Breaker Energy Ltd. more than doubles light oil reserves per share and significantly increases net asset value in 2007



    CALGARY, March 10 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX: WAV.A and WAV.B) achieved outstanding per share reserves and value
growth in 2007 and is pleased to provide its 2007 reserves information (NI
51-101 compliant). As Breaker plans to announce its audited 2007 financial
statements after the close of the market on March 26, 2008, certain financial
estimates have been made herein to facilitate discussion of its 2007 capital
program. Readers are advised that these financial estimates are subject to
audit and may be revised as necessary.

    Highlights
    ----------
    Breaker grew its reserves in 2007 by 44% to 18.0 million boe. The Company
achieved strong per share reserves and net asset value growth on a cost
effective basis. Through maintaining fiscal discipline and selecting quality
capital investment opportunities, Breaker is pleased to report the following
results for 2007:

    
    Growth in Proved plus Probable light oil reserves per fully
     diluted share                                                      112%
    Growth in Proved reserves per fully diluted share                    49%
    Growth in Proved plus Probable reserves per fully diluted share      39%

    Estimated Net Asset Value (NAV) per fully diluted share:
    Using 5% BT (forecast pricing)    $10.04/share
                                      (77% increase from 2006 year end)
    Using 10% BT (forecast pricing)   $7.56/share
                                      (61% increase from 2006 year end)

    FD&A Proved (without future capital)                          $10.64/boe
    FD&A Proved plus Probable (without future capital)            $ 8.74/boe
    FD&A Proved (including change in future capital
     discounted at 10%)                                           $17.06/boe
    FD&A Proved plus Probable (including change in
     future capital discounted at 10%)                            $14.88/boe
    Proved plus Probable Reserves Replacement Ratio                      4.4
    Proved plus Probable Reserve Life Index
     (est. Q4/07 average production 4,523 boe/d)                  10.9 years
    

    The results presented above are based on unaudited, estimated total
capital expenditures for 2007 of $62.5 million and unaudited, estimated 2007
production totaling 1,608,463 boe or an average of 4,407 boe/d, and forecast
pricing (Sproule December 31, 2007).

    Breaker 2007 Reserve Information
    --------------------------------
    In accordance with National Instrument 51-101 - Standards of Disclosure
for Oil and Gas Activities (NI 51-101), Sproule Associates Limited (Sproule)
prepared the Breaker Sproule Report. This report evaluated, as at December 31,
2007, 100 percent of Breaker's oil, natural gas, and natural gas liquids
reserves.
    The tables below disclose in the aggregate, the Corporation's gross and
net proved and proved plus probable reserves and Net Present Value (NPV) as
estimated in the Breaker Sproule Report. These estimates were calculated using
forecast prices and costs.
    "Forecast prices and costs" means future prices and costs used by Sproule
in the Sproule Report that are generally accepted as being a reasonable
outlook of the future, or fixed or currently determinable future prices or
costs to which the Corporation is bound.
    "Gross" reserves equate to those reserves that are referred to as
"Company Gross" reserves by the Canadian Securities Administrators (CSA) in NI
51-101. Gross Reserves are Company gross reserves, which are the Company's
working interest (operating or non-operating) share before deduction of
royalties and without including any royalty interests of the Company.
    "Net After Royalty" reserves are the Company's working interest
(operating or non-operating) share after deduction of royalty obligations plus
the Company's royalty interests in reserves.
    The net present value of future net revenue attributable to Breaker'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 Sproule. It should
not be assumed that the undiscounted or discounted net present value of future
net revenue attributable to Breaker's reserves estimated by Sproule represent
the fair market value of those reserves. The estimates of reserves and future
net revenue for individual properties may not reflect the same confidence
level as estimates of reserves and future net revenue for all properties, due
to effects of aggregations. Other assumptions and qualifications relating to
costs, prices and future production and other matters are summarized herein.
The recovery and reserve estimates of Breaker's oil, natural gas, and NGL
reserves provided herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual reserves may be greater than or
less than the estimates provided herein.

    
    Summary of Reserves and Values
    -------------------------------------------------------------------------
                             Proved                                   Total
                    Proved  Developed  Proved                        Proved
                  Developed   Non-     Undevel-   Total     Total     Plus
                  Producing producing   oped     Proved    Probable  Probable
    -------------------------------------------------------------------------
    MARKETABLE
    RESERVES
    -------------------------------------------------------------------------
    Light/Medium
     Oil (mbbls)
    -------------------------------------------------------------------------
     Gross           2,567       104     2,676    5,346      3,369     8,715
    -------------------------------------------------------------------------
    Net After
     Royalty         2,258        85     2,352    4,695      2,927     7,622
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Heavy Oil
     (mbbls)
    -------------------------------------------------------------------------
    Gross              191         0       236      427        426       852
    -------------------------------------------------------------------------
    Net After
     Royalty           172         0       186      357        351       709
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Gas (mmcf)
    -------------------------------------------------------------------------
    Gross           24,530     1,671    10,286   36,486     12,430    48,916
    -------------------------------------------------------------------------
    Net After
     Royalty        19,210     1,255     8,106   28,572      9,738    38,310
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Natural Gas
     Liquids (mbbls)
    -------------------------------------------------------------------------
    Gross              175        11        37      223         62       285
    -------------------------------------------------------------------------
    Net After
     Royalty           135         7        25      167         46       213
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Oil Equivalent
     (mboe)
    -------------------------------------------------------------------------
    Gross            7,021       393     4,663   12,077      5,928    18,005
    -------------------------------------------------------------------------
    Net After
     Royalty         5,767       301     3,913    9,981      4,948    14,929
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    BEFORE TAX PRESENT VALUE ($MM)
    -------------------------------------------------------------------------
    0%             236,025     7,002   140,682  383,709    213,821   597,531
    -------------------------------------------------------------------------
    5%             187,034     5,808    86,688  279,529    121,642   401,172
    -------------------------------------------------------------------------
    10%            159,319     4,908    58,527  222,753     79,822   302,575
    -------------------------------------------------------------------------
    15%            140,741     4,210    41,508  186,459     56,565   243,024
    -------------------------------------------------------------------------
    20%            127,106     3,654    30,216  160,977     41,975   202,952
    -------------------------------------------------------------------------

