Balance, December 31, 2014 |
40,529 |
|
51,719 |
|
108,128 |
|
138,887 |
|
4,245 |
|
5,381 |
|
62,795 |
|
80,248 |
|
| Extensions & Improved Recovery(2) |
1,480 |
|
1,864 |
|
3,171 |
|
4,012 |
|
123 |
|
156 |
|
2,132 |
|
2,688 |
|
| Technical Revisions |
215 |
|
(1,366 |
) |
3,989 |
|
1,341 |
|
640 |
|
763 |
|
1,520 |
|
(379 |
) |
| Discoveries |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
| Acquisitions |
8,665 |
|
11,186 |
|
9,077 |
|
11,988 |
|
565 |
|
749 |
|
10,743 |
|
13,934 |
|
| Dispositions(4) |
(119 |
) |
(150 |
) |
(176 |
) |
(220 |
) |
(6 |
) |
(8 |
) |
(154 |
) |
(194 |
) |
| Economic Factors |
(592 |
) |
(553 |
) |
(5,870 |
) |
(2,733 |
) |
(182 |
) |
(68 |
) |
(1,752 |
) |
(1,077 |
) |
| Production |
(3,142 |
) |
(3,142 |
) |
(7,146 |
) |
(7,146 |
) |
(266 |
) |
(266 |
) |
(4,599 |
) |
(4,599 |
) |
| Closing Balance, December 31, 2015 |
47,036 |
|
59,558 |
|
111,172 |
|
146,128 |
|
5,118 |
|
6,708 |
|
70,684 |
|
90,621 |
|
Notes:
| (1) |
Gross Reserves means the Company's working interest reserves before calculation of royalties, and before consideration of the Company's royalty interests. |
| (2) |
Increases to Extensions & Improved Recovery include infill drilling and are the result of step-out locations drilled by Bonterra and other operators on and near Company-owned lands. |
| (3) |
Totals may not add due to rounding. |
| (4) |
Includes volumes associated with Farm outs. |
Summary of Net Present Values of Future Net Revenue as of December 31, 2015
| ($M) |
Net Present Value Before Income Taxes Discounted at (% per Year) |
| Reserves Category: |
0% |
5% |
10% |
15% |
| Proved |
|
|
|
|
| |
Producing |
1,444,628 |
960,825 |
713,773 |
567,804 |
| |
Non-producing |
64,757 |
45,010 |
33,355 |
25,984 |
| |
Undeveloped |
815,905 |
472,671 |
295,647 |
192,317 |
| Total proved |
2,325,289 |
1,478,506 |
1,042,775 |
786,105 |
| Probable |
921,885 |
487,963 |
321,798 |
238,564 |
| Total proved plus probable(1)(2)(3) |
3,247,175 |
1,966,469 |
1,364,573 |
1,024,669 |
Notes:
| (1) |
Evaluated by Sproule as at December 31, 2015. Net present value of future net revenue does not represent fair value of the reserves. |
| (2) |
Net present values equals net present value before income taxes based on Sproule's forecast prices and costs as of December 31, 2015. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. |
| (3) |
Includes abandonment and reclamation costs as defined in NI 51-101. |
Finding, Development & Acquisition (FD&A) and Finding & Development (F&D) Costs
The Company has historically been active in its capital development program and through 2015 successfully reduced capital costs per well through a combination of efficiencies and benefitting from reductions to the overall industry cost structure. Over the past three years, Bonterra has incurred the following FD&A(3) and F&D(3) costs both excluding and including Future Development Capital:
| |
Proved Reserve Net Additions |
|
P+P Reserve Net Additions |
| |
2015 |
2014 |
2013 |
3 Yr
Avg(4) |
|
2015 |
2014 |
2013 |
3 Yr
Avg(4) |
| FD&A Costs per BOE (1)(2)(3) |
| Including FDC |
$ |
11.52 |
$ |
18.90 |
$ |
24.80 |
$ |
20.02 |
|
$ |
11.60 |
$ |
22.67 |
$ |
21.06 |
$ |
18.95 |
| Excluding FDC |
$ |
15.50 |
$ |
11.57 |
$ |
23.63 |
$ |
18.48 |
|
$ |
15.29 |
$ |
15.54 |
$ |
20.12 |
$ |
18.13 |
| |
| F&D Costs per BOE (1)(2)(3) |
| Including FDC |
$ |
4.76 |
$ |
18.89 |
$ |
21.38 |
$ |
18.57 |
|
$ |
3.12 |
$ |
22.71 |
$ |
18.63 |
$ |
19.92 |
| Excluding FDC |
$ |
33.26 |
$ |
11.53 |
$ |
17.10 |
$ |
14.99 |
|
$ |
56.32 |
$ |
15.53 |
$ |
14.66 |
$ |
17.37 |
Notes:
| (1) |
Barrels of Oil Equivalent may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. |
| (2) |
The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. |
| (3) |
FD&A and F&D costs are net of proceeds of disposal and the FD&A costs per BOE are based on reserves acquired net of reserves disposed of. |
| (4) |
Three year average is calculated using three year total capital costs and reserve additions on both a Proved and P+P reserves on a weighted average basis. |
Certain financial and operating information, such as production information, and finding and development costs included in this press release for the quarter and year ended December 31, 2015 are based on estimated unaudited financial results for the year and are subject to the same limitations as discussed under Forward Looking Statements set out below. These estimated amounts may change upon the completion of audited financial statements for the year ended December 31, 2015 and changes could be material.
Operational Highlights
Bonterra continued to realize operational success through 2015, despite a very challenging commodity price environment. In addition to completing the strategic acquisition of producing assets in the Pembina Cardium area in February, the Company was also successful adding new production volumes through its successful drilling program and innovative completions techniques across its asset base.
Offsetting the positive production additions were production curtailments which averaged 1,100 barrels of oil equivalent (BOE) per day for 2015. These curtailments were related to the combination of a prudent corporate strategy to restrict volumes because of low commodity prices combined with third party pipeline outages and a less intensive well servicing program.
As a result, Bonterra's 2015 production volumes were as follows:
- Average daily production for the full year of 12,656 BOE per day (74 percent oil and liquids), a decrease of 4 percent over the same period in 2014;
- Average daily production of 12,538 BOE per day in the fourth quarter, a decrease of 7 percent compared to the fourth quarter of 2014; and
- Production per fully diluted share decreased by 6 percent to 0.14 BOE per share from 0.15 BOE per share from the prior year, reflective of lower production volumes as well as an increase in shares due to the rights offering completed in July 2015.
The Company has not released its audited 2015 financial results, and therefore the financial figures provided herein are estimates and are unaudited.
Caution Regarding Engineering Terms:
Disclosure provided herein in respect of barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 MCF to 1 barrel has been used in all cases in this disclosure. This BOE conversion ratio is based on an energy equivalency conversion method primarily available at the burner tip and does not represent a value equivalency at the wellhead.
Forward Looking Information
Certain statements contained in this release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this release includes, but is not limited to: expected cash provided by continuing operations; cash dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
The TSX does not accept responsibility for the accuracy of this release.
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