Vault Energy Trust
TSX : VNG.UN

Vault Energy Trust

February 23, 2007 09:00 ET

Vault Energy Announces 2006 Reserves and Provides Operations Update

CALGARY, ALBERTA--(CCNMatthews - Feb. 23, 2007) - Vault Energy Trust (TSX:VNG.UN) is pleased to announce its 2006 year-end reserves as evaluated by Sproule Associates Limited ("Sproule"), the independent reserves evaluator for all of Vault's oil and gas properties, in accordance with National Instrument 51-101. As Vault plans to announce its audited 2006 financial results in mid March, certain financial estimates have been made herein to facilitate the discussion of the performance of its capital program. Readers are advised that these financial estimates are subject to audit and may be amended as necessary.

RESERVES SUMMARY

- The report highlights year end Proved plus Probable reserves of 27.46 million BOE which is within 3% of year end 2005 numbers and has reaffirmed confidence in the company's base reserves.

- Vault added 1.86 million BOE Proved and 1.92 million BOE Proved plus Probable excluding acquisitions and dispositions.

- This represents a 68% replacement of Proved reserves and 70% replacement of Proved plus Probable reserves.

- Based on 2006 capital of $42 million plus future capital for Proved reserves of $0.7 million and $2.1 million for Proved plus Probable reserves (in accordance with NI 51-101) Vault's Proved F&D costs and Proved plus Probable F&D costs are $22.96/BOE and $22.97/BOE, respectively. Acquisition and disposition volumes are minor and are not included in these calculations in accordance with NI 51-101.



The following table summarizes Vault's company interest reserves effective
December 31, 2006.

Summary Table of Company Interest Reserves (1)(2)(3)
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Proved Developed Total Total Proved
Producing Proved Plus Probable
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Oil, Mstb 6,675 8,468 11,395
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Natural Gas, MMcf 52,018 62,131 86,419
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Liquids, Mstb 1,183 1,313 1,660
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Oil Equivalent, Mboe 16,528 20,137 27,458
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The following table reconciles Vault's company interest reserves from
December 31, 2005 to December 31, 2006.

Preliminary Reconciliation of Company Interest Reserves (2)(3)
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Light and Medium Oil Natural Gas
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Proved Proved
Plus Plus
Proved Probable Probable Proved Probable Probable
(Mbbl) (Mbbl) (Mbbl) (MMcf) (MMcf) (MMcf)
---------------------------------------------------------------------------
Dec 31, 2005 9,015 2,645 11,660 62,119 24,667 86,787
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Discoveries 1 - 1 1,815 701 2,515
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Extensions 134 56 190 931 1,058 1,989
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Improved Recov. - 605 605 - 428 428
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Acquisitions - - - 109 35 144
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Dispositions - - - (94) (39) (133)
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Other Revision(4) 194 (380) (186) 7,596 (2,563) 5,033
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2006 Production (875) - (875) (10,345) - (10,345)
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Dec 31, 2006 (1) 8,468 2,927 11,395 62,131 24,288 86,419
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---------------------------------------------------------------------------
Natural Gas Liquids Oil Equivalent
---------------------------------------------------------------------------
Proved Proved
Plus Plus
Proved Probable Probable Proved Probable Probable
(Mbbl) (Mbbl) (Mbbl) (Mboe) (Mboe) (Mboe)
---------------------------------------------------------------------------
Dec 31, 2005 1,665 505 2,170 21,033 7,262 28,295
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Discoveries 13 8 21 316 125 441
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Extensions 15 8 23 304 241 545
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Improved Recov. - 19 19 - 695 695
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Acquisitions 1 1 2 20 6 26
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Dispositions - - - (16) (6) (22)
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Other Revision(4) (220) (193) (413) 1,240 (1,000) 240
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2006 Production (162) - (162) (2,761) - (2,761)
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Dec 31, 2006 (1) 1,313 347 1,660 20,137 7,321 27,458
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The net present values of future net revenues summarized in the following
table are based on Sproule's December 31, 2006 pricing forecast.

