Shiningbank Energy Income Fund

Shiningbank Energy Income Fund

March 04, 2005 09:00 ET

Shiningbank Energy Announces 2004 Reserve Information


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SHININGBANK ENERGY INCOME FUND

TSX SYMBOL: SHN.UN

MARCH 4, 2005 - 09:00 ET

Shiningbank Energy Announces 2004 Reserve Information

CALGARY, ALBERTA--(CCNMatthews - March 4, 2005) - Shiningbank Energy
Income Fund (TSX:SHN.UN) (the "Fund" or "Shiningbank"), today announced
the results of its December 31, 2004 independent reserves evaluation.
Parts of the evaluation were conducted by each of Paddock Lindstrom &
Associates Ltd. ("PLA") and Sproule Associates Limited ("Sproule")
effective December 31, 2004 and prepared in accordance with National
Instrument 51-101. The following information aggregates the results of
the two reports.

2004 HIGHLIGHTS

- Increased proved plus probable reserves by 22% and proved reserves by
15% through acquisition and development in 2004;

- Proved producing reserves constitute 84% of total proved reserves and
total proved reserves equate to 68% of total proved plus probable
reserves;

- Shiningbank replaced 277% of 2004 production with new reserves
acquired or developed in the year, bringing cumulative replacement to
276% of production over the life of the Fund;

- On the basis of proved plus probable reserves:

- New reserves were acquired at an average cost of $12.90 per barrel of
oil equivalent ("boe") including future development costs ("FDCs") and
$11.16 per boe excluding FDCs;

- Three year acquisition costs averaged $11.98 per boe including FDCs
and $10.66 per boe excluding FDCs;

- Development costs for the year aggregated $11.79 per boe including
technical revisions and changes in FDCs and $9.80 per boe excluding
revisions and FDCs;

- Total acquisition and development costs, including revisions and the
change in FDCs and technical revisions, aggregated $12.70 per boe,
$10.81 per boe without revisions and FDCs;

- The recycle ratio for 2004, based on an operating netback of $25.96
per boe, was 2.0 to 1, indicating extremely cost effective reserve
additions.

- The Fund's reserve life index ("RLI") stands at 9.8 years based on
estimated 2005 production. Shiningbank's RLI has fluctuated between 9.6
and 10.4 years over the past five years.

The following tables summarize the independent reserve estimates and
value at December 31, 2004:



Summary of Oil and Gas Reserves - Forecast Prices and Costs

------------------------------------------------------------------------
Reserves (Company Interest)
------------------------------------------------------------------------
2004 2003
Natural Oil Oil
Oil Gas NGL Equivalent Equivalent
(mbbl) (mmcf) (mbbl) (mboe) (mboe)
------------------------------------------------------------------------
Proved
Developed
Producing 4,791.6 173,242.7 5,979.9 39,645.3 35,852.1
Developed
Non-Producing 29.5 17,025.5 424.5 3,291.6 2,846.1
Undeveloped 159.8 19,459.3 1,069.0 4,472.0 2,353.4
------------------------------------------------------------------------
Total Proved 4,980.9 209,727.5 7,473.4 47,408.9 41,051.6
Probable 2,558.4 97,880.7 3,771.2 22,643.1 16,343.6
------------------------------------------------------------------------
Total Proved
plus Probable 7,539.3 307,608.2 11,244.6 70,052.0 57,395.2
------------------------------------------------------------------------
------------------------------------------------------------------------


Value of Reserves using Forecast Prices and Costs
------------------------------------------------------------------------
Discount factor
(000s) 0% 5% 10% 12% 15%
------------------------------------------------------------------------
Present value
of reserves
Proved Developed
Producing $ 864,857 $689,424 $584,968 553,666 $514,101
Proved Developed
Non-Producing 68,892 51,863 41,798 38,828 35,116
Proved
Undeveloped 81,373 59,707 45,987 41,840 36,615
------------------------------------------------------------------------
Total Proved 1,015,122 800,994 672,753 634,334 585,832
Probable 464,884 273,833 188,585 166,835 141,620
------------------------------------------------------------------------
Total Proved
plus Probable $1,480,006 $1,074,827 $861,338 $801,169 $727,452
------------------------------------------------------------------------
------------------------------------------------------------------------


Reserves Reconciliation
------------------------------------------------------------------------
Reserves (Company Interest)
------------------------------------------------------------------------
2004
Oil
Oil Natural Gas NGL Equivalent
(mbbl) (mmcf) (mbbl) (mboe)
Total Proved
December 31, 2003 4,572.8 182,862.3 6,001.7 41,051.6
Acquisitions 1,434.2 41,014.7 1,891.9 10,161.9
Dispositions (86.5) (536.7) (15.6) (191.6)
Extensions 0.0 2,196.9 121.8 488.0
Discoveries 37.5 15,893.2 701.4 3,387.8
Technical revisions and
economic factors (105.6) (20.7) (84.0) (193.1)
Production (871.5) (31,682.2) (1,143.8) (7,295.7)
------------------------------------------------------------------------
December 31, 2004 4,980.9 209,727.5 7,473.4 47,408.9
------------------------------------------------------------------------
------------------------------------------------------------------------

Total Proved plus Probable
December 31, 2003 6,786.6 252,953.5 8,449.7 57,395.2
Acquisitions 2,216.3 67,384.7 3,117.3 16,564.4
Dispositions (149.8) (626.1) (15.6) (269.8)
Extensions 0.0 2,976.7 160.2 656.4
Discoveries 50.4 23,589.6 1,108.2 5,090.2
Technical revisions and
economic factors (492.7) (6,988.0) (431.4) (2,088.7)
Production (871.5) (31,682.2) (1,143.8) (7,295.7)
------------------------------------------------------------------------
December 31, 2004 7,539.3 307,608.2 11,244.6 70,052.0
------------------------------------------------------------------------
------------------------------------------------------------------------

Notes to tables:
1. Barrel of oil equivalent (boe) volumes are reported at 6:1 with
6 mcf = 1 bbl. The 6:1 conversion ratio is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. While it
is useful for comparative measures, it may not accurately reflect
individual product values and may be misleading if used in isolation.
2. Company interest includes working interest plus royalty interests
attributable to the Fund.
3. The present value of reserves is net of estimated future capital
expenditures, royalty burdens, operating costs and abandonment costs,
but prior to any provision for general and administrative expenses.
It should not be assumed that present value is representative of the
fair market value of the assets. Present value is based on Sproule's
escalated price forecast as of January 1, 2005, which assumes a base
2005 oil price of US$44.29/bbl and an Alberta natural gas reference
price of C$6.76/mcf.


Shiningbank Energy Income Fund is a conventional oil and gas royalty
trust and its units are listed on The Toronto Stock Exchange under the
symbol "SHN.UN".

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Shiningbank Energy Income Fund
    David M. Fitzpatrick
    President and CEO
    (403) 268-7477 or Toll Free 1-866-268-7477
    or
    Shiningbank Energy Income Fund
    Bruce K. Gibson
    Vice President and CFO
    (403) 268-7477 or Toll Free 1-866-268-7477
    or
    Shiningbank Energy Income Fund
    Debbie Carver
    Investor Relations
    (403) 268-7477 or Toll Free 1-866-268-7477
    (403) 268-7499 (FAX)
    Email: irinfo@shiningbank.com
    Website: www.shiningbank.com