Bonterra Energy Corp.

TSX : BNE


Bonterra Energy Corp.

February 11, 2014 18:30 ET

Bonterra Energy Corp. Provides an Operations Update and Releases Its Corporate Reserves Information

CALGARY, ALBERTA--(Marketwired - Feb. 11, 2014) - Bonterra Energy Corp. (Bonterra or the Company) (www.bonterraenergy.com) (TSX:BNE) is pleased to provide an operational update including 2013 highlights and its ongoing Cardium development program as well as the results of its independent reserve report prepared by Sproule Associates Limited with an effective date of December 31, 2013.

Operational Highlights

  • Record average daily production for the full year of 12,190 barrels of oil equivalent (BOE) per day (70.0 percent oil and liquids), an increase of 81.9 percent over the same period in 2012.
  • Record average daily production of 12,456 BOE per day in the fourth quarter, an increase of 62.5 percent when compared to the fourth quarter of 2012.
  • Production per fully diluted share increased 18.5 percent to 0.147 BOE per share from 0.124 BOE per share from the prior year.
  • The Board of Directors has approved a 2014 capital development program of $120.0 million which mainly targets light oil prospects In the Pembina Cardium Field, most notably focused on development in its Carnwood area holdings.
  • Currently 56 gross (41.05 net) wells are planned for 2014. Bonterra intends to spend approximately $72 million of its capital budget in the Carnwood area, drilling 26 gross (25.5 net) wells and completing 30 wells (includes four wells which were drilled in 2013). In addition, Bonterra has allocated approximately $13.4 million for infrastructure optimizations and secondary recovery pilot projects.
  • The first Carnwood unit four well pad's (16-12-48-6) first full month of production averaged 191 BOE per day per well. The second four well pad (14-12-48-6) has just been placed on production, with the third four well pad (09-02-48-6) to be placed on production by the end of February 2014.
  • Bonterra's full year production levels in 2014 are expected to average between 12,400 and 12,700 BOE per day (72 percent oil and liquids).
  • Bonterra continues to pursue technological enhancements (including longer horizontal lengths, increased frac densities, limited entry frac design and a potential transition to cemented completions) in order to reduce average well costs and improve recoveries.

The Company has not released its audited 2013 financial results therefore the numbers provided are currently estimates and unaudited.

Corporate Reserves Information

Bonterra engaged the services of Sproule Associates Limited to prepare a reserve evaluation with an effective date of December 31, 2013. The gross reserve figures from the following tables represent Bonterra's ownership interest before royalties and before consideration of the Company's royalty interests. Tables may not add due to rounding.

Reserve Report Highlights

  • Increased proved plus probable reserves by 66.5 percent to 75.0 mmboe (74 percent oil and liquids) and proved reserves by 63.3 percent to 54.1 mmboe (74 percent oil and liquids).
  • Total proved reserves represent 72.1 percent of total proved plus probable reserves.
  • Reserves per fully diluted share (P+P) increased 8.3 percent to 2.47 BOE per share compared to 2.28 BOE per share from the prior year.
  • Reserve life index of 16.9 years on P+P basis, 11.8 years on a proved basis, and 6.9 years on a PDP basis (based on 2013 average production rate of 12,190 BOE per day) continues to remain above industry average.
  • Booked reserves represent approximately 30 percent of Bonterra's current potential inventory of undrilled locations.

Summary of Gross Oil and Gas Reserves as of December 31, 2013



Reserve Category:
Light and
Medium Oil
(Mbbl)
Natural Gas
(MMcf)
Natural Gas
Liquids
(Mbbl)
BOE(1)
(MBOE)
PROVED
Developed Producing 20,015 51,518 1,905 30,506
Developed Non-Producing 457 1,180 39 692
Undeveloped 16,655 30,372 1,180 22,897
TOTAL PROVED 37,127 83,070 3,124 54,096
PROBABLE 14,174 33,120 1,191 20,885
TOTAL PROVED PLUS PROBABLE 51,301 116,190 4,315 74,981

Reconciliation of Company Gross Reserves by Principal Product

Type as of December 31, 2013

Light and Medium
Oil and Natural
Gas Liquids


Natural Gas


BOE(1)
Proved
(Mbbl)
Proved
plus
Probable
(Mbbl)
Proved
(MMcf)
Proved
plus
Probable
(MMcf)
Proved
(MBOE)
Proved
Plus
Probable
(MBOE)
December 31, 2012 24,925 33,662 49,258 68,221 33,134 45,032
Extension 826 1,207 1,839 2,727 1,133 1,662
Infills 3,155 4,115 5,140 6,658 4,012 5,225
Improved Recovery 0 0 0 0 0 0
Technical Revisions (423 ) (1,482 ) 12,832 15,563 1,716 1,112
Discoveries 0 0 0 0 0 0
Acquisitions 14,751 21,077 22,116 31,115 18,437 26,263
Dispositions 0 0 0 0 0 0
Economic factors 131 150 (102 ) (82 ) 114 136
Production (3,114 ) (3,114 ) (8,013 ) (8,013 ) (4,449 ) (4,449 )
December 31, 2013 40,251 55,616 83,070 116,190 54,096 74,981

