Bengal Energy Reports Significant Increases in Year End Fiscal 2014
Reserves and Value
Before Tax Proved plus Probable Reserves Value Equates to More
Than Double the Company's Current Enterprise Value
CALGARY, ALBERTA--(Marketwired - May 20, 2014) - Bengal Energy
Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
significant increases in the net present value and volume of its
reserves following the completion of its fiscal 2014 year-end
independent reserves report (the "Report"). The Report is the
result of an independent evaluation of the Company's producing oil
and gas properties by GLJ Petroleum Consultants Ltd. ("GLJ") of
Calgary, Alberta effective March 31, 2014. The Company's reserves
were evaluated by GLJ in compliance with National Instrument 51-101
- Standards of Disclosure for Oil and Gas Activities ("NI
51-101") and in accordance with the Canadian Oil and Gas Evaluation
("COGE") Handbook.
Reserves Highlights Include:
- A 149% increase in the value(1) of Bengal's working interest
("WI") proved plus probable ("2P") reserves at fiscal year-end 2014
to approximately $101 million, compared to $41 million at year end
2013. This 2014 2P value compares to the Company's enterprise value
of $39.3 million(2) as at May 15, 2014;
- Total proved ("1P") WI reserves of 1.7 MMBOE at March 31, 2014
has increased by 122% and is equivalent to the prior years' total
2P reserves;
- 2P WI reserves of 3.8 MMBOE at March 31, 2014 is a 122%
increase over the prior year's 2P reserves of 1.7 MMBOE; and
- Based on 1P and 2P reserve additions, respectively, the Company
replaced approximately 6.4 times and 13.2 times its annual
production for the year ended March 31, 2014.
(1) |
The
Company Interest reserve values are based on pre-tax net present
value using GLJ's April 1, 2014 forecast pricing, discounted at
10%. |
|
|
(2) |
Enterprise value is calculated as market cap plus total debt less
cash, and is based on a closing price of $0.55 per share on May 16,
2014, and $8.75 million in total debt outstanding. |
The significant and continuing growth in Bengal's reserve base
is a direct result of the drilling and development activities
undertaken in the Company's Cuisinier Field, and demonstrates the
inherent value of this large, ultralight oil weighted asset base.
In addition, due to the report date of March 31, 2014, the reserves
attributed to the Company do not include the results from the four
successful wells drilled to date in the 2014 Phase One Cuisinier
drilling program, any production and reserves impact of which will
be realized later in calendar 2014 and be reflected in a subsequent
reserves report.
"In light of the tremendous growth and value increase that we
have announced today, Bengal is very well positioned to continue
growing our production, cash flow and reserves for the benefit of
our shareholders," said Chayan Chakrabarty, Bengal's President and
CEO. "Having much higher reserve volumes and values also affords us
greater flexibility to responsibly expand our borrowing base, and
underpin the continued development of these unique, world-class
assets. We look forward to keeping shareholders updated on our
continuing progress and success, and thank them for their ongoing
support."
Reserves Summary:
The following tables provide a summary of Bengal's petroleum and
natural gas reserves as evaluated by GLJ effective March 31, 2014
in the Report using GLJ's forecast prices, costs and foreign
exchange rates as at March 31, 2014. It is important to note that
the recovery and reserves estimates provided herein are estimates
only. Actual reserves may be greater or less than the estimates
provided herein.
