Cardinal Energy Ltd (Alberta) T.CJ

Abandonment costs.

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Seems to be a large discrepancy in Abandonment costs from Quarterly to info form ??? Most other companies report close to the same .







Additional Information Concerning Abandonment and Reclamation Costs

We estimate the costs to abandon and reclaim all our non-producing and producing wells, gas plants, batteries, and other facilities. No estimate of salvage value is netted against the estimated cost. Our model for estimating the amount of future abandonment and reclamation expenditures is done on an individual well and facility level. Each well and facility is assigned an average cost for abandonment and reclamation over its useful life. Timing of expenditures is based on budgets and estimates of such annual activities. Facility reclamation costs are generally scheduled to begin shortly before the end of the reserve life of our associated reserves and continue beyond the reserve life under the assumption that plant/facilities are generally mobile assets with a long useful life.

As at December 31, 2017 we had 4,511 net wells for which we expect to incur abandonment and reclamation costs. The estimates of the future net revenues disclosed in this Annual Information Form are $646 million (undiscounted) and $74.3 million (10% discount) was deducted for abandonment and reclamation costs with respect to all our non- producing and producing wells (including wells to which no reserves have been assigned), gas plants, batteries and other facilities. The Report deducted abandonment and reclamation costs from the future net revenues disclosed in the Form 51-101F2 which is attached as Appendix B to this Annual Information Form.