Highlights:
- Bonterra increased its reserve base in 2009 by 5.0 percent on a total
proved (TP) basis and 14.7 percent on a proved plus probable (P+P)
basis to total 25.3 million barrels of oil equivalent (boe) (2008 -
24.1 MMboe) and 35.8 million boe (2008 - 31.2 MMboe), respectively,
through development of its Pembina Cardium horizontal drilling
program, improved operations, and acquisitions (TP 151 Mboe; P+P 269
Mboe), and offset by production (1,823 Mboe) and divestments (TP
1,011 Mboe; P+P 1,152 Mboe).
- A total of 4.1 million boe (TP) and 7.6 million boe (P+P) of reserves
were added which equates to 2.2 and 4.1 times 2009 production,
respectively.
- Reserves per share increased 8.7 percent to 1.99 boe per share at
December 31, 2009 compared to 1.83 boe per unit in 2008 on a P+P
basis.
- Reserves split of 76% oil and ngl's and 24% natural gas on a TP basis
and 77% oil and ngl's and 23% natural gas on a P+P basis.
- Average daily production in 2009 totaled 4,994 boe per day, an
increase of 14.9 percent when compared with 2008 levels. Average
daily production in the fourth quarter of 2009 totaled 4,879 boe per
day, an increase of 6.4 percent when compared to the fourth quarter
of 2008.
- Bonterra's low decline production is supported by its high-quality
reserve base. The reserve life index (RLI) in 2009 remained
relatively unchanged at 14.2 years on a TP basis and 20.1 years on a
P+P basis versus the 2008 RLI of 14.2 years on a TP basis and 18.7
years on a P+P basis.
- Bonterra continues to focus on the efficient development of its asset
base. Finding, development and acquisition (FD&A) costs including
future development costs in 2009 continue to be among the lowest in
the industry. FD&A costs including acquisitions (and net of
dispositions) in 2009 were $13.25 per boe on a TP basis and $8.93 per
boe on a P+P basis compared with the previous three year average
(2006-2008) of $12.30 per boe on a TP basis and $9.45 per boe on a
P+P basis.
- A total of 2.2 million boe on a TP basis and 6.6 million boe on a P+P
basis of net reserves have been assigned to 28.1 net (34 gross)
horizontal wells in the company's Pembina Cardium horizontal project.
Since there is minimal production history and the development is
intentionally located beyond existing Cardium pool production to
reduce the possibility of depletion and water production, reserves
could only be assigned to a limited number of locations at this time
as per NI 51-101 standards. Once additional drilling is completed and
additional production history is available, additional reserves could
be assigned. Management believes that geological information
indicates that the undeveloped lands that have not been assigned
reserves have similar characteristics to currently producing lands to
which reserves have been assigned.
Corporate Reserves Information:
Bonterra engaged the services of Sproule Associates Limited to prepare a reserve evaluation with an effective date of
Summary of Oil and Gas Reserves as of December 31, 2009
Light and Natural
Medium Natural Gas
Oil Gas Liquids BOE
Gross Gross Gross Gross
Reserve Category: (Mbbl) (MMcf) (Mbbl) (Mboe)
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PROVED
Developed Producing 14,248 32,103 1,271 20,869
Developed Non-Producing 220 760 7 354
Undeveloped 3,284 3,779 190 4,104
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TOTAL PROVED 17,752 36,642 1,468 25,327
PROBABLE 7,923 12,896 425 10,497
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TOTAL PROVED PLUS PROBABLE 25,675 49,539 1,893 35,824
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Reconciliation of Company Gross Reserves by Principal Product Type
as of December 31, 2009
Light and Medium Oil and
Natural Gas Liquids Natural Gas BOE
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Gross Gross Gross
Proved Proved Proved
Gross Plus Gross Plus Gross Plus
Proved Probable Proved Probable Proved Probable
(Mbbl) (Mbbl) (Mmcf) (Mmcf) (Mboe) (Mboe)
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December 31, 2008 17,991 22,867 36,571 50,246 24,086 31,241
Extension 1,983 6,062 1,024 2,540 2,154 6,485
Improved recovery 0 0 0 0 0 0
Technical revisions 2,138 1,579 3,350 1,034 2,696 1,751
Discoveries 0 0 0 0 0 0
Acquisitions 142 253 53 96 151 269
Dispositions (1,010) (1,151) (7) (9) (1,011) (1,152)
Economic factors (877) (895) (290) (309) (925) (947)
Production (1,146) (1,146) (4,059) (4,059) (1,823) (1,823)
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December 31, 2009 19,220 27,568 36,642 49,539 25,327 35,824
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Summary of Net Present Values of Future Net Revenue as of December 31,
2009
Net Present Values of Future Net Revenue
Before Income Taxes
Discounted at (%/Year)
($ Millions) 0% 5% 10% 15% 20%
Reserve Category:
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PROVED
Developed Producing 1,045.3 580.8 407.6 319.1 264.8
Developed Non-Producing 15.8 13.0 11.2 9.9 9.0
Undeveloped 135.5 102.4 79.2 62.3 49.7
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TOTAL PROVED 1,196.6 696.2 498.1 391.4 323.4
PROBABLE 702.9 260.6 135.6 84.7 58.4
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TOTAL PROVED PLUS PROBABLE 1,899.5 956.9 633.7 476.1 381.8
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Net Present Values of Future Net Revenue
After Income Taxes
Discounted at (%/Year)
($ Millions) 0% 5% 10% 15% 20%
Reserve Category:
-------------------------------------------------------------------------
PROVED
Developed Producing 903.8 533.5 387.5 309.1 259.4