Total Corporate Reserves Summary (Australia + Canada):
|
LIGHT AND MEDIUM OIL |
NATURAL GAS |
NATURAL GAS LIQUIDS |
TOTAL |
Reserves Category |
Gross (Mbbl) |
Net (Mbbl) |
Gross (MMcf) |
Net (MMcf) |
Gross (Mbbl) |
Net (Mbbl) |
Gross (MBOE) |
Net (MBOE) |
Proved Developed |
|
|
|
|
|
|
|
|
|
Producing |
444 |
411 |
336 |
271 |
4 |
2 |
504 |
458 |
|
Non-Producing |
14 |
13 |
- |
- |
- |
- |
14 |
13 |
Proved Undeveloped |
1,158 |
1,068 |
- |
- |
- |
- |
1,158 |
1,068 |
Total Proved |
1,616 |
1,492 |
336 |
271 |
4 |
2 |
1,676 |
1,539 |
Probable |
2,007 |
1,852 |
530 |
419 |
6 |
4 |
2,102 |
1,926 |
Total Proved Plus Probable |
3,624 |
3,344 |
867 |
690 |
10 |
6 |
3,778 |
3,465 |
Notes: |
(1) |
Estimates of reserves of natural gas include associated and
non-associated gas. |
(2) |
"Gross Reserves" are Company's working interest reserves (operating
and non-operating) before the deduction of royalties and without
including any royalty interest of the Company. |
(3) |
"Net
Reserves" are Company's working interest reserves (operating and
non-operating) after deductions of royalty obligations plus the
Company's royalty interests. |
(4) |
The
numbers in this table may not add exactly due to rounding. |
Total Corporate Net Present Value of Future Net Revenue:
|
Before Tax Net Present Value Discounted at 10% |
After Tax Net Present Value Discounted at 10% |
|
figures in M$ except % |
March 31, 2014 |
March 31, 2013 |
% Change |
|
March 31, 2014 |
March 31, 2013 |
% Change |
|
Proved Developed Producing |
24,067 |
8,268 |
191 |
|
23,781 |
8,268 |
188 |
|
Non-Producing |
678 |
2,822 |
(76 |
) |
576 |
2,822 |
(80 |
) |
Proved Undeveloped |
20,784 |
6,947 |
199 |
|
14,530 |
6,947 |
109 |
|
Total
Proved |
45,529 |
18,036 |
152 |
|
38,887 |
18,036 |
116 |
|
Probable |
55,586 |
22,589 |
146 |
|
39,443 |
17,211 |
129 |
|
Total Proved Plus Probable |
101,115 |
40,625 |
149 |
|
78,330 |
35,247 |
122 |
|
|
|
|
|
|
|
|
|
|
Pricing Assumptions - Forecast Prices and Costs:
The following are select crude oil pricing, exchange rate and
inflation rate assumptions used by GLJ as of March 31, 2014 in
estimating the reserves data in the Report using forecast prices
and costs. For the year-ended March 31, 2014, Bengal's average
realized sales prices for crude oil was US$ 113.71/bbl (CAD
$125.30/bbl).
Year |
ICE Brent Near Month Futures Contract Crude Oil North
Sea Current USD/bbl |
NYMEX WTI Near Month Futures Contract Crude Oil at
Cushing Oklahoma |
Light Sweet Crude Oil (40 API, 0.3%S) Edmonton Current
CAD/bbl |
Inflation % |
Exchange Rate USD/CAD |
2014 $USD/bbl |
Current USD/bbl |
2014
FY |
107.54 |
97.79 |
97.79 |
102.04 |
1.8 |
0.9016 |
2014
2H |
107.50 |
97.50 |
97.50 |
102.78 |
2.0 |
0.9000 |
2015 |
107.50 |
95.59 |
97.50 |
102.78 |
2.0 |
0.9000 |
2016 |
105.00 |
93.71 |
97.50 |
105.56 |
2.0 |
0.9000 |
2017 |
102.50 |
91.88 |
97.50 |
105.56 |
2.0 |
0.9000 |
2018 |
102.50 |
90.07 |
97.50 |
105.56 |
2.0 |
0.9000 |
2019 |
102.50 |
88.31 |
97.50 |
105.56 |
2.0 |
0.9000 |
2020 |
102.50 |
87.50 |
98.54 |
106.37 |
2.0 |
0.9000 |
2021 |
103.38 |
87.50 |
100.51 |
108.49 |
2.0 |
0.9000 |
2022 |
105.45 |
87.50 |
102.52 |
110.66 |
2.0 |
0.9000 |
2023 |
107.56 |
87.50 |
104.57 |
112.87 |
2.0 |
0.9000 |
2024+ |
+2.0%/yr |
87.50 |
+2.0%/yr |
+2.0%/yr |
2.0 |
0.9000 |
Reserves Committee:
The Company's Board of Directors has a Reserves Committee,
comprising entirely of independent board members, which reviews the
qualifications and appointment of the independent reserve
evaluators and the procedures for providing information to the
evaluators. All booked reserves are based upon annual evaluations
by the independent qualified reserve evaluators in accordance with
the COGE Handbook. The evaluations are conducted from the
fundamental geological and engineering data. Both the Reserves
Committee, chaired by Mr. Peter Gaffney, as well as the full Board
of Directors have reviewed the reserves information and approved
the reserves report.
About Bengal:
Bengal Energy Ltd. (TSX:BNG) is an international oil and gas
exploration and production company with producing and prospective
light oil‐weighted assets in Australia and India. Bengal offers
exposure to lower risk, current production and cash flow, combined
with longer‐term high, potential impact exploration projects. The
Company's strategy is to achieve per share growth in cash flow,
production and reserves while establishing an attractive portfolio
of future drilling and exploration opportunities. Additional
information is available on our website at www.bengalenergy.ca.
