Choice Resources Corp.
TSX VENTURE : CZE

Choice Resources Corp.

November 03, 2005 16:39 ET

Choice Announces Updated Reserves Report

CALGARY, ALBERTA--(CCNMatthews - Nov. 3, 2005) - Choice Resources Corp. (TSX VENTURE:CZE) ("Choice") is pleased to announce the results of a mechanical update of its year-end February 28, 2005 reserves report. The updated report, also done by Sproule Associates Limited, is dated October 11, 2005 and effective as of September 30, 2005 and is based on the same assumptions as the February report. The updated report reflects only the changes in reserves, interests or economic factors outlined below:

1) The sale of a 25% interest in the Pincher Creek unit;

2) Changes to Choice's interests in the new horizontal well at Pincher Creek, before and after payout;

3) Changes in Choice's working interest in three wells in the Snipe Lake area as a result of acquisitions and dispositions;

4) One new gas well at Iron Creek, where previously no reserves were assigned;

5) Sproule's forecast prices in effect as of September 30th were utilized;

6) Capital forecast from yearend February 28, 2005 to the September 30, 2005 effective date was assumed to have been spent; and

7) Production to September 30, 2005 was subtracted mechanically and may vary from actual volumes.

Except for the Iron Creek well, the updated report does not reflect any updated reservoir engineering evaluation of Choice's reserves. Accordingly, the updated report does not assign new reserves to the new Pincher Creek horizontal well. This well will be evaluated in Choice's year-end reserve report.

The following tables outline the September report under forecast prices and costs as mechanically updated from the previous report.

The evaluations of future revenue are after the deduction of royalties, development costs, production costs and well abandonment costs but before deduction of future income tax expenses and before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. The estimated future net revenue contained in the following tables does not represent the fair market value of the Corporation's reserves. There is no assurance that the forecast price and cost assumptions contained in the Sproule Report will be attained and variances could be material. Other assumptions and qualifications relating to costs and other matters are included in the Sproule Report. The recovery and reserves estimates on the Corporation's properties described herein are estimates only. The actual reserves on the Corporation's properties will be greater or less than those calculated in the report.



Table 1
NI 51-101
Summary of Oil and Gas Reserves
as of September 30, 2005
Forecast Prices and Costs

Reserves
------------------------------------------------------------------------
Natural Gas
Light and (non-associated
Medium Oil Heavy Oil & associated)
------------------------------------------------------------------------
Reserve Gross Net Gross Net Gross Net
Category (Mbbl) (Mbbl) (Mbbl) (Mbbl) (MMcf) (MMcf)
------------------------------------------------------------------------
Proved
Developed Producing 28.0 23.2 0.0 0.0 21,181 15,825
Developed Non-Producing 0.0 0.0 0.0 0.0 352 300
Undeveloped 0.0 0.0 0.0 0.0 2,253 1,856
Total Proved 28.0 23.2 0.0 0.0 23,786 17,980
Probable 13.7 11.6 0.0 0.0 7,832 6,141
Total Proved Plus Probable 41.7 34.8 0.0 0.0 31,619 24,122
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Natural Gas Natural Gas
(solution) Liquids
------------------------------------------------------------------------
Gross Net Gross Net
Reserve Category (MMcf) (MMcf) (Mbbl) (Mbbl)
------------------------------------------------------------------------
Proved
Developed Producing 0 0 473.5 302.4
Developed Non-Producing 0 0 0.0 0.0
Undeveloped 0 0 26.1 16.8
Total Proved 0 0 499.6 319.2
Probable 0 0 97.3 62.5
Total Proved Plus Probable 0 0 596.9 381.7
------------------------------------------------------------------------
------------------------------------------------------------------------


Table 2
NI 51-101
Summary of Net Present Values
of Future Net Revenue
as of September 30, 2005
Forecast Prices and Costs

------------------------------------------------------------------------
Net Present Values of Future Net Revenue
------------------------------------------------------------------------
Before Income Taxes
Discounted at (%/Year)
------------------------------------------------------------------------
0 5 10 15 20
Reserves Category (M$) (M$) (M$) (M$) (M$)
------------------------------------------------------------------------
Proved
Developed Producing 103,242 67,285 53,707 46,531 41,894
Developed Non-Producing 1,898 1,492 1,250 1,095 990
Undeveloped 5,080 7,285 6,562 5,705 4,994
Total Proved 110,220 76,063 61,519 53,331 47,879
Probable 36,913 25,487 19,959 16,527 14,140
Total Proved Plus Probable 147,133 101,550 81,478 69,858 62,019
------------------------------------------------------------------------
------------------------------------------------------------------------


Table S-2
Summary of Selected Price Forecasts
(Effective September 30, 2005)

------------------------------------------------------------------------
Edmonton
WTI Par Price Alberta
Cushing(a) 40 degrees AECO-C
Oklahoma API Spot Henry Hub
Year ($US/bbl) ($Cdn/bbl) ($Cdn/MMBTU) ($US/MMBtu)
------------------------------------------------------------------------
Historical
2000 30.30 44.03 5.07 3.89
2001 25.94 39.06 6.23 4.27
2002 26.09 40.12 4.04 3.22
2003 31.14 43.23 6.66 5.39
2004 41.42 52.91 6.87 6.14

Forecast
2005 3 mo 66.60 79.73 11.46 12.30
2006 67.41 80.73 10.97 10.68
2007 61.17 73.10 9.57 8.71
2008 43.92 52.04 6.62 6.27
2009 42.45 50.24 6.39 6.10
2010 43.09 51.00 6.42 6.14
2011 43.74 51.77 6.53 6.23
2012 44.39 52.55 6.64 6.33
2013 45.06 53.34 6.76 6.42
2014 45.74 54.14 6.88 6.52
2015 46.42 54.96 7.00 6.62
2016 47.12 55.79 7.12 6.71
Escalation rate of 1.5% thereafter.
------------------------------------------------------------------------
------------------------------------------------------------------------


CAUTION REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained herein constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this report should not be unduly relied upon. These statements speak only as of the date of this presentation. The Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information

  • Choice Resources Corp.
    Gordon D. Harris
    President and CEO
    (403) 216-5821
    or
    Choice Resources Corp.
    Steve Austin
    Chief Financial Officer
    (403) 216-5821
    (403) 216-5828 (FAX)
    Email: info@choiceresources.ca
    or
    Choice Resources Corp.
    Suite 1150 - 606 4th Street SW
    Calgary, AB Canada T2P 1T1