Toro Oil & Gas Ltd. Provides 2014 Year-End Reserves
CALGARY, ALBERTA, Mar 23, 2015 (Marketwired via COMTEX) — Toro Oil & Gas Ltd. (TOO) (“Toro” or the “Company”) is pleased to announce the results of its independent reserve evaluation by Sproule Associates Limited (“Sproule”) as of December 31, 2014. The evaluation includes the recently acquired Hamilton Lake core property in addition to the legacy assets assumed through the recapitalization of Kallisto Energy Corp (“Kallisto”) on October 1, 2014. With the recapitalization and subsequent corporate focus on light oil within the Alberta Viking fairway, comparisons to the prior year reserve report may yield inaccurate conclusions with respect to Toro’s value proposition. Hence, more meaningful emphasis should be placed on the Company’s Viking asset base.
Reserve Report Highlights – Overall Corporate
-- Total Proved ("1P") reserves up 150% to 2.0 MMboe from 0.8 MMboe and
associated 10% discounted before tax net present values ("NPV10") 1P
reserve value up 62% to $28.9 million from $17.8 million;
-- Total Proved plus Probable ("2P") reserves increased 79% to 2.5 MMboe
from 1.4 MMboe and associated NPV10 2P reserve value up 47% to $38.3
million from $26.1 million;
-- Hamilton Lake acquisition represents 73% of Toro's corporate
consolidated reserves by volume and 79% of overall NPV10;
-- Hamilton Lake acquisition: 2P reserves increased 49% to 1.8 MMboe with
NPV10 values doubling to $30.2 million from $15.2 million in the prior
year as prepared by McDaniel and Associates for the prior owner of the
Hamilton Lake assets. 1P reserves comprise $23.2 million of the 2014
year- end total;
-- 1P reserves include eight Proven Undeveloped ("PUD") locations across
the entire Hamilton Lake acreage leaving significant potential to add to
the overall 1P reserves upon future development
2014 Year End Reserve Summary
The summary below sets forth Toro’s gross working interest reserves as at December 31, 2014, as evaluated in an independent report prepared by Sproule dated March 16, 2015 (the “Sproule Report”). The reserves and reporting was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and in National Instrument 51-101 Standards for Disclosure of Oil and Gas Activities (“NI 51-101”).
Summary of Gross Oil and Gas Reserves (1),(2),(3)
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----- Natural Gas
(Associated, Barrels of
Light and non-associated Natural Gas Oil
Medium Oil and solution) Liquids Equivalent
(Mbbl) (MMcf) (Mbbl) (Mboe)
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Proved
Developed
Producing 555 2,595 14 1,002
Developed Non-
Producing 85 189 1 118
Undeveloped 673 1,068 8 859
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Total Proved 1,314 3,852 22 1,978
Probable 331 958 5 496
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Total Proved plus
Probable 1,645 4,810 28 2,474
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Summary of Net Present Values of Future Net Revenues Before Income Taxes Discounted at (%/yr)
(M$) (1),(2),(3)
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-----
0% 5% 10% 15% 20%
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Proved
Developed Producing 27,670 21,190 17,255 14,619 12,733
Developed Non-Producing 3,380 2,656 2,180 1,841 1,584
Undeveloped 24,551 15,005 9,473 6,003 3,692
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Total Proved 55,601 38,851 28,908 22,464 18,009
Probable 21,240 13,210 9,348 7,141 5,727
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Total Proved plus Probable 76,841 52,061 38,256 29,604 23,736
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Notes:
1. The tables summarize the data contained in the Sproule Report and as a
result may contain slightly different numbers due to rounding
2. Gross reserves means the total working interest (operated or non-
operated) share of remaining recoverable reserves owned by Toro before
deductions of royalties payable to others
3. Based on Sproule December 31, 2014 forecast prices
Future development capital associated with the reserves is $16.8 million undiscounted, $4.9 million of which is expected to be incurred in 2015 with the balance expected in 2016. The Sproule Report represents Toro’s inaugural reserve report. In light of the current market cycle and deferral of drilling, Toro believes that there will be substantial ability to appreciably grow the Company’s reserve base as it actively develops its Viking assets to create shareholder value.
About Toro Oil & Gas Ltd.
Toro is a junior oil and gas energy company listed on the TSX Venture Exchange. Toro’s business plan focuses on light oil development and exploitation of known or existing reservoirs through the use of improvements in drilling and completion technology. The Company controls 122 net sections of land in the prolific Viking light oil fairway. The Company intends to add to this core area while adding other light oil core areas in the western Canadian sedimentary basin to its portfolio as opportunities arise.
Abbreviations bbls barrels bbls/d barrels per day boe barrels of oil equivalent boe/d barrels of oil equivalent per day Mboe thousands of barrels of oil equivalent MMboe millions of barrels of oil equivalent Mcf thousand cubic feet MMcf million cubic feet Mcf/d thousand cubic feet per day
Forward Looking Information
The reader is advised that some of the information contained herein may constitute forward looking information within the meaning of National Instrument 51-102 and other relevant securities legislation. Forward-looking information contained herein includes, but is not limited to, statements with respect to deferral and timing of capital expenditures, the Company’s drilling plans and Toro’s ability to grow its reserve base. Such forward-looking information is based on the Company’s current expectations regarding its future business and reflects management’s current beliefs and assumptions based on information currently available to them. Actual results may vary from forward-looking information and readers are cautioned not to place undue reliance on forward-looking information. The Company does not undertake any obligation to release publicly any revisions to forward-looking information contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Forward-looking information involves significant known and unknown risks and uncertainties. These risks and uncertainties are described in the Company’s Annual Information Form dated April 25, 2014 which is filed under the Company’s SEDAR profile at www.sedar.com.
51-101 Advisory
In conformity with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, natural gas volumes have been converted to barrels of oil equivalent (“boe”) using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. Boes may be misleading, particularly if used in isolation. A conversion ratio of one barrel to six thousand cubic feet of natural gas 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 ratio on a 6:1 basis may be misleading as an indication of value.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
