Traverse Energy Ltd.
TSX VENTURE : TVL

Traverse Energy Ltd.

March 14, 2016 17:11 ET

Traverse Energy Announces 2015 Year End Reserves

CALGARY, ALBERTA--(Marketwired - March 14, 2016) - Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents its 2015 year-end reserves. Traverse's independent reserve report was prepared by Sproule Associates Limited ("Sproule") in accordance with National Instrument 51-101 effective December 31, 2015.

Highlights

The Company's gross proved reserves increased from the prior year report by 35% from 1,343.8 MBOE (thousand barrels of oil equivalent) to 1,822.0 MBOE.

  • Company proved plus probable reserves of 2,290.8 MBOE - 19% year over year growth
  • Company proved developed producing reserves represent 61% of total proved reserves
  • Company proved reserves constitute 79% of total proved plus probable reserves
  • Net present value of future net revenue attributable to the reserves (before tax) discounted at 10% is $24.6 million for the proved reserves and $30.7 million for the proved plus probable reserves
  • Undiscounted total future development capital for the proved and proved plus probable reserves is $7.9 million
  • Company proved plus probable reserves are comprised of 55% oil and natural gas liquids and 45% natural gas

Summary of oil and gas reserves

The following tables are a summary of Traverse's petroleum and natural gas reserves, as evaluated by Sproule, effective December 31, 2015, using Sproule's forecast prices and costs. It should not be assumed that the estimates of future net revenue presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of the Company's crude oil, natural gas liquids, and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater or less than the estimates provided herein. Reserves information may not add due to rounding.

Summary of oil and gas reserves:

Light and Medium
Crude Oil
Conventional
Natural Gas
Natural Gas
Liquids
Oil
Equivalent
Reserve Category Gross(1)
(Mbbl)
Net(2)
(Mbbl)
Gross(1)
(MMcf)
Net(2)
(MMcf)
Gross(1)
(Mbbl)
Net(2)
(Mbbl)
Gross(1)
(MBOE)
Net(2)
(MBOE)
Proved Developed Producing 521.8 469.5 3,286 2,914 45.4 30.2 1,114.9 985.4
Proved Developed Non-producing 9.7 9.7 314 296 4.5 3.3 66.5 62.3
Proved Undeveloped 414.0 364.0 1,237 1,161 20.4 16.0 640.6 573.5
Total Proved 945.5 843.1 4,837 4,371 70.3 49.5 1,822.0 1,621.2
Probable 237.2 192.8 1,279 1,139 18.6 12.5 468.8 395.1
Total Proved Plus Probable 1,182.7 1,035.9 6,116 5,510 88.9 62.0 2,290.8 2,016.3
Notes:
1. Gross reserves are Traverse's working interest reserves before deduction of any royalties and before consideration of Traverse's royalty interests.
2. Net reserves are Traverse's working interest reserves after deduction of royalties, plus Traverse's royalty interests.

Summary of net present value of future net revenue as of December 31, 2015:

Value Before Income Taxes Discounted at (%/Year) (1) Unit Value Before Income Taxes
Reserve Category 0
(M$)
5
(M$)
10
(M$)
15
(M$)
20
(M$)
10%
$/BOE
Proved Developed Producing 23,009 18,791 15,790 13,610 11,979 16.02
Proved Developed Non-producing 373 396 386 362 333 6.20
Proved Undeveloped 15,069 11,135 8,458 6,586 5,229 14.75
Total Proved 38,450 30,322 24,634 20,558 17,542 15.20
Probable 13,829 8,760 6,046 4,482 3,507 15.30
Total Proved Plus Probable 52,279 39,082 30,679 25,040 21,048 15.22

Summary of net present value of future net revenue as of December 31, 2015 (continued):

Value After Income Taxes Discounted at (%/Year) (1)
Reserve Category 0
(M$)
5
(M$)
10
(M$)
15
(M$)
20
(M$)
Proved Developed Producing 22,858 18,727 15,762 13,597 11,972
Proved Developed Non-producing 278 349 362 350 328
Proved Undeveloped 10,830 8,181 6,298 4,947 3,948
Total Proved 33,967 27,256 22,422 18,895 16,249
Probable 10,150 6,461 4,459 3,302 2,581
Total Proved Plus Probable 44,117 33,718 26,881 22,197 18,830
Notes:
1. Includes future development capital of $7.9 million (undiscounted).

Reserve reconciliations

The following tables reconcile Traverse's gross reserves by principal product type. Gross reserves are Traverse's working interest reserves before deduction of any royalties and before consideration of Traverse's royalty interests:

Gross Reserves Light and Medium Crude Oil Conventional Natural Gas
Proved Probable Proved Plus Probable Proved Probable Proved Plus Probable
Mbbl Mbbl Mbbl MMcf MMcf MMcf
December 31, 2014 742.4 308.6 1,051.0 3,334 1,482 4,816
Infill drilling 300.3 72.3 372.6 1,323 316 1,639
Technical revisions 101.0 (140.4 ) (39.4 ) 1,388 (412 ) 976
Economic factors (23.0 ) (3.3 ) (26.3 ) (211 ) (107 ) (318 )
Production (175.2 ) 0.0 (175.2 ) (997 ) 0 (997 )
December 31, 2015 945.5 237.2 1,182.7 4,837 1,279 6,116
Gross Reserves (continued) Natural Gas Liquids Oil equivalent
Proved Probable Proved Plus Probable Proved Probable Proved Plus Probable
Mbbl Mbbl Mbbl MBOE MBOE MBOE
December 31, 2014 45.7 21.0 66.7 1,343.8 576.6 1,920.4
Infill drilling 21.8 5.3 27.1 542.6 130.3 672.9
Technical revisions 19.8 (6.4 ) 13.4 352.1 (215.4 ) 136.7
Economic factors (2.8 ) (1.3 ) (4.1 ) (60.9 ) (22.5 ) (83.4 )
Production (14.2 ) 0.0 (14.2 ) (355.5 ) 0.0 (355.5 )
December 31, 2015 70.3 18.6 88.9 1,822.0 468.8 2,290.8

BOE equivalent

The term "BOE" or barrels of oil equivalent may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Additionally, 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 ratio of 6:1 may be misleading as an indication of value.

Forward-looking information

This news release contains forward-looking information which is not comprised of historical fact. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes: the volumes of reserves attributable to the Company's assets and the estimate of the net present value of the future net revenue attributable thereto. This forward looking information is subject to a variety of substantial known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward looking information. The Company's Annual Information Form filed on April 15, 2015 with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describes the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.

Although the Company believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. The Company disclaims any intention or obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

The Company's 2015 year end audited financial statements, the related management's discussion and analysis and Annual Information Form are expected to be filed on or about April 14, 2016.

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

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