Canext Energy Ltd.
TSX VENTURE : CXZ

Canext Energy Ltd.

March 01, 2010 08:10 ET

Canext Announces Year End Reserves

CALGARY, ALBERTA--(Marketwire - March 1, 2010) - Canext Energy Ltd. ("Canext" or "the Company") (TSX VENTURE:CXZ) is pleased to announce the results of its year end reserve report.

Highlights

  • Proved Reserves are 3,534 mstboe up 10% from the September 30, 2009 report,
  • Proved and Probable (P+P) Reserves are 6,566 mstboe up 9% from September 30, 2009,
  • Net Present Value at 10% (NPV10) for Proved Reserves increased 25% from September 30, 2009, to $63,041,000,
  • NPV10 for P+P increased 22% from September 30, 2009, to $102,064,000,
  • Proved Reserves represent 54% of the P+P Reserves and 62% of the P+P NPV10,
  • Oil and Liquids account for 30% of the Proved Reserves and 28% of the P+P Reserves,
  • The Pouce Coupe natural gas and Sweeney oil properties account for 82% of the P+P Reserves,

The following tables summarize the Company's reserve information as prepared in accordance with National Instrument ("NI") 51-101 by Trimble Engineering Associates Ltd ("Trimble Report") with an effective date of December 31, 2009. The Trimble Report contains several cautionary statements that are required by NI 51-101. Additional information on the Company's reserves as required by NI 51-101 and the Company's financial statements for the year ended December 31, 2009, are expected to be filed on or about April 8, 2010 on SEDAR (www.sedar.com).

Reserves Summary – Company working interest before royalties using forecasted prices as at December 31, 2009

    Light and      
    Medium Oil NGL's Gas BOE 6:1
    mstb mstb mmscf mstboe
           
Proved Developed Producing 468 89 6,602 1,658
Proved Developed Non Producing 15 13 1,628 299
  Total Proved Developed 483 102 8,229 1,957
Proved Undeveloped 404 79 6,571 1,577
  Total Proved 887 181 14,800 3,534
Probable   617 135 13,682 3,032
  Total Proved + Probable 1,504 315 28,482 6,566

 (Tables may not add due to rounding.)
The Company's Proved plus Probable reserves are relatively unchanged from the start of the year (6,554 mstboe) as production of 361 mstboe and property dispositions of 149 mstboe were offset by additions and revisions to previous estimates of 522 mstboe. The revisions to previous estimates were positive 12.5 % and 7.5% for the Proved and P+P reserves. The positive revisions were mainly the result of a change in development plans to include horizontal drilling at Sweeney and Niton.

Approximately 76% of the Proved Developed Non Producing (PDNP) Reserves representing 88% of the PDNP NPV10 are expected to be on-stream by mid 2010. These reserves relate to the tie-in of one gas well at Pouce Coupe, re-activation of six wells at Boundary Lk South and the tie-in of a non operated Pembina Cardium horizontal well.

Proved Undeveloped (PUD) Reserves are booked for 7.2 net infill wells at Sweeney, Pouce Coupe, and Niton. One (0.6 net) PUD well at Sweeney has since been drilled, completed and placed on production.

Summary of Net Present Values of Future Net Revenue
Forecasted Prices and Costs
Before Income Taxes, Discounted at (%/year)
As at December 31, 2009

    0% 10% 15%
    $ 000's $ 000's $ 000's
         
Proved Developed Producing 52,092 35,004 30,544
Proved Developed Non Producing 6,601 4,343 3,663
  Total Developed 58,693 39,347 34,207
Undeveloped 41,460 23,694 19,085
  Total Proved 100,153 63,041 53,293
Probable 92,682 39,023 28,625
  Total Proved + Probable 192,835 102,064 81,918

Note: NI 51-101 disclosure requires Canext to provide the following warning:
 It should not be assumed that the present value of estimated future net cash flows shown above are representative of the fair market value of the reserves.

Forecasted price assumptions used in the Trimble Report as at December 31, 2009

  Exchange WTI Edmonton AECO
  Rate @ Cushing Light Spot
YEAR US$/CDN$ US$/bbl CDN$/bbl $/MMbtu
         
2010 Forecast 0.95 83.25 85.00 5.75
2011 Forecast 0.96 86.50 87.50 6.50
2012 Forecast 0.97 89.75 90.00 7.00
2013 Forecast 0.98 95.75 95.00 7.50
2014 Forecast 0.98 100.50 100.00 7.75
         
Prices escalating at 2.0 percent annually thereafter.  

Update

On February 11, 2010 the Company announced it has entered into an Arrangement Agreement with One Exploration Inc. (OneEx). Canext expects to mail an information circular to its shareholders on or about March 16, 2010 and has scheduled a special meeting of the Canext Shareholders for April 12, 2010.

Reader advisory:

The term "BOE" may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Investors are cautioned that the preceding statement of the Company may include certain estimates, assumptions and other forward-looking information. The actual future performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including natural gas/oil prices, reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development and production of gas and oil hedging, financing availability and other risks related to financial activities. The Company's forward looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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.

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