News today CALGARY, Feb. 13, 2013, 2013 (Canada NewsWire via COMTEX News Network) -- Connacher Oil and Gas Limited (CLL - TSX)
reported today that as of December 31, 2012 its estimated proved ("1P")
bitumen reserves, as evaluated by GLJ Petroleum Consultants Ltd.
("GLJ"), independent qualified reserves evaluators, totaled
approximately 214 million barrels. 1P bitumen reserve volumes have
increased by 22 per cent, over year-end 2011 volumes, after production
of 4.3 million barrels during the year, due largely to the approval of
the Great Divide Expansion Project. The ten per cent present value
("10% PV") of 1P bitumen reserves is approximately $1.0 billion.
Proved and probable ("2P") reserve volumes totaled approximately 451
million barrels of bitumen. 2P bitumen reserve volumes decreased by
approximately 10 per cent, due primarily to the implementation of an
updated GLJ recovery model for estimating future recoverable volumes
and pad performance. The ten per cent present value of 2P bitumen
reserves decreased to approximately $1.8 billion, due primarily to
increased estimated future capital costs, adjusted near-term production
forecasts and lower future commodity prices, as estimated by GLJ.
Detailed information included in the GLJ December 31, 2012 report
("Year-End 2012 Report") regarding Connacher's bitumen reserves and
resources and associated present values are set forth in the tables
below, including a comparison of year-end 2012 results to year-end 2011
results. The Company disposed of all of its conventional oil and
natural gas reserves during 2012.
The Year-End 2012 Report was prepared using assumptions and methodology
guidelines outlined in the Canadian Oil and Gas Evaluation Handbook
("COGE Handbook") and in accordance with National Instrument 51-101
("NI 51-101"). Comparisons provided herein with respect to Connacher's
bitumen reserves, bitumen resources and for 10% PV for December 31,
2012 are to estimates contained in the report, prepared by GLJ, with an
effective date of December 31, 2011 ("Year-End 2011 Report").
Connacher owns a 100 percent working interest in approximately 87,000
net acres of oil sands leases, primarily located at its Great Divide
project in Northeastern Alberta, situated 80 kilometers southwest of
Fort McMurray. Numerous oil accumulations in the McMurray formation
have been identified for continuing and future development on
Connacher's properties.
Connacher's first steam-assisted gravity drainage ("SAGD") project at
Great Divide, Pod One, has been producing bitumen since late 2007, with
commercial production commencing March 1, 2008. Algar commenced
producing bitumen in August 2010 and commerciality was achieved October
1, 2010. Production from both projects since startup through December
31, 2012 has totaled approximately 17 million barrels of bitumen. Such amounts have been deducted from
earlier estimates of proved reserves prior to the calculation of
reserves as at December 31, 2012.
Unless otherwise stated, reserves refer to reserves of bitumen.
Resources refers to bitumen resources. Future net revenue is
calculated after the deduction of forecast royalties, operating
expenses, estimated future capital expenditures and well abandonment
costs, but before corporate overhead or other indirect costs, including
interest and income taxes, from forecast revenue. The 10 percent
pre-tax present value of future net revenue is also referred to as
"present value" or "PV". Certain amounts cited herein have been rounded
for presentation purposes. Outstanding financial hedges were not
included in the evaluation. The GLJ Year-End 2012 Report was prepared
utilizing the GLJ January 1, 2013 price forecast, effective December
31, 2012. Readers are referred to the notes to the Summary Tables
included in this press release for details regarding the price forecast
used by GLJ. Earlier reports were prepared using the price forecasts
then being applied by GLJ. Future net revenues disclosed herein do not
represent fair market value. Also, estimations of reserves, resources
and future net revenue discussed in this press release constitute
forward looking information. See "Forward Looking Information and
Reserves Advisory" below.
Additional details regarding Connacher's projects and development
opportunities at Great Divide can be accessed at www.connacheroil.com
or www.sedar.com. Furthermore, additional information regarding
Connacher's reserves and resources, including the Company's interest in
the resources and the risks and the level of uncertainty associated
with the recovery of the resources, can be found in the Company's
annual information form ("AIF") dated March 16, 2012. This AIF can be
accessed at www.sedar.com. The Company will be filing an updated AIF
later this year and prior to March 31, 2013, once it has completed the
audit of its financial and operating results for the year-ended
December 31, 2012 and has released them to the public. This is
anticipated to occur on March 27, 2013.
About Connacher
Connacher Oil and Gas Limited is a single purpose company active in the
development, production and sale of bitumen. The Company's principal
assets are holdings in the Great Divide oil sands project in northern
Alberta, south of Fort McMurray.
Summary Tables
Amounts presented are working interest volumes which are the Company's
working interest (operating or non-operating) share before deducting
royalties and without including any royalty interests of the Company.
Bitumen Reserves and Resources (thousand bbls) 31-Dec-11 31-Dec-12 Proved Producing 25,080 19,931 Total Proved Reserves (1P) 175,185 214,009 Probable 325,640 237,393 Proved and Probable Reserves (2P) 500,825 451,402 Proved, Probable & Possible (3P) 605,687 569,303 Best Estimate Contingent Resources 174,692 61,989
10% Present Value of Future Net Revenue Bitumen Reserves and Resources - Before Tax Dec-11 Dec-12 $MM $MM Proved Producing 528 320 Total Proved Reserves (1P) 1,110 1,009 Probable 1,302 749 Proved and Probable Reserves (2P) 2,412 1,758 Proved, Probable and Possible (3P) 3,127 2,444 Best Estimate Contingent Resources 127 61
Before Tax Present Value ($MM) 0% 5% 8% 10% 12% Proved Producing 433 368 337 320 304 Total Proved 4,041 1,917 1,291 1,009 798 Proved plus Probable Producing 699 579 523 491 463 Total Proved plus Probable 9,853 3,799 2,349 1,758 1,344 Total PPP 14,455 5,313 3,259 2,444 1,880