yearend reserves Arsenal Energy releases year end reserves
Monday, March 04, 2013
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Year/year proved developed producing reserves increased by 2.3%. - Oil and natural gas liquids at December 31, 2012 constitute 81% of proved plus probable reserves.
- Based on the Q4 2012 production rate of approximately 3,925 boe/day, Arsenal has a reserve life of approximately 10.4 years on a proved plus probable basis.
Arsenal Energy Inc. (TSX:AEI) (PNKSHEETS:AEYIF): AJM Deloitte has evaluated Arsenal's reserves as at December 31, 2012 in accordance with National Instrument 51-101. Detailed reserve information will be included in Arsenal's Annual Information Form for the year ended December 31, 2012 which will be filed on SEDAR at www.sedar.com on or before March 30, 2013. The summary information that follows has been derived from that evaluation.
- Year/year proved developed producing reserves increased by 2.3%
- Year/year proved plus probable reserves decreased by 5.2%. The decrease is due to a negative technical revision of recoverable reserves in the Bakken formation at Stanley and Lindahl from 550 Mboe/well to 475 Mboe/well.
- Oil and natural gas liquids at December 31, 2012 constitute 81% of proved plus probable reserves
- Arsenal's P+P PV10 net asset value is $1.27/share.
- Based on the Q4 2012 production rate of approximately 3,925 boe/day, Arsenal has a reserve life of approximately 10.4 years on a proved plus probable basis.
- Excluding technical revisions, FD&A was $20.81 per boe in 2012.
| Summary of Oil and Natural Gas Reserves as at December 31, 2012 |
| | Oil and NGL's | | Natural Gas | | Oil Equivalent | |
| | Gross (1) | | Net (2) | | Gross (1) | | Net (2) | | Gross (1) | | Net (2) | |
| Reserve Category | (Mbbl) | | (Mbbl) | | (MMcf | | (MMcf) | | (Mboe) | | (Mboe) | |
| Proved | | | | | | | | | | | | |
| | Developed producing | 4,153.4 | | 3,467.4 | | 9,137.8 | | 7,832.0 | | 5,676.4 | | 4,772.8 | |
| | Developed nonproducing | 148.3 | | 124.1 | | 895.2 | | 817.3 | | 297.4 | | 260.4 | |
| | Undeveloped | 3,457.2 | | 2,819.9 | | 1,560.6 | | 1,289.3 | | 3,717.3 | | 3,034.8 | |
| Total Proved | 7,758.9 | | 6,411.4 | | 11,593.6 | | 9,938.6 | | 9,691.1 | | 8,068.0 | |
| Probable additional | 4,225.4 | | 3,488.4 | | 5,898.1 | | 5,132.4 | | 5,208.4 | | 4,343.8 | |
| Total Proved + Probable | 11,984.3 | | 9,899.8 | | 17,491.7 | | 15,071.0 | | 14,899.5 | | 12,411.8 | |
- "Gross" reserves means Arsenal's interest before deduction of royalties
- "Net" reserves means Arsenal's interest after deduction of royalties
| Summary of Net Present Value of Future Net Revenue as of December 31, 2012 | |
| ($ Millions) | |
| | |
| | Value Before Income Tax (1) (2) | |
| | Discounted at | |
| Reserve Category | 0% | | 5% | | 10% | |
| Proved | | | | | | |
| | Developed producing | 138.1 | | 115.7 | | 101.2 | |
| | Developed nonproducing | 9.4 | | 7.7 | | 6.5 | |
| | Undeveloped | 86.2 | | 49.6 | | 27.1 | |
| Total Proved | 233.7 | | 173.0 | | 134.8 | |
| Probable additional | 211.0 | | 147.1 | | 111.1 | |
| Total Proved + Probable | 444.7 | | 320.1 | | 245.9 | |
- AJM forecast prices at December 31, 2012
- Includes future development capital of $116.5 MM$ (undiscounted)
| 2012 Reserve Reconciliation |
| | December | | Acquired / | | | | Adds / | | December |
| | 31, 2011 | | Sold | | Production | | Revisions | | 31,2012 |
| TP (Mboe) | 9,954 | | -86.0 | | -1,303 | | 1,126.1 | | 9,691.1 |
| TP value (MM$) | 166.1 | | +1.7 | | -37.5 | | 4.5 | | 134.8 |
| P+P (Mboe) | 15,721 | | -215.0 | | -1,303 | | 696.5 | | 14,899.5 |
| P+P value (MM$) | 296.4 | | +1.7 | | -37.5 | | -14.7 | | 245.9 |
Preliminary 2012 Yearend Results
Exit rate production for 2012 was approximately 4,100 boe per day with fourth quarter production averaging approximately 3,925 boe per day. Q4 2012 and full year 2012 cash flow from operations were approximately $9.0 million and $30.0 million respectively. Adjusting for one time transaction costs incurred in Q4 2012 of $1.0 million, Q4 2012 and full year 2012 cash flow would have been approximately $10.0 million and $31.0 million respectively. Capital investment in 2012 was approximately $42.7 million, before acquisitions and divestitures, and yearend 2012 bank debt is estimated at approximately $68.5 million including working capital. Arsenal anticipates releasing its audited yearend 2012 financial results on or about March 20, 2013.
As previously disclosed in its January 14, 2013 news release, Arsenal, together with its advisors, continues to analyze various alternatives by which excess cash flow from its US properties may be efficiently returned to its shareholders, which could include a corporate reorganization or other alternatives. However, there can be no assurance that any of these alternatives will be completed.
Reserves Committee
Arsenal has a reserves committee, comprised of independent board members that review the qualifications and appointment of the independent reserves evaluators. The committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon the annual evaluations by the independent qualified reserves evaluators conducted in accordance with the COGE (Canadian Oil and Gas Evaluation) Handbook and NI 51-101. The evaluations are conducted using all available geological and engineering data. The reserves committee has reviewed the reserves information and approved the reserve report.