Developed Non-Producing 11.8 10.6 9.6 8.9 8.3
Undeveloped 101.4 79.4 63.3 51.1 41.6
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TOTAL PROVED 1,017.0 623.4 460.4 369.1 309.3
PROBABLE 527.4 195.8 102.5 64.5 44.9
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TOTAL PROVED PLUS PROBABLE 1,544.5 819.2 562.9 433.7 354.2
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Commodity prices used in the above calculations of reserves are as
follows:
Edmonton Alberta Gas Edmonton Edmonton Edmonton
Year Par Price AECO-C Spot Propane Butane Pentane
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(Cdn $ (Cdn $ (Cdn $ (Cdn $ (Cdn $
per bbl) per MMBtu) per bbl) per bbl) per bbl)
2010 84.25 5.36 52.74 59.65 86.28
2011 89.99 6.21 56.33 63.72 92.16
2012 92.61 6.44 57.97 65.57 94.84
2013 96.19 7.23 60.21 68.11 98.51
2014 98.13 7.98 61.43 69.48 100.50
2015 100.11 8.16 62.67 70.89 102.53
2016 102.13 8.34 63.94 72.32 104.60
2017 104.19 8.52 65.23 73.78 106.71
2018 106.30 8.71 66.54 75.27 108.86
2019 108.44 8.90 67.89 76.79 111.06
2020 110.63 9.10 69.26 78.34 113.30
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Crude oil, natural gas and liquid prices escalate at 2 percent per year
thereafter
The Company has been active in its capital development program over the past three years. Over this time period Bonterra has incurred the following F&D and FD&A(3) Costs:
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2009 2008
2009 F&D 2008 F&D 2007 F&D Three Three
Costs per Costs per Costs per Year Year
BOE(1)(2) BOE(1)(2) BOE(1)(2) Average Average
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Proved Reserve
Additions $16.23 $7.00 $2.15 $8.46 $11.55
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Proved plus Probable
Reserve Additions $11.01 $6.82 $2.02 $6.62 $9.02
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-------------------------------------------------------------------------
2009 FD&A 2008 FD&A 2007 FD&A 2009 2008
Costs per Costs per Costs per Three Three
BOE BOE BOE Year Year
(1)(2)(3) (1)(2)(3) (1)(2)(3) Average Average
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Proved Reserve
Net Additions $13.25 $8.67 $2.74 $8.22 $12.30
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Proved plus
Probable Reserve
Net Additions $8.93 $7.47 $2.68 $6.36 $9.45
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The above figures have been calculated in accordance with National Instrument 51-101 (NI 51-101) where the 2009 F&D Costs equate to the total exploration and development costs incurred by the Company of
(1) Barrels of Oil Equivalent may be misleading, particularly if used in
isolation. A BOE conversion ratio of 6MCF:1bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
(2) The aggregate of the exploration and development costs incurred in
the most recent financial year and the change during that year in
estimated future development costs generally will not reflect total
finding and development costs related to reserve additions for that
year.
(3) FD&A costs are net of proceeds of disposal and the FD&A costs per BOE
are based on reserves acquired net of reserves disposed of.
Certain financial and operating information included in this press release for the quarter and year ended
It should not be assumed that the estimates of future net revenue presented in the above tables represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material.
Estimates of reserves and future net revenues for individual properties may not reflect the same confidence level as estimates of reserves and future net revenues for all properties due to the effects of aggregation.
Update of Pembina Cardium Horizontal Well Results
Bonterra is also pleased to present the following gross production volumes to
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Days on Oil Production Average Rate
Well ID Production (bbls) (bbls/day)
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1-25-47-3W5 364 43,453 119.4
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16-19-47-2-W5 182 26,697 146.7
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16-13-47-3W5 81 2,254 27.8
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8-30-47-2W5 77 21,257 276.1
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16-25-47-3W5 30 7,939 264.6*
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12-24-47-3W5 30 2,436 81.2
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16-27-47-5W5 29 4,361 150.4
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* Flowing - well placed on pump February 2, 2010, and is producing at
higher rates.
Subject to commodity prices and regulatory policies such as the Alberta competition review, Bonterra is projecting 2010 capital expenditures of
Caution Regarding Engineering Terms:
Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a boe conversion ration of 6 MCF to 1 barrel has been used in all cases in this disclosure. This boe conversion ratio is based on an energy equivalency conversion method primarily available at the burner tip and does not represent a value equivalency at the wellhead.
Caution Regarding Forward Looking Information:
Certain information set forth in this press release, including management's assessment of Bonterra's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Bonterra's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Bonterra's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements, and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bonterra will derive therefrom. Bonterra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
%SEDAR: 00003132E