Clearview Resources Ltd. Reports March 31, 2018 Year End Reserves
CALGARY, Alberta, June 07, 2018 (GLOBE NEWSWIRE) -- Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its crude oil and natural gas reserves information for the year ended March 31, 2018.
March 31, 2018 Highlights:
Produced 2,101 barrels of oil equivalent per day (“boe/d”), a 215 percent increase from 665 boe/d for the year ended March 31, 2017.
Increased total proved and total proved plus probable oil reserves by 19 percent and 20 percent, respectively, from a successful optimization and well workover program, the acquisition of a 50% working interest in the Windfall property and an improved future development program at the Company’s Wilson Creek property.
Total proved and total proved plus probable reserve before tax value discounted at ten percent increased 13 percent and 19 percent, respectively.
Total proved plus probable natural gas reserves increased by 4 percent. Total proved natural gas reserves were negatively impacted by 23 percent because of the current forecast natural gas prices resulting in the shifting of reserves at the Company’s Northville property from the proved undeveloped reserve category to the probable reserve category.
Total proved producing reserves remained flat at approximately 5 million barrels of oil equivalent (“boe”) after having produced 766.8 thousand boe for the year ended March 31, 2018.
SUMMARY OF OIL AND NATURAL GAS RESERVES AND NET PRESENT VALUES OF FUTURE NET REVENUE AS OF MARCH 31, 2018 FORECAST PRICES AND COSTS
GLJ Petroleum Consultants Ltd. (“GLJ”), the Company’s independent petroleum engineering firm, has evaluated Clearview’s crude oil, natural gas and natural gas liquids reserves as at March 31, 2018 and prepared a reserves report (the “GLJ Report”) in accordance with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” and the “Canadian Oil and Gas Evaluation Handbook”. GLJ’s price forecast dated April 1, 2018 was used in the evaluation. Company gross reserves in the total proved and total proved plus probable categories decreased 14 percent and increased 6 percent, respectively, compared to March 31, 2017. The decrease in the total proved category was driven by the removal of gas weighted, proved undeveloped drilling locations at the Northville property. These reserves remain in the probable reserve category. This change in reserve booking category was driven primarily by the economics related to the current forecast natural gas prices. The increase in total proved plus probable reserve category was driven primarily by the Windfall property acquired January 4, 2018 (50% working interest).
The following is a summary of the Company’s gross reserves information detailed in the GLJ Report at March 31, 2018:
RESERVES
LIGHT AND MEDIUM CRUDE OIL
CONVENTIONAL NATURAL GAS (1)
NATURAL GAS LIQUIDS
OIL EQUIVALENT(2) BOE
RESERVES CATEGORY
Gross(3) (Mbbls)
Net(4) (Mbbls)
Gross (MMcf)
Net (MMcf)
Gross (Mbbls)
Net (Mbbls)
Gross (Mboe)
Net (Mboe)
PROVED:
Developed Producing
1,224
1,220
16,862
16,671
1,026
1,018
5,061
5,016
Developed Non-Producing
139
136
1,150
1,105
50
50
381
370
Undeveloped
1,325
1,319
5,233
5,208
258
258
2,455
2,445
TOTAL PROVED
2,689
2,675
23,244
22,984
1,334
1,325
7,897
7,831
PROBABLE
1,371
1,365
27,981
27,823
1,662
1,655
7,697
7,657
TOTAL PROVED PLUS PROBABLE
4,060
4,040
51,225
50,807
2,996
2,980
15,594
15,488
Notes:
(1)
Includes solution gas.
(2)
Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil (6:1).
(3)
Company Gross Reserves are the Company’s working interest share of the remaining reserves plus royalty interest reserves, before deduction of any royalties.
(4)
Company Net Reserves are the gross remaining reserves of the properties in which the Company has a working interest.
Tables may not add due to rounding.
Net Present Value of Future Net Revenue
The estimated future net revenues associated with Clearview’s reserves at March 31, 2018, based on the GLJ April 1, 2018 price forecast, are summarized in the following table. The net present value of future net revenues, discounted at ten percent, from total proved and total proved plus probable reserves increased by 13 percent and 19 percent respectively, compared to March 31, 2017. The increase in net present value was driven mostly by the oil weighted Windfall property acquisition (50% working interest) and the Wilson Creek Cardium development program being modified to optimize the drilling of two-mile horizontal wells.
