NR reserves increase 10% with 6400 b/d production
posted on
Feb 05, 2010 08:30AM
North American Oil and Gas - Alberta, Saskatchewan, Texas & California.
CALGARY, ALBERTA--(Marketwire - Feb. 4, 2010) - BlackPearl Resources Inc. ("BlackPearl" or the "Company") (TSX:PXX)(FIRST NORTH:PXXS) is pleased to announce the results of its 2009 year-end oil and gas reserves evaluation and to provide an update of the Company's current oil and gas production.
Highlights include:
Oil and Gas Reserves
The following tables summarize certain information contained in the independent reserves report prepared by Sproule Associates Limited ("Sproule") as of December 31, 2009. The report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE") and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR later this month.
John Festival, President of BlackPearl, commenting on the new reserves evaluation indicated that, "The 2009 reserves are in-line with our expectations. Overall proved plus probable reserves are down slightly due to reserves that were produced in 2009; however, we were able to convert a significant amount of probable reserves to proved reserves as a result of our 2009 activities. While current reserves are important, we are working on some larger, longer term projects that will require additional development before reserves are recognized. This includes our SAGD projects at Blackrod and Onion Lake, where no reserves from thermal recovery have been booked."
Summary of Oil and Gas Reserves – Forecasted Prices and Costs
(Company interest, before royalties) | Oil&NGL Reserves | Natural Gas Reserves | 2009 BOE (1) | 2008 BOE (1) |
(Mbbls) | (MMcf) | (Mboe) | (Mboe) | |
Proved developed producing | 2,733 | 4,484 | 3,482 | 5,405 |
Proved developed non-producing | 1,048 | 190 | 1,080 | 1,594 |
Proved undeveloped | 6,973 | 240 | 7,013 | 3,475 |
Total proved | 10,754 | 4,914 | 11,573 | 10,474 |
Probable | 11,795 | 1,659 | 12,071 | 15,856 |
Total proved plus probable | 22,549 | 6,573 | 23,645 | 26,330 |
(1) BOE's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 Mcf: 1barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. |
Net Present Value of Reserves – Forecasted Prices and Costs
Net Present Values of Before Tax Future Net Revenue Discounted at | ||||||
0% | 5% | 10% | 15% | 20% | ||
($000's) | ||||||
Proved | ||||||
Developed producing | 117,404 | 107,986 | 100,361 | 94,023 | 88,655 | |
Developed non-producing | 38,930 | 32,594 | 28,022 | 24,613 | 21,997 | |
Undeveloped | 194,445 | 148,960 | 119,799 | 99,424 | 84,324 | |
Total proved | 350,779 | 289,540 | 248,181 | 218,060 | 194,975 | |
Probable | 403,044 | 261,218 | 188,571 | 144,494 | 114,923 | |
Total proved plus probable | 753,823 | 550,759 | 436,752 | 362,554 | 309,899 | |
Net Present Values of After Tax Future Net Revenue Discounted at | ||||||
0% | 5% | 10% | 15% | 20% | ||
($000's) | ||||||
Proved | ||||||
Developed producing | 117,404 | 107,986 | 100,361 | 94,023 | 88,655 | |
Developed non-producing | 38,930 | 32,594 | 28,022 | 24,613 | 21,997 | |
Undeveloped | 194,445 | 148,960 | 119,799 | 99,424 | 84,324 | |
Total proved | 350,779 | 289,540 | 248,181 | 218,060 | 194,975 | |
Probable | 302,282 | 197,515 | 143,295 | 110,119 | 87,725 | |
Total proved plus probable | 653,061 | 487,055 | 391,476 | 328,179 | 282,701 |
Notes: |
Columns may not add due to rounding |
The pricing assumptions used in the Sproule evaluation are summarized below.
Pricing Assumptions – Forecast Prices and Costs
Year | WTI Cushing 40°API | Edmonton Par Price 40° API | Hardisty Lloydblend 20.5° API | Alberta AECO-C Spot | Inflation rate | Exchange rate |
(US$/bbl) | (CDN$/bbl) | (CDN$/bbl) | (CDN$/MMBtu) | (%/yr) | (US$/Cdn$) | |
2010 | 79.17 | 84.25 | 74.14 | 5.36 | 2.0 | 0.92 |
2011 | 84.46 | 89.99 | 78.29 | 6.21 | 2.0 | 0.92 |
2012 | 86.89 | 92.61 | 76.86 | 6.44 | 2.0 | 0.92 |
2013 | 90.20 | 96.19 | 78.87 | 7.23 | 2.0 | 0.92 |
2014 | 92.01 | 98.13 | 79.49 | 7.98 | 2.0 | 0.92 |
2015 | 93.85 | 100.11 | 81.09 | 8.16 | 2.0 | 0.92 |
2016 | 95.72 | 102.13 | 82.73 | 8.34 | 2.0 | 0.92 |
2017 | 97.64 | 104.19 | 84.40 | 8.52 | 2.0 | 0.92 |
2018 | 99.59 | 106.30 | 86.10 | 8.71 | 2.0 | 0.92 |
2019 | 101.58 | 108.44 | 87.84 | 8.90 | 2.0 | 0.92 |
2020 | 103.61 | 110.63 | 89.61 | 9.10 | 2.0 | 0.92 |
Escalation rate of 2.0% thereafter |
Notes: |
1. | The pricing assumptions were provided by Sproule Associates Limited | |
2. | None of the Company's future production is subject to a fixed or contractually committed price. |
This was the first year Sproule was engaged to prepare a reserves evaluation for the Company. In the prior year the Company requested another independent engineer to evaluate possible ("3P") reserves on the Company's properties. The 2008 reserves report included possible reserves for the Company's SAGD project at Blackrod. In 2009, the Company elected not to undertake an evaluation of its possible reserves. Given the significant capital expenditures required and the uncertainty of the timing of those expenditures, the Company felt it was appropriate to defer further review of possible reserves until we have results from our proposed pilot project and a commitment from the Company's Board of Directors to proceed with commercial development of the Blackrod lease.
On a net present value basis (10% discount, before tax), approximately 58% of the value of reserves were attributable to the Onion Lake area and 24% was attributable to the Mooney area. No reserves were assigned to the Blackrod project.
Definitions:
Production
In the fall of 2009 the Company initiated a 28 well drilling program at Onion Lake. Twenty-five of these wells are now on production resulting in current oil and gas production of approximately 6,400 boe per day. BlackPearl plans to drill an additional eight wells at Onion Lake in the first quarter, with additional drilling planned after spring break-up. The Company is also pursuing the sale of some of its non-core assets, primarily southern Alberta gas properties. These properties are currently producing about 600 boe per day.
Other
The Company is planning to release its 2009 year-end financial and operating results, as well as guidance for 2010, on February 25, 2010.