Bonterra Energy Corp. (Bonterra or the Company) (www.bonterraenergy.com)
(TSX:BNE) is pleased to provide an operational update including 2013 highlights
and its ongoing Cardium development program as well as the results of its
independent reserve report prepared by Sproule Associates Limited with an
effective date of December 31, 2013.
Operational Highlights
-- Record average daily production for the full year of 12,190 barrels of
oil equivalent (BOE) per day (70.0 percent oil and liquids), an increase
of 81.9 percent over the same period in 2012.
-- Record average daily production of 12,456 BOE per day in the fourth
quarter, an increase of 62.5 percent when compared to the fourth quarter
of 2012.
-- Production per fully diluted share increased 18.5 percent to 0.147 BOE
per share from 0.124 BOE per share from the prior year.
-- The Board of Directors has approved a 2014 capital development program
of $120.0 million which mainly targets light oil prospects In the
Pembina Cardium Field, most notably focused on development in its
Carnwood area holdings.
-- Currently 56 gross (41.05 net) wells are planned for 2014. Bonterra
intends to spend approximately $72 million of its capital budget in the
Carnwood area, drilling 26 gross (25.5 net) wells and completing 30
wells (includes four wells which were drilled in 2013). In addition,
Bonterra has allocated approximately $13.4 million for infrastructure
optimizations and secondary recovery pilot projects.
-- The first Carnwood unit four well pad's (16-12-48-6) first full month of
production averaged 191 BOE per day per well. The second four well pad
(14-12-48-6) has just been placed on production, with the third four
well pad (09-02-48-6) to be placed on production by the end of February
2014.
-- Bonterra's full year production levels in 2014 are expected to average
between 12,400 and 12,700 BOE per day (72 percent oil and liquids).
-- Bonterra continues to pursue technological enhancements (including
longer horizontal lengths, increased frac densities, limited entry frac
design and a potential transition to cemented completions) in order to
reduce average well costs and improve recoveries.
The Company has not released its audited 2013 financial results therefore the
numbers provided are currently estimates and unaudited.
Corporate Reserves Information
Bonterra engaged the services of Sproule Associates Limited to prepare a reserve
evaluation with an effective date of December 31, 2013. The gross reserve
figures from the following tables represent Bonterra's ownership interest before
royalties and before consideration of the Company's royalty interests. Tables
may not add due to rounding.
Reserve Report Highlights
-- Increased proved plus probable reserves by 66.5 percent to 75.0 mmboe
(74 percent oil and liquids) and proved reserves by 63.3 percent to 54.1
mmboe (74 percent oil and liquids).
-- Total proved reserves represent 72.1 percent of total proved plus
probable reserves.
-- Reserves per fully diluted share (P+P) increased 8.3 percent to 2.47 BOE
per share compared to 2.28 BOE per share from the prior year.
-- Reserve life index of 16.9 years on P+P basis, 11.8 years on a proved
basis, and 6.9 years on a PDP basis (based on 2013 average production
rate of 12,190 BOE per day) continues to remain above industry average.
