StonePoint Energy Inc.
TSX VENTURE : STO

StonePoint Energy Inc.

February 19, 2015 17:02 ET

StonePoint Energy Inc. Provides 2014 Year-End Reserves

CALGARY, ALBERTA--(Marketwired - Feb. 19, 2015) - StonePoint Energy Inc. (TSX VENTURE:STO) ("StonePoint" or "the Company") is providing a summary of its 2014 year-end reserves.

HIGHLIGHTS

  • 399% increase in Proved plus Probable ("2P") gross reserves from 444.8 Mboe at year end 2013 to 2,217.9 Mboe.
  • Total Proved ("1P") gross reserves increased 270% from 278.0 Mboe at year end 2013 to 1,028.9 Mboe.
  • Proved Developed Producing ("PDP") gross reserves increased from 37.6 Mboe at year end 2013 to 280.6 Mboe representing an increase of 646%.
  • Before tax net present value of our 2P gross reserves discounted at 10% ("NPV10") was $14.3 million compared to $6.3 million at year-end 2013.
  • Company's net asset value ("NAV") per share at December 31, 2014 is $0.14 (1)

Notes:

  1. NAV calculation based on 2P NPV10 reserve value of $14.3 million, approximately $15 million net cash on hand at December 31, 2014, no value attributed to undeveloped land and 214.4 million common shares outstanding. Financial information is based on the Company's preliminary 2014 unaudited financial statements and is therefore subject to audit.

RESERVES SUMMARY

The summary below sets forth StonePoint's reserves as at December 31, 2014, as evaluated in an independent report dated February 2, 2015 (the "Trimble Report") prepared by Trimble Engineering Associates Ltd. ("Trimble"). The Trimble Report was prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and National Instrument 51-101 ("NI 51-101"). Further information in respect of the Company's reserves as evaluated in the Trimble Report will be available in the Company's Statement of Reserves Data which will be filed on SEDAR.

Summary of Oil and Gas Reserves

Effective Date: December 31, 2014 Light and Medium Oil Natural Gas Liquids Natural Gas Total Oil Equivalent
Reserve Category Gross
(Mbbl)
Net
(Mbbl)
Gross
(Mbbl)
Net
(Mbbl)
Gross
(Mcf)
Net
(Mcf)
Gross
(Mboe)
Net
(Mboe)
Proved
Developed Producing 119.4 102.7 66.4 42.0 568.5 480.5 280.6 224.8
Developed Non-Producing 22.9 18.3 5.8 3.9 129.7 115.7 50.3 41.5
Undeveloped 0.0 0.0 143.1 118.6 3,329.3 3,051.5 698.0 629.2
Total Proved 142.3 121.0 215.4 164.5 4,027.4 3,647.7 1,028.9 893.5
Probable
Total Probable 93.6 81.7 242.8 185.9 5,115.4 4,320.2 1,189.0 987.6
Total Proved and Probable 235.9 202.7 458.2 350.4 9,142.8 7,967.9 2,217.9 1,881.1

Summary of Net Present Value of Future Net Revenue

Effective Date: December 31, 2014 Before Income Tax Discounted at (%/year)
Reserve Category 0% (M$) 5% (M$) 10% (M$)
Proved
Developed Producing 6,159.5 4,876.3 4,096.9
Developed Non-Producing 162.5 129.1 102.6
Undeveloped 6,446.1 2,827.6 887.6
Total Proved 12,768.1 7,833.0 5,087.2
Probable
Total Probable 23,029.9 13,897.9 9,169.1
Total Proved and Probable 35,798.0 21,730.9 14,256.3

Notes:

  1. The tables summarize the data contained in the Trimble Report and as a result may contain slightly different numbers due to rounding.
  2. Gross reserves means the Company's working interest (operating or non-operating) share before deductions of royalties payable to others and without including any royalty interests owned by StonePoint. Net reserves means the Company's working interest (operating or non-operating) share after deduction of royalty obligations, plus the Company's royalty interests in reserves.
  3. Based on Trimble's January 1, 2015 escalated price forecast. See "Summary of Pricing and Inflation Rate Assumptions".
  4. The net present value of future net revenue attributable to the Company's reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, development costs, other income, future capital expenditures, and well abandonment costs for only those wells assigned reserves by Trimble. It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to the Company's reserves estimated by Trimble represent the fair market value of those reserves. The recovery and reserve estimates of the Company's oil, NGL and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.
  5. Future development capital of $9.2 million (1P) and $14.7 million (2P) discounted at 10%.

