- Increased the weighting of crude oil and NGL reserves to 53% over the reserve base, from 39% in 2017.
- Proved Developed Producing reserves represent 81% of Proved Reserves.
- Proved reserves represent 78% of Proved plus Probable Reserves.
- Net Asset Value (NAV) per share on a Proved basis is $0.69 /share and $2.95 /share on a Proved plus Probable basis.
Note: NAV is calculated using reserve values discounted at 10% and reduced by estimated net debt at December 31, 2018
The reserves data set forth below is based upon independent reserve assessments and evaluations prepared by:
- Sproule Associates Limited (“Sproule”) dated February 26, 2019 with an effective date of December 31, 2018; and
- McDaniel and Associates Consultants Ltd. (“McDaniel”) dated February 26, 2019 with an effective date of December 31, 2018
(together referred to as the “Reserve Reports”).
The following tables summarize the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income taxes of future net revenue for the Corporation’s reserves using forecast prices and costs based on the Reserve Reports. The Reserve Reports have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101).
All evaluations and reviews of future net revenues are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of our crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein for the fiscal year ended 2018.
Proved reserves comprised 78% of the Corporation’s total proved plus probable reserves at December 31, 2018. The Corporation had 349 Mboe of proved undeveloped reserves at December 31, 2018, representing 5.8% of total proved and probable reserves and 7.8% of total proved reserves.
The Future Development Capital contained in the Reserve Reports (undiscounted) is $10.2 million for the proved and probable reserves and $7.8 million for total proved reserves.
The following tables provide summary reserve information from the Reserve Reports which were prepared using Sproule’s forecasts at December 31, 2018.
|Light and Medium Crude Oil||Conventional Natural Gas||NGL||Total Oil Equivalent|
|Total Proved plus Probable||2,854||2,591||16,763||15,496||364||274||6,012||5,447|
(1)“Net” reserves means the Corporation’s working interest (operated and non-operated) share afterdeduction of royalty obligations, andincludingthe Corporation’s royalty interest in reserves.
(2)Rounding may affect totals within tables.
(3)Due to effects of rounding, certain totals may not be consistent from one table to the next.
The estimated net present values before income taxes of future net revenues associated with the Corporation’s reserves effective December 31, 2018 and based on the published future price forecasts are summarized in the following table:
|Reserve Values ($’000s)|
|Total Proved and Probable||120,735||91,945||73,312||60,496||51,249|
(1)The estimated future net revenues are stated after deducting future estimated site restoration costs and are reduced for estimated future abandonment costs and estimated capital for future development associated with the reserves.
(2)The net present value of future revenues does not represent fair market value.
Barrel of oil equivalents or BOEs 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. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio of 6 Mcf: 1 bbl may be a misleading indication of value.
Oil and Gas Advisory
The reserves information contained in this news release have been prepared in accordance with NI 51-101. Complete NI 51-101 reserves disclosure will be included in our Annual Information Form for the year ended December 31, 2018. Listed below are cautionary statements applicable to our reserves information that are specifically required by NI 51-101:
Individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation.
With respect to finding and development costs, 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.
This press release contains estimates of the net present value of our future net revenue from our reserves. Such amounts do not represent the fair market value of our reserves.
Reserves included herein are stated on a company interest basis (before royalty burdens and including royalty interests) unless noted otherwise as well as on a gross and net basis as defined in NI 51-101. “Company interest” is not a term defined by NI 51-101 and as such the estimates of Company interest reserves herein may not be comparable to estimates of “gross” reserves prepared in accordance with NI 51-101 or to other issuers’ estimates of company interest reserves.
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as “appear”, “seek”, “anticipate”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions.
More particularly and without limitation, this news release contains forward‐looking statements and information concerning the Corporation’s petroleum and natural gas production and reserves. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Corporation, including expectations and assumptions concerning well production rates and reserve volumes; project development and overall business strategy. Although management of the Corporation believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Corporation relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Toronto Stock Exchange (“TSX”). The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
About Toscana Energy Income Corporation
Toscana Energy Income Corporation is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets including royalties, non-operated working interests and unitized production for yield and capital appreciation.
For further information, please contact:
Joseph S. Durante, Chief Executive Officer
Tel: (403) 410-6793
Fax: (403) 444-0090
SOURCE: Toscana Energy Income Corporation