Waldron Energy Corporation
TSX : WDN

Waldron Energy Corporation

March 17, 2011 13:31 ET

Waldron Energy Announces 2010 Year End Reserves

CALGARY, ALBERTA--(Marketwire - March 17, 2011) - Waldron Energy Corporation (TSX:WDN) ("Waldron" or the "Corporation") is pleased to provide the following preliminary results from its annual independent reserve evaluation completed by GLJ Petroleum Consultants for all of the Corporation's properties effective December 31, 2010 (the "GLJ Report"). These estimates were prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Waldron anticipates releasing its audited year-end financial statements and Annual Information Form including a statement on reserves data and other information specified in NI 51-101, on or about March 30, 2011. 

Highlights

  • Total Proved Reserves increased by approximately 5 times (480%) from 1,162 to 6,745 thousand barrels of oil equivalent;
  • Total Proved plus Probable Reserves increased by approximately 6 times (576%) from 1,931 to 13,056 thousand barrels of oil equivalent;
  • Waldron's net asset value was $4.57 per share basic and $3.91 per diluted share at December 31, 2010;
  • Finding, development and acquisition costs, excluding changes in future development capital, were $9.94 per boe on a total proved basis and $5.31 per boe on a total proved plus probable basis;
  • Finding, development and acquisition costs, including changes in future development capital of $38 million total proved and $77 million total proved plus probable, were $15.93 per boe on a total proved basis and $11.78 per boe on a total proved plus probable basis;
  • Finding and development costs(6), including changes in future development capital, were $14.86 per boe on a total proved basis and $10.57 per boe on a total proved plus probable basis; and
  • The Corporation increased its Reserves Life Index on a Total Proved basis to 7.1 years and on a Total Proved plus Probable Reserves basis to 13.8 years, based on 2010 year end production of 2,600 boepd.

Reserves

The following table summarizes the Corporation's gross and net interests in proved and probable reserves at December 31, 2010 as assessed in the GLJ Report using their January 1, 2011 forecast prices and cost assumptions.

  RESERVES SUMMARY (1)  
  OIL & NGLS   NATURAL GAS(2)   TOTAL OIL EQUIVALENT(3)  
RESERVES CATEGORY Gross   Net   Gross   Net   Gross   Net  
(Mbbl ) (Mbbl ) (Mmcf ) (Mmcf ) (Mboe ) (Mboe )
Proved                        
Producing Developed 686   526   13,807   11,797   2,988   2,493  
  Non-Producing 121   85   4,235   3,578   826   682  
  Undeveloped 644   480   13,724   11,852   2,931   2,455  
TOTAL PROVED 1,450   1,090   31,766   27,227   6,745   5,629  
PROBABLE 1,376   1,014   29,608   24,594   6,311   5,113  
TOTAL PROVED PLUS PROBABLE 2,827   2,105   61,374   51,821   13,056   10,742  
  1. Numbers in this table are subject to rounding.
  2. Natural gas volumes include solution gas volumes associated with the Corporation's light and medium crude oil reserves.
  3. Natural gas is converted to barrels of oil equivalent ("boe") at a ratio of six thousand standard cubic feet to one barrel of oil.

Net Present Values of Future Net Revenue

The following table summarizes Waldron's share of the net present value of future net revenue attributable to its reserves before taxes but prior to the provision for interest and general and administrative expenses.

  NET PRESENT VALUES OF FUTURE NET REVENUE(1)(2)(3)(4)  
  BEFORE INCOME TAXES DISCOUNTED AT (%/year)  
RESERVES CATEGORY 0 % 5 % 10 % 15 %
(M$ ) (M$ ) (M$ ) (M$ )
Proved                
  Producing 62,063   50,773   43,420   38,211  
  Developed Non-Producing 14,481   10,869   8,677   7,200  
  Undeveloped 42,748   29,907   21,323   15,329  
TOTAL PROVED 119,292   91,549   73,420   60,739  
PROBABLE 131,909   89,527   65,242   49,738  
TOTAL PROVED PLUS PROBABLE 251,201   181,076   138,662   110,477  
  1. Gross reserves are the Corporation's total interest share before the deduction of royalties and without including any royalty interest of the Corporation.
  2. Utilizes GLJ Petroleum Consultants escalated price forecasts as of January 1, 2011.
  3. Values are net of down-hole abandonment liabilities for reserves wells. Non-reserve well and facility abandonment, surface reclamation and salvage values are not included.
  4. Numbers in this table are subject to rounding.
  5. The estimated values do not represent fair market value.
  6. 2010 Finding and Development ("F&D") costs have been presented in accordance with NI 51-101. The Corporation recapitalized Triton Energy Corp. on December 31, 2009 and therefore the three year disclosure under NI 51-101 for F&D was not considered applicable to Waldron. The aggregate of the exploration and development costs incurred in the most recent financial year and the changes during that year in estimated future development costs generally will not reflect total finding and development related to reserves additions for that year.

