Bonterra Energy Corp. (Bonterra) (www.bonterraenergy.com) (TSX:BNE) reports the
results of the independent reserve report prepared by Sproule Associates Limited
with an effective date of December 31, 2012 for Spartan Oil Corp.; provides a
pro forma reserves summary; updates its 2013 operating cost guidance; and
corrects its finding, development and acquisition costs excluding future
development costs for 2012.
Highlights
-- Proved plus Probable (P+P) reserves on a pro forma basis of 70.5 million
BOE with approximately 78 percent oil and liquids.
-- Approximately 74 percent of total reserves are classified as proved
reserves with 26 percent classified as probable reserves.
Corporate Reserves Information (Spartan Oil Corp. Only)
Spartan Oil Corp. (Spartan) engaged the services of Sproule Associates Limited
to prepare a reserve evaluation with an effective date of December 31, 2012. The
gross reserve figures from the following tables represent Spartan's ownership
interest before royalties and before consideration of the company's royalty
interests at December 31, 2012. Tables may not add due to rounding.
Summary of Gross Oil and Gas Reserves as of December 31, 2012
Light and Natural Natural Gas
Medium Oil Gas Liquids BOE(1)
Reserve Category: (Mbbl) (MMcf) (Mbbl) (MBOE)
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PROVED
Developed Producing 6,019.8 9,762 462.8 8,109.6
Developed Non-Producing 600.2 685 37.9 752.3
Undeveloped 8,115.4 10,005 533.2 10,316.1
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TOTAL PROVED 14,735.4 20,452 1,033.9 19,177.9
PROBABLE 4,941.0 6,411 317.9 6,327.4
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TOTAL PROVED PLUS PROBABLE 19,676.4 26,863 1,351.7 25,505.3
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Reconciliation of Company Gross Reserves by Principal Product Type as of
December 31, 2012
Light and Medium Oil and
Natural Gas Liquids Natural Gas
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Proved plus Proved plus
Proved Probable Proved Probable
(Mbbl) (Mbbl) (Mmcf) (Mmcf)
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December 31, 2011 12,838.2 18,639.4 11,822 16,750
Extension 966.2 1,628.3 740 1,214
Infill Drilling 690.0 1,110.3 390 793
Improved Recovery - - - -
Technical Revisions 2,027.0 380.1 8,515 9,109
Discoveries - - - -
Acquisitions 77.2 98.1 40 51
Dispositions - - - -
Economic factors 0.2 1.4 (1) -
Production (829.5) (829.8) (1,054) (1,054)
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December 31, 2012 15,769.3 21,028.1 20,452 26,863
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BOE(1)
--------------------------------------------------
Proved Plus
Proved Probable
(MBOE) (MBOE)
--------------------------------------------------
December 31, 2011 14,808.5 21,431.1
Extension 1,089.5 1,830.6
Infill Drilling 755.0 1,242.5
Improved Recovery - -
Technical Revisions 3,446.2 1,898.3
Discoveries - -
Acquisitions 83.9 106.6
Dispositions - -
Economic factors - 1.4
Production (1,005.2) (1,005.5)
--------------------------------------------------
December 31, 2012 19,177.9 25,505.3
--------------------------------------------------
Summary of Net Present Values of Future Net Revenue as of December 31, 2012
Net Present Value Before Income
Taxes
Discounted at (% per Year)
($ Millions) 0% 5% 10%
----------------------------------------------------------------------------
Reserve Category:
----------------------------------------------------------------------------
PROVED
Developed Producing 428,694 296,926 228,451
Developed Non-Producing 42,920 29,235 22,314
Undeveloped 437,088 236,173 138,422
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TOTAL PROVED 908,702 562,333 389,187
PROBABLE 387,226 149,581 73,082
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TOTAL PROVED PLUS PROBABLE 1,295,929 711,914 462,269
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Pro Forma Reserves (Bonterra and Spartan)
Summary of Gross Oil and Gas Reserves as of December 31, 2012
Light and Natural Natural Gas
Medium Oil Gas Liquids BOE(1)
Reserve Category: (Mbbl) (MMcf) (Mbbl) (MBOE)
----------------------------------------------------------------------------
PROVED
Developed Producing 20,435.5 42,799 1,828.5 29,397.2
Developed Non-Producing 966.5 3,314 89.7 1,608.6
Undeveloped 16,267.0 23,597 1,106.7 21,306.5
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TOTAL PROVED 37,669.0 69,710 3,024.9 52,312.2
PROBABLE 12,954.1 25,374 1,041.9 18,225.0
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TOTAL PROVED PLUS PROBABLE 50,623.1 95,084 4,066.7 70,537.2