Reconciliation of Gross Reserves (before Royalties) by Principal Product Type

Light & Medium Oil Natural Gas
Factors Total
Proved
(Mbbl)
Total
Probable
(Mbbl)
Total
Proved +
Probable
(Mbbl)
Total
Proved
(Mcf)
Total
Probable
(Mcf)
Total
Proved +
Probable
(Mcf)
December 31, 2013 143.4 94.7 238.1 462.1 248.3 710.3
Technical Revisions 3.0 -6.9 -3.8 11.9 7.7 19.6
Infill Drilling 0.0 0.0 0.0 129.7 56.4 186
Economic Factors 0.0 4.0 4.0 0.0 0.0 0.0
Acquisitions and Dispositions -0.9 1.8 0.9 3,437.1 4,803.0 8,240.2
Production -3.3 0.0 -3.3 -13.3 0.0 -13.3
December 31, 2014 142.3 93.6 235.9 4,027.4 5,115.4 9,142.8
Natural Gas Liquids Total Oil Equivalent
Factors Total
Proved
(Mbbl)
Total
Probable
(Mbbl)
Total
Proved +
Probable
(Mbbl)
Total
Proved
(Mcf)
Total
Probable
(Mcf)
Total
Proved +
Probable
(Mcf)
December 31, 2013 57.6 30.6 88.2 278.0 166.7 444.8
Technical Revisions 0.8 0.5 1.2 5.8 -5.1 0.7
Infill Drilling 5.8 2.5 8.4 27.4 11.9 39.4
Economic Factors 0.0 0.0 0.0 0.0 4.0 4.0
Acquisitions and Dispositions 152.7 209.1 361.9 724.7 1011.5 1736.1
Production -1.5 0.0 -1.5 -7.1 0.0 -7.1
December 31, 2014 215.4 242.8 458.2 1,028.9 1,189.0 2,217.9

Notes:

  1. Columns may not add due to rounding
  2. There were no changes in reserves attributed to other categories

Summary of Pricing and Inflation Rate Assumptions - Forecast Prices and Costs

The forecast cost and price assumptions assume increases in wellhead selling prices and take into account inflation with respect to future operating and capital costs. Crude oil and natural gas benchmark reference pricing, inflation and exchange rates utilized by Trimble as at January 1, 2015 were as follows:

OIL (1) GAS (3)
YEAR
FORECAST
Exchange
Rate
US$/
CDN$
WTI
@
Cushing
US$/
bbl
Edmonton
Light
(2)
CDN$/
bbl
Henry
Hub
US$/
MMbtu
AECO
Spot
CDN$/
MMbtu
Cond.
(1)
CDN$/
bbl
But.
(4)
CDN$/
bbl
Prop.
(4)
CDN$/
bbl
2015 0.86 65.00 70.00 3.30 3.50 78.00 50.00 30.00
2016 0.86 78.00 85.00 3.70 4.00 93.00 60.00 35.00
2017 0.86 82.00 90.00 4.10 4.40 98.00 68.00 40.00
2018 0.86 86.00 95.00 4.30 4.60 103.00 73.00 45.00
2019 0.86 90.00 100.00 4.50 4.90 108.00 77.00 48.00
2020 0.86 95.00 105.00 4.80 5.20 113.00 80.00 50.00
2021 0.86 97.00 107.00 4.90 5.40 115.00 82.00 52.00
Prices escalating at 2.0 percent annually thereafter.

Notes:

  1. Oil and Condensate subject to quality differentials and transportation.
  2. Light oil prices for 40.0 degrees API, 0.3% sulphur at Edmonton (Light Sweet Crude).
  3. Alberta gas prices are quoted at AECO (NOVA Inventory Transfer - NIT).
  4. Alberta reference price.

ADVISORIES

Forward-Looking Statements: This press release contains forward-looking statements. More particularly, this press release contains forward-looking statements concerning the reserves attributable to the Company's assets and the estimate of the net present value of the future net revenues attributable thereto and availability of further reserve information in the Statement of Reserves Data. Although StonePoint believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because StonePoint cannot give assurances that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Risks include risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets and other economic and industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling services, incorrect assessment of value of acquisitions and failure to realize the benefits therefrom, delays resulting from or inability to obtain required regulatory approvals, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources and economic or industry condition changes. Actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that StonePoint will derive therefrom. Additional information on these and other factors that could affect StonePoint are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this press release are made as of the date hereof and StonePoint undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Barrels of Oil Equivalent: Disclosure provided herein in respect of barrels of oil equivalent (BOE) 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1; utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information