NET PRESENT VALUES OF FUTURE NET REVENUE BEFORE INCOME TAXES DISCOUNTED AT (%/year)
RESERVES CATEGORY
0% ($000s)
5% ($000s)
10% ($000s)
15% ($000s)
20% ($000s)
Unit Value $/boe (1)
PROVED:
Developed Producing
67,365
54,227
44,984
38,381
33,513
8.99
Developed Non-Producing
6,290
4,860
3,860
3,144
2,616
10.43
Undeveloped
42,323
31,482
24,169
19,080
15,416
9.88
TOTAL PROVED
115,978
90,570
73,013
60,605
51,545
9.32
PROBABLE
105,055
68,350
47,112
34,019
25,433
6.15
TOTAL PROVED PLUS PROBABLE
221,033
158,919
120,125
94,624
76,978
7.76
Notes:
(1)
Unit values are before income tax discounted at 10% and based on net reserve values.
(2)
Future net revenues are estimated using forecast prices, costs arising from the anticipated development and production of reserves, associated royalties, operating costs, development costs, and abandonment and reclamation costs. The estimated values disclosed do not necessarily represent fair market value.
TOTAL FUTURE NET REVENUE
(UNDISCOUNTED)
AS OF MARCH 31, 2018
FORECAST PRICES AND COSTS
RESERVES CATEGORY
REVENUE (1) ($MMs)
ROYALTIES (2) ($MMs)
OPERATING COSTS ($MMs)
FUTURE DEVELOPMENT COSTS (“FDC”) ($MMs)
ABANDONMENT AND RECLAMATION COSTS (3) ($MMs)
FUTURE NET REVENUE BEFORE INCOME TAXES ($MMs)
Total Proved
347
41
135
49
12
306
Total Proved plus Probable
632
69
241
93
16
563
Notes:
(1)
Includes all product revenues and other revenues as forecast.
(2)
Royalties include Crown, freehold, overriding royalties, and freehold mineral taxes
SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS
FORECAST PRICES AND COSTS (1)
WTI
Edmonton Light
Bow River Medium
Ethane
Butane
Pentane
AECO Spot
Year
Inflation %
USD/CAD
USD/bbl
CAD/bbl
CAD/bbl
CAD/bbl
CAD/bbl
CAD/bbl
CAD/MMBtu
2018 Q2-Q4
0.0
0.7783
64.00
76.45
56.39
6.91
49.56
82.96
2.21
2019
2.0
0.7900
64.00
75.95
59.36
7.54
53.16
81.52
2.39
2020
2.0
0.8000
65.00
76.25
61.75
8.67
53.38
81.25
2.72
2021
2.0
0.8100
66.50
77.16
64.08
9.87
54.01
82.10
3.07
2022
2.0
0.8200
69.00
79.27
66.35
10.79
55.49
84.15
3.34
2023
2.0
0.8300
71.50
81.33
68.57
11.15
56.93
86.14
3.44
2024
2.0
0.8300
74.00
84.34
71.58
11.39
59.04
89.16
3.51
2025
2.0
0.8300
76.50
87.35
74.60
11.63
61.14
92.17
3.58
2026
2.0
0.8300
79.09
90.47
77.72
11.88
63.33
95.29
3.66
2027
2.0
0.8300
80.67
92.37
79.62
12.12
64.66
97.19
3.73
2028
2.0
0.8300
+2.0%/yr.
+2.0%/yr.
+2.0%/yr.
+2.0%/yr.
+2.0%/yr.
+2.0%/yr.
+2.0%/yr.
Notes:
(1)
GLJ escalated price forecast as at April 1, 2018
(2)
Inflation rate for costs.
(3)
Exchange rate used to generate the benchmark reference prices in this table.
Reserves Reconciliation
The following reconciliation of Clearview’s reserves compares changes in the Company’s gross reserves at March 31, 2017 to the reserves at March 31, 2018, each evaluated in accordance with National Instrument 51-101 definitions.
Oil (Mbbls)
Proved Producing
Total Proved
Total Proved + Probable
March 31, 2017
Opening Balance
1,269.8
2,247.8
3,360.8
Acquisitions
161.4
473.9
1,061.7
Technical Revisions
(83.2
)
(0.9
)
(368.1
)
Infill
31.2
113.8
145.0
Production
(159.1
)
(159.1
)
(159.1
)
March 31, 2018
Closing Balance
1,220.1
2,675.4
4,040.4
Gas (MMcf)
Proved Producing
Total Proved
Total Proved + Probable
March 31, 2017
Opening Balance
16,661.3
30,010.7
48,628.9
Acquisitions
794.7
2,672.8
6,184.7
Technical Revisions
1,731.1
(7,326.2
)
(1,715.3
)
Infill
96.6
239.6
321.1
Production
(2,612.6
)
(2,612.6
)
(2,612.6
)
March 31, 2018
Closing Balance
16,671.1
22,984.2
50,806.7
NGL’s (Mbbls)
Proved Producing
Total Proved
Total Proved + Probable
March 31, 2017
Opening Balance
1,004.3
1,885.3
3,099.4
Acquisitions
4.7
15.7
36.4
Technical Revisions
176.6
(413.6
)
3.3
Infill
4.3
9.5
12.8
Production
(172.2
)
(172.2
)
(172.2
)
March 31, 2018
Closing Balance
1,017.6
1,324.7
2,979.6
BOE’s (Mbbls)
Proved Producing
Total Proved
Total Proved + Probable
March 31, 2017
Opening Balance
5,050.9
9,134.9
14,565.0
Acquisitions
298.5
935.1
2,128.9
Technical Revisions
381.9
(1,635.6
)
(650.7
)
Infill
51.6
163.1
211.3
Production
(766.8
)
(766.8
)
(766.8
)
March 31, 2018
Closing Balance
5,016.1
7,830.7
15,487.8
Finding and Development Costs
For the year ended March 31, 2018, Clearview conducted various optimization and well workover projects on its properties. The Company also closed the purchase of a 50% working interest in the Windfall property. Finding and development costs for proved producing, total proved and proved plus probable reserves for 2018 are presented below.