Summary of Net Present Values of Future Net Revenue as of December 31, 2013

Net Present Value Before Income Taxes
Discounted at (% per Year)
($ Millions) 0% 5% 10%
Reserve Category:
PROVED
Developed Producing 1,390,356 931,047 711,393
Developed Non-Producing 32,856 25,609 21,496
Undeveloped 897,711 487,517 288,092
TOTAL PROVED 2,320,923 1,444,173 1,020,981
PROBABLE 1,203,225 485,064 249,468
TOTAL PROVED PLUS PROBABLE 3,524,148 1,929,237 1,270,449

Finding, Development and Acquisition (FD&A) Costs

The Company has historically been active in its capital development program. Over three years, Bonterra has incurred the following FD&A(3) costs excluding Future Development Costs:

2013 FD&A
Costs per
BOE(1)(2)(3)
2012 FD&A
Costs per
BOE(1)(2)(3)
2011 FD&A
Costs per
BOE(1)(2)(3)
Three Year
Average(4)
Proved Reserve Net Additions $ 23.63 $ 13.64 $ 33.22 $ 22.01
Proved plus Probable Reserve Net Additions $ 20.12 $ 16.05 $ 15.38 $ 19.11

Over three years, Bonterra has incurred the following FD&A(3) costs including Future Development Costs:

2013 FD&A
Costs per
BOE(1)(2)(3)
2012 FD&A
Costs per
BOE(1)(2)(3)
2011 FD&A
Costs per
BOE(1)(2)(3)
Three Year
Average(5)
Proved Reserve Net Additions $ 24.80 $ 20.91 $ 57.53 $ 23.26
Proved plus Probable Reserve Net Additions $ 21.06 $ 21.62 $ 35.40 $ 20.22

Finding and Development (F&D) Costs

Over three years, Bonterra has incurred the following F&D(3) costs excluding Future Development Costs:

2013 F&D
Costs per
BOE(1)(2)(3)
2012 F&D
Costs per
BOE(1)(2)(3)
2011 F&D
Costs per
BOE(1)(2)(3)
Three Year
Average(4)
Proved Reserve Net Additions $ 17.10 $ 13.56 $ 33.06 $ 17.64
Proved plus Probable Reserve Net Additions $ 13.41 $ 18.79 $ 15.31 $ 15.24

Over three years, Bonterra has incurred the following F&D (3) costs including Future Development Costs:

2013 F&D
Costs per
BOE(1)(2)(3)
2012 F&D
Costs per
BOE(1)(2)(3)
2011 F&D
Costs per
BOE(1)(2)(3)
Three Year
Average(5)
Proved Reserve Net Additions $ 21.38 $ 22.26 $ 57.37 $ 20.51
Proved plus Probable Reserve Net Additions $ 17.04 $ 26.61 $ 35.33 $ 18.09
(1) Barrels of Oil Equivalent may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
(2) The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.
(3) FD&A and F&D costs are net of proceeds of disposal and the FD&A costs per BOE are based on reserves acquired net of reserves disposed of.
(4) Three year average is calculated using three year total capital costs and reserve additions on both a Proved and Proved plus Probable basis.
(5) Three year average is calculated using three year total capital costs and reserves additions on both a Proved and Proved plus Probable basis plus the average change in future capital costs over the three year period.

Certain financial and operating information, such as production information, finding and development costs and net asset values, included in this press release for the quarter and year ended December 31, 2013 are based on estimated unaudited financial results for the year and are subject to the same limitations as discussed under Forward Looking Statements set out below. These estimated amounts may change upon the completion of audited financial statements for the year ended December 31, 2013 and changes could be material. All reserve numbers provided above are Bonterra's interest before royalties.

It should not be assumed that the estimates of future net revenue presented in the above tables represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. Estimates of reserves and future net revenues for individual properties may not reflect the same confidence level as estimates of reserves and future net revenues for all properties due to the effects of aggregation.

Caution Regarding Engineering Terms:

Disclosure provided herein in respect of barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 MCF to 1 barrel has been used in all cases in this disclosure. This BOE conversion ratio is based on an energy equivalency conversion method primarily available at the burner tip and does not represent a value equivalency at the wellhead.

Forward-looking Information

Certain statements contained in this release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this release includes, but is not limited to: expected cash provided by continuing operations; cash dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from.
Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The forward-looking information contained herein is expressly qualified by this cautionary statement.

The TSX does not accept responsibility for the accuracy of this release.

Contact Information

  • Bonterra Energy Corp.
    George F. Fink
    Chairman and CEO
    (403) 262-5307
    (403) 265-7488 (FAX)

    Bonterra Energy Corp.
    Robb D. Thompson
    CFO and Secretary
    (403) 262-5307
    (403) 265-7488 (FAX)

    Bonterra Energy Corp.
    Kirsten Lankester
    Manager, Investor Relations
    (403) 262-5307
    (403) 265-7488 (FAX)
    info@bonterraenergy.com
    www.bonterraenergy.com