Net Asset Value ("NAV")

The following table summarizes the Corporation's net asset value at December 31, 2010:

Net Asset Value (December 31, 2010) 2010  
(000's)      
Proved plus Probable NI 51-101 discounted at 10% $ 138,662  
Undeveloped Land, Seismic and Other Assets (internal estimate)   17,300  
Net Debt(1)   (17,266 )
Net Asset Value - Basic $ 138,696  
Basic Common Shares Outstanding (at Dec. 31, 2010)   30,345  
Net Asset Value - Basic (per share)(2) $ 4.57  
Net Asset Value - Basic $ 138,696  
Funds Received from Exercise of Dilutives   17,384  
Net Asset Value - Fully Diluted $ 156,080  
Diluted Shares Outstanding (at Dec. 31, 2010)   39,923  
Net Asset Value - Fully Diluted (per share)(2) $ 3.91  
  1. Unaudited. The Corporation's 2010 audited financial statements will be released on or about March 30, 2011.
  2. Net Asset Value numbers are at December 31, 2010 and do not incorporate drilling results during the first quarter of 2011 and the February 2011 financing by way of a private placement for 1,334,000 common shares at a price of $3.75 per share for gross consideration of $5 million. After giving effect to the financing: Net Asset Value – Basic (per share) = $4.57 and Net Asset Value – Diluted (per share) = $3.90.
  3. The estimated values do not represent fair market value.

Outlook

On March 8, 2011 Waldron announced its Ricinus 12-11-36-9W5 well has been completed and tested at 10.2 MMcf per day and the Corporation successfully deepened, logged and cased its Strachan 14-30-37-8W5 well. Additionally, on February 17, 2011 the Corporation announced the successful Strachan 7-29-37-8W5 well which tested at 6.2 MMcf per day. All three vertical wells are expected to be placed on production within three weeks.

Additionally, Waldron spud the Strachan 16-29-37-8W5 well (the "16-29 well") on March 8, 2011, targeting the Ellerslie and Glauconite Formations. The 16-29 well is anticipated to be a twenty-five day drill. The Corporation also plans to deepen an existing wellbore at Strachan 16-30-37-8W5 (the "16-30 well") targeting the Ellerslie. The fifty meter deepening and completion operations at the 16-30 well are expected to be finished by mid April 2011. 

Investor Information

Waldron is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the Toronto Stock Exchange under the trading symbol "WDN." Additional information regarding Waldron is available under the Corporation's profile at www.sedar.com or at the Corporation's website, www.waldronenergy.ca.

Forward Looking and Cautionary Statements

This news release contains forward-looking statements including opinions, assumptions, estimates and management's assessment of future plans and operations, production, proved and proved plus probable reserves, commodity prices, estimated finding and development costs and the effects on cash flows attributable to the new royalty incentives. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "will", "project", "plan", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. In addition, statements regarding reserves are deemed to be forward-looking statements as they involve estimates and assumptions as to the expectation that the reserves can be economically exploited in the future. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Corporation believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, risks associated with oil and gas exploration, development, exploitation, results from testing, production, marketing and transportation, the volatility of oil and gas prices, currency fluctuations, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, changes in oil and gas acquisition and drilling programs, delays resulting from inability to obtain required regulatory approvals, delays resulting from inability to obtain drilling rigs and other services, delays in tie-in operations, results from testing, environmental risks, competition from other producers, imprecision of reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by Waldron with securities regulatory authorities. Readers are cautioned not to place undue reliance on forward-looking statements, as no assurances can be given as to future results, levels of activity or achievements and actual results may differ materially from those anticipated in forward-looking statements. Except as required by applicable securities laws, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.

Certain financial information included in this news release for the year ended December 31, 2010, including exploration and development expenditures used in the calculation of finding and development costs and net debt used in the calculation of net asset value are based on estimated unaudited financial results for the period then ended and may change upon completion of the audited financial statements for the year ended December 31, 2010. Although Waldron believes such estimates are reasonable, the changes could be material.

Disclosure provided herein in respect of barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand standard cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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