Capital ($ thousands)(2)
Proved Producing
Total Proved
Total Proved plus Probable
Exploration and Development (“E&D”) costs
2,999
2,999
2,999
Change in FDC related to E&D
(17
)
(8,865
)
2,636
Total E&D Costs
2,982
(5,866
)
5,635
Acquisition and Disposition (“A&D”) costs
3,376
3,376
3,376
Change in FDC related to A&D
-
5,505
12,295
Total A&D Costs
3,376
8,881
15,671
Total Costs
6,358
3,015
21,306
Reserves (mboe)
Total Reserve Discoveries, Extensions & Revisions (3)
433.1
(1,472.5
)
(439.4
)
Total Acquisitions and Dispositions
298.5
935.1
2,128.9
Total Reserve Additions
731.6
(537.4
)
1,689.5
E&D, including change in FDC related to E&D ("F&D")
$6.88/boe
$3.98/boe
($12.82)/boe
E&D and A&D, including change in FDC ("F,D&A")
$8.69/boe
($5.61)/boe
$12.61/boe
Notes:
(1)
Tables may not add due to rounding
(2)
All the production and capital values in this table are unaudited
(3)
Includes extensions and improved recovery, technical revisions, discoveries and economic factors
(4)
F&D and F,D&A are oil and gas metrics, please see the advisory section of this press release.
The F,D&A for the total proved reserve category and the F&D for the total proved plus probable category is not meaningful as the reserve additions are negative. The total proved revision was driven primarily by the removal of gas weighted, proved undeveloped drilling locations at the Northville property. These reserves remain in the probable reserve category. This change in reserve booking is due to the economics related to the current forecast natural gas prices.
The Company’s proved producing reserve life index (“RLI”) is 7.1 years and the total proved RLI is 10.5 years. The total proved plus probable RLI is 18.3 years.
Information regarding Clearview is available on Sedar at www.sedar.com. For further information contact Tony Angelidis, President & CEO of Clearview at 587-393-8502 tony@clearviewres.com or Brian Kohlhammer, Vice President Finance & CFO at 587-393-8504 brian@clearviewres.com.
ADVISORIES
Note Regarding Forward-Looking Statements
This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company’s plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results, industry conditions, commodity prices and business opportunities. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. Statements relating to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.
The forward-looking information is based on certain key expectations and assumptions made by our management, including expectations and assumptions concerning prevailing commodity prices and differentials, exchange rates, interest rates as set out in the appendices to this press release, also applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition and the ability to market oil and natural gas successfully and our ability to access capital. Although Clearview believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Clearview can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Our actual results, performance or achievement could differ materially from those expressed in, or implied by, the 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 so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.
Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
Oil and Gas Advisories
The reserves information contained in this press release has been prepared in accordance with NI 51-101. Reserves information with in the press release is dated as of March 30, 2018 and was prepared by GLJ Petroleum Consultants.
Listed below are cautionary statements applicable to the reserves information that are specifically required by NI 51-101: (i) individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation; and (ii) this press release contains estimates of the net present value of the future net revenue from the reserves to be acquired - such amounts do not represent the fair market value of such reserves.
Boe means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe's 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. In addition, 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, using a conversion on a 6: 1 basis may be misleading as an indication of value.
This press release contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this document to provide readers with additional measures to evaluate our performance however, such measures are not reliable indicators of our future performance and future performance may not compare to our performance in previous periods and therefore such metrics should not be unduly relied upon. Specifically, this press release contains the following metrics:
Reserve Life Index – calculated as total company interest reserves divided by annual production for the year indicated.
Finding, Development and Acquisition Cost – are calculated as the sum of capital expenditures plus the change in future development capital for the period divided by the change in reserves that are characterized as development for the period. Finding, development and acquisition costs incurred in the financial year and changes during that year in estimated future development costs generally will not reflect total finding, developing and acquisitions costs related to reserves additions for that year.