-- 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, 2013
Light and Natural Gas
Medium Oil Natural Gas Liquids BOE(1)
Reserve Category: (Mbbl) (MMcf) (Mbbl) (MBOE)
----------------------------------------------------------------------------
PROVED
Developed Producing 20,015 51,518 1,905 30,506
Developed Non-Producing 457 1,180 39 692
Undeveloped 16,655 30,372 1,180 22,897
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TOTAL PROVED 37,127 83,070 3,124 54,096
PROBABLE 14,174 33,120 1,191 20,885
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TOTAL PROVED PLUS PROBABLE 51,301 116,190 4,315 74,981
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Reconciliation of Company Gross Reserves by Principal Product
Type as of December 31, 2013
Light and Medium
Oil and Natural
Gas Liquids Natural Gas BOE(1)
----------------------------------------------------------------------------
Proved Proved Proved
plus plus Plus
Proved Probable Proved Probable Proved Probable
(Mbbl) (Mbbl) (MMcf) (MMcf) (MBOE) (MBOE)
----------------------------------------------------------------------------
December 31,
2012 24,925 33,662 49,258 68,221 33,134 45,032
Extension 826 1,207 1,839 2,727 1,133 1,662
Infills 3,155 4,115 5,140 6,658 4,012 5,225
Improved
Recovery 0 0 0 0 0 0
Technical
Revisions (423) (1,482) 12,832 15,563 1,716 1,112
Discoveries 0 0 0 0 0 0
Acquisitions 14,751 21,077 22,116 31,115 18,437 26,263
Dispositions 0 0 0 0 0 0
Economic
factors 131 150 (102) (82) 114 136
Production (3,114) (3,114) (8,013) (8,013) (4,449) (4,449)
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December 31,
2013 40,251 55,616 83,070 116,190 54,096 74,981
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Summary of Net Present Values of Future Net Revenue as of December 31, 2013
Net Present Value Before Income Taxes
Discounted at (% per Year)
($ Millions) 0% 5% 10%
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Reserve Category:
----------------------------------------------------------------------------
PROVED
Developed Producing 1,390,356 931,047 711,393
Developed Non-Producing 32,856 25,609 21,496
Undeveloped 897,711 487,517 288,092
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TOTAL PROVED 2,320,923 1,444,173 1,020,981
PROBABLE 1,203,225 485,064 249,468
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TOTAL PROVED PLUS PROBABLE 3,524,148 1,929,237 1,270,449
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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:
2013 FD&A 2012 FD&A 2011 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 $ 23.63 $ 13.64 $ 33.22 $ 22.01
Proved plus
Probable Reserve
Net Additions $ 20.12 $ 16.05 $ 15.38 $ 19.11
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Over three years, Bonterra has incurred the following FD&A(3) costs including
Future Development Costs:
2013 FD&A 2012 FD&A 2011 FD&A
Costs per Costs per Costs per Three Year
BOE(1)(2)(3) BOE(1)(2)(3) BOE(1)(2)(3) Average(5)
----------------------------------------------------------------------------
Proved Reserve
Net Additions $ 24.80 $ 20.91 $ 57.53 $ 23.26
Proved plus
Probable Reserve
Net Additions $ 21.06 $ 21.62 $ 35.40 $ 20.22
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Finding and Development (F&D) Costs
Over three years, Bonterra has incurred the following F&D(3) costs excluding
Future Development Costs:
2013 F&D 2012 F&D 2011 F&D
Costs per Costs per Costs per Three Year
BOE(1)(2)(3) BOE(1)(2)(3) BOE(1)(2)(3) Average(4)
----------------------------------------------------------------------------
Proved Reserve
Net Additions $ 17.10 $ 13.56 $ 33.06 $ 17.64
Proved plus
Probable Reserve
Net Additions $ 13.41 $ 18.79 $ 15.31 $ 15.24
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Over three years, Bonterra has incurred the following F&D (3) costs including
Future Development Costs:
2013 F&D 2012 F&D 2011 F&D
Costs per Costs per Costs per Three Year
BOE(1)(2)(3) BOE(1)(2)(3) BOE(1)(2)(3) Average(5)
----------------------------------------------------------------------------
Proved Reserve
Net Additions $ 21.38 $ 22.26 $ 57.37 $ 20.51
Proved plus
Probable Reserve
Net Additions $ 17.04 $ 26.61 $ 35.33 $ 18.09
----------------------------------------------------------------------------
(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 Proved plus Probable basis.
(5) Three year average is calculated using three year total capital costs
and reserves additions on both a Proved and Proved plus Probable basis
plus the average change in future capital costs over the three year
period.
Certain financial and operating information, such as production information,
finding and development costs and net asset values, included in this press
release for the quarter and year ended December 31, 2013 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, 2013 and changes could be material. All reserve numbers
provided above are Bonterra'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.
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.
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 D. 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
www.bonterraenergy.com
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