Summary Table of Net Present Values of Future Net Revenues, MM$ (1)(2)
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Net Present Value Proved Developed Total Total Proved
discounted at: Producing Proved Plus Probable
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0% 391.3 491.1 688.7
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5% 302.7 366.6 473.3
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10% 254.9 300.8 372.0
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15% 223.5 258.6 311.4
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1. As per Sproule Associates Limited reserves evaluation for Vault Energy
Trust, effective December 31, 2006 using Sproule December 31, 2006
escalated price forecast which can be found at
http://www.sproule.com/prices/downloads/December_31_2006.pdf.
2. Reserves evaluated pursuant to NI 51-101.
3. Company Interest Reserves include Working Interest Reserves and Royalty
Interest Reserves.
4. Other Revisions include economic factors, pricing and technical
revisions. A significant portion of the technical reserve revisions are
related to capital investment


OPERATIONAL HIGHLIGHTS & OUTLOOK

- Vault estimates 2006 annualized production of 7,566 BOE/D

- Drilled 12 gross/ 7.5 net well, resulting in 4.1 net oil wells/ 3.4 net gas wells and 0 net D&A wells for an overall success rate of 100%

- Vault currently has 350 BOE/D of shut-in volumes expected to be onstream by the beginning of Q2 2007

Vault remains focused on improving our business and taking advantage of our $460 million in accumulated tax pools. Capital spending for 2007 is anticipated to be approximately $25 million. The Company plans to spend approximately $15 million in the first half of the year with $10 million targeted toward longer lead time projects in the second half of the year. Of the $25 million, $13.5 million is slated for drilling, completion, equipping and tie-ins. In the event that commodity prices are stronger in the second half of the year, Vault has an undeveloped land base of 132,000 net acres and an inventory of projects that can be accelerated to take advantage of stronger commodity prices.

Vault's production guidance for 2007 remains 7,000-7,200 BOE/D. Current production is estimated to be approximately 7,000 BOE/D with 350 BOE/D that is shut-in and anticipated to be on-stream by the end of March.

Vault's 2007 business plan uses a price forecast of $7.50/mcf AECO and US$60.00/bbl WTI. Vault continues to actively hedge a portion of its production to mitigate commodity price volatility. As previously disclosed, Vault has various natural gas hedges in place for roughly 35% - 40% of its net volumes through October 31, 2007 with a minimum floor price of CAD $7.35/mcf and approximately 45% of its net oil production volumes hedged for 2007 in a participating hedge with a floor price of CAD $68.00/bbl.

The Company's bank debt and working capital deficiency at December 31, 2006 was approximately $73.4 million. The Company had drawn $63.4 million of its $125 million credit facility at year end. In addition to the bank facility the Company has 2 separate convertible debentures issues totaling $98.7 million.

Vault Energy Trust is a conventional oil and gas income trust. Vault units are traded on the Toronto Stock Exchange (TSX) under the symbol "VNG.UN". Convertible debentures of Vault trade on the TSX under the symbols"VNG.DB", and "VNG.DB.A".

This guidance document may contain forward-looking statements regarding the business and operations of Vault Energy Trust, its subsidiaries and affiliates (collectively, "Vault"). All statements other than statements of historical fact contained here are forward-looking statements, and there can be no assurance that the plan, intentions or expectations upon which these forward-looking statements are based will occur. Please refer to Vault's public disclosure documents for more information on these risks and uncertainties as they apply to Vault.

Contact Information

  • Vault Energy Trust
    Robert Jepson
    President and Chief Executive Officer
    (403) 444-9662
    Website: www.vaultenergy.com
    or
    Vault Energy Trust
    Greg Fisher
    VP, Finance and Chief Financial Officer
    (403) 444-9651
    Website: www.vaultenergy.com
    or
    Vault Energy Trust
    Nicole Collard
    Investor Relations
    (403) 444-9657
    Website: www.vaultenergy.com