Forward-Looking Statements
This news release contains certain forward-looking
statements or information ("forward-looking statements") as defined
by applicable securities laws that involve substantial known and
unknown risks and uncertainties, many of which are beyond Bengal's
control. These statements relate to future events or our future
performance. All statements other than statements of historical
fact may be forward looking statements. The use of any of the words
"plan", "expect", "prospective", "project", "intend", "believe",
"should", "anticipate", "estimate", or other similar words or
statements that certain events "may" or "will" occur are intended
to identify forward-looking statements. The projections, estimates
and beliefs contained in such forward looking statements are based
on management's estimates, opinions, and assumptions at the time
the statements were made, including assumptions relating to: the
size and volumes of the Company's reserves; the impact of economic
conditions in North America, Australia, India and globally;
industry conditions; changes in laws and regulations including,
without limitation, the adoption of new environmental laws and
regulations and changes in how they are interpreted and enforced;
increased competition; the availability of qualified operating or
management personnel; fluctuations in commodity prices, foreign
exchange or interest rates; stock market volatility and
fluctuations in market valuations of companies with respect to
announced transactions and the final valuations thereof; results of
exploration and testing activities; field production rates and
decline rates; the ability to replace and expand oil and natural
gas reserves through acquisitions, development or exploration; and
the ability to obtain required approvals and extensions from
regulatory authorities. We believe the expectations reflected in
those forward-looking statements are reasonable but, no assurances
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 Bengal will derive from them. As
such, undue reliance should not be placed on forward-looking
statements. The recovery and reserve estimates of Bengal's reserves
provided herein are estimates only and there is no guarantee that
the estimated reserves will be recovered.
The forward-looking statements contained herein are subject
to numerous known and unknown risks and uncertainties that may
cause Bengal's actual financial results, performance or achievement
in future periods to differ materially from those expressed in, or
implied by, these forward-looking statements, including but not
limited to, risks associated with: risks associated with oil and
gas exploration, development, exploitation, production, marketing
and transportation; capital expenditure costs; the failure to
obtain required regulatory approvals or extensions; failure to
satisfy the conditions under farm-in and joint venture agreements;
failure to secure required equipment and personnel; changes in
general global economic conditions including, without limitations,
the economic conditions in North America, Australia, India;
increased competition; the availability of qualified operating or
management personnel; fluctuations in commodity prices, foreign
exchange or interest rates; changes in laws and regulations
including, without limitation, the adoption of new environmental
and tax laws and regulations and changes in how they are
interpreted and enforced; the results of exploration and
development drilling and related activities; the ability to access
sufficient capital from internal and external sources; and stock
market volatility. Readers are encouraged to review the material
risks discussed in Bengal's Annual Information Form under the
heading "Risk Factors" and in Bengal's annual MD&A under the
heading "Risk Factors". The Company cautions that the foregoing
list of assumptions, risks and uncertainties is not exhaustive. The
forward-looking statements contained in this news release speak
only as of the date hereof and Bengal does not assume any
obligation to publicly update or revise them to reflect new events
or circumstances, except as may be require pursuant to applicable
securities laws.
Barrels of Oil Equivalent
When converting natural gas to equivalent barrels of oil,
Bengal uses the widely recognized standard of 6 thousand cubic feet
(mcf) to one barrel of oil (boe). However, a boe 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 that the value ratio based on
the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
Internal estimates
Certain information contained herein are based on estimated
values the Company believes to be reasonable and are subject to the
same limitations as discussed under "Forward-looking Statements"
above.
Oil and Gas Advisory
The reserves information contained in this press release has
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 March 31, 2014 which is expected to be filed in
late June 2014. 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.
- This news 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.
Certain Defined Terms
Bbl -
barrel Bbl/d - barrels per day Boe - barrels of oil equivalent
Boe/d - barrels of oil equivalent per day Mbbl - million barrels
MBOE - million barrels of oil equivalent |
Mcf -
thousand cubic feet Mcf/d - thousand cubic feet per day MMbbl -
million barrels MMBOE - 1 million barrels of oil equivalent MMcf -
million cubic feet |
Bengal Energy Ltd.Chayan ChakrabartyPresident & Chief
Executive Officer(403) 205-2526Bengal Energy Ltd.Jerrad
BlanchardChief Financial Officer(403)
205-2526investor.relations@bengalenergy.cawww.bengalenergy.ca
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