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Summary of Net Present Values of Future Net Revenue as of December 31, 2012
Net Present Value Before
Income Taxes
Discounted at (% per
Year)
($ Millions) 0% 5% 10%
----------------------------------------------------------------------------
Reserve Category:
----------------------------------------------------------------------------
PROVED
Developed Producing 1,270,577 839,852 634,987
Developed Non-Producing 69,742 45,731 33,802
Undeveloped 830,149 427,672 234,625
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TOTAL PROVED 2,170,468 1,313,254 903,414
PROBABLE 1,001,822 385,562 191,763
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TOTAL PROVED PLUS PROBABLE 3,172,291 1,698,816 1,095,178
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Update: Bonterra 2013 Operating Cost Guidance
Bonterra closed the acquisition of Spartan in January, 2013 and announced
guidance based on the combined entity on February 5, 2013. The guidance reported
included operating costs expected to average approximately $15.00 per BOE on an
annualized basis. However, this only included Bonterra operating costs. On a
consolidated basis of Bonterra and Spartan, the operating costs for the combined
entity are expected to average $12.45 per BOE for the period commencing from the
acquisition date of January 25, 2013 to December 31, 2013.
Correction: Finding, Development and Acquisition (FD&A) Costs
The Company has historically been active in its capital development program.
Over three years, Bonterra has incurred the following FD&A (3) costs excluding
Future Development Costs:
2012
FD&A 2011 FD&A 2010 FD&A
Costs per Costs per Costs per Three Year
BOE(1)(2)(3) BOE(1)(2)(3) BOE(1)(2)(3) Average(4)
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Proved Reserve Net
Additions $ 13.64 $ 33.22 $ 13.89 $ 16.22
Proved plus Probable
Reserve Net
Additions $ 16.05 $ 15.38 $ 13.02 $ 14.79
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(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 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 Proved plus Probable basis
Certain financial and operating information, such as finding and development
costs and net asset values, included in this press release for the year ended
December 31, 2012 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, 2012 and changes
could be material. All reserve numbers provided above are Spartan's interest
before royalties.
It should not be assumed that the estimates of future net revenue presented in
the above tables represent the fair market value of the reserves. There is no
assurance that the forecast prices and costs assumptions will be attained and
variances could be material. Estimates of reserves and future net revenues for
individual properties may not reflect the same confidence level as estimates of
reserves and future net revenues for all properties due to the effects of
aggregation.
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.
Caution Regarding Forward Looking Information:
Certain information set forth in this press release, including management's
assessment of Bonterra's future plans and operations, contains forward-looking
statements. By their nature, forward-looking statements are subject to numerous
risks and uncertainties, some of which are beyond Bonterra's control, including
the impact of general economic conditions, industry conditions, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other industry participants, the lack of
availability of qualified personnel or management, stock market volatility and
ability to access sufficient capital from internal and external sources. Readers
are cautioned that the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on forward-looking
statements. Bonterra's actual results, performance or achievement could differ
materially from those expressed in, or implied by these forward-looking
statements, and, accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any
of them do so, what benefits that Bonterra will derive therefrom. Bonterra
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
Bonterra Energy Corp.
George F. Fink
Chairman and CEO
(403) 262-5307
(403) 265-7488 (FAX)
Bonterra Energy Corp.
Robb M. Thompson
CFO and Secretary
(403) 262-5307
(403) 265-7488 (FAX)
Bonterra Energy Corp.
Kirsten Lankester
Manager, Investor Relations
(403) 262-5307
(403) 265-7488 (FAX)
info@bonterraenergy.com
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