    The above summary of reserves and values was based on the following price 
and cost assumptions:

    Summary of Pricing and Inflation Rate Assumptions (Forecast Prices and
    Costs) Sproule December 31, 2007
    -------------------------------------------------------------------------
                        Edmonton  Hardisty  Cromer
                        Par Price  Heavy    Medium  Natural
                WTI        40       12       29.3   Gas AECO Infla-
              Cushing   degrees  degrees   degrees   Spot     tion  Exchange
            (Oklahoma)    API      API       API    Price     Rate    Rate
    -------------------------------------------------------------------------
                        ($Cdn/   ($Cdn/    ($Cdn/   ($Cdn/            ($US/
    Year     ($US/bbls)   bbls)    bbls)     bbls)   mmbtu)  (%/yr)    $Cdn)
    -------------------------------------------------------------------------
    2008          89.61    88.17    54.67    75.83     6.51     2.0    1.000
    -------------------------------------------------------------------------
    2009          86.01    84.54    52.42    72.71     7.22     2.0    1.000
    -------------------------------------------------------------------------
    2010          84.65    83.16    51.56    71.52     7.69     2.0    1.000
    -------------------------------------------------------------------------
    2011          82.77    81.26    50.38    69.89     7.70     2.0    1.000
    -------------------------------------------------------------------------
    2012          82.26    80.73    50.05    69.43     7.61     2.0    1.000
    -------------------------------------------------------------------------
    2013          82.81    81.25    50.38    69.88     7.78     2.0    1.000
    -------------------------------------------------------------------------
    2014          84.46    82.88    51.39    71.28     7.96     2.0    1.000
    -------------------------------------------------------------------------
    2015          86.15    84.55    52.42    72.71     8.14     2.0    1.000
    -------------------------------------------------------------------------
    2016          87.87    86.25    53.47    74.17     8.32     2.0    1.000
    -------------------------------------------------------------------------
    2017          89.63    87.98    54.55    75.66     8.51     2.0    1.000
    -------------------------------------------------------------------------
    Thereafter +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr   1.000
    -------------------------------------------------------------------------

    Breaker Reserves Reconciliation, Gross (Forecast Prices and Costs,
    unaudited)

    -------------------------------------------------------------------------
                                                      Total     Total Proved
    Oil Equivalent (mboe)                            Proved    Plus Probable
    -------------------------------------------------------------------------
    Opening Balance, Gross                            7,722           12,318
    -------------------------------------------------------------------------
    Technical                                         1,651            1,784
    -------------------------------------------------------------------------
    Extensions and Discoveries                        4,322            4,815
    -------------------------------------------------------------------------
    Economic Factors                                    -26              -22
    -------------------------------------------------------------------------
    Improved Recovery                                     0              699
    -------------------------------------------------------------------------
    Acquisition                                          18               20
    -------------------------------------------------------------------------
    Production                                       (1,609)          (1,609)
    -------------------------------------------------------------------------
    Closing Balance, Gross                           12,078           18,005
    -------------------------------------------------------------------------

    Breaker Finding, Development, and Acquisition (FD&A) Costs (unaudited)

    -------------------------------------------------------------------------
                                                                 Proved Plus
    Capital Costs ($MM) unaudited                    Proved         Probable
    -------------------------------------------------------------------------
    2007 Exploration, Development and Acquisition
     Capital Expenditures                              62.5             62.5
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Future Development Costs year end 2007 (FDC)
     (disc@10%)                                     62.3             92.3
    -------------------------------------------------------------------------
    Future Development Costs year end 2006 (FDC)
     (disc@10%)                                     24.5             48.4
    -------------------------------------------------------------------------
    Change in FDC (disc@10%)                        37.8             43.9
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    2007 Capital + Change in FDC (disc@10%)        100.3            106.4
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                                 Proved Plus
    FD&A Costs ($/boe) unaudited                     Proved         Probable
    -------------------------------------------------------------------------
    Exploration, Development and Acquisition
     without FDC                                      10.64             8.74
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Exploration, Development and Acquisition
     with change in FDC (disc@10%)                 17.06            14.88
    -------------------------------------------------------------------------
    

    Breaker's exploration and development efforts on properties acquired
during previous years added significant production and reserve additions which
was recognized at year end 2007. These activities yielded reserve additions at
lower costs compared to previous year's additions which were primarily based
on acquisition costs. Breaker will continue to develop its asset base with the
expectation of further additions to both production and reserves in the
future, and in accordance with its business strategy will obtain new growth
platforms for continued growth.

    
    Breaker's netback for 2007 was $30.48/boe (unaudited). Using this
    netback the following recycle ratios are calculated:

    -------------------------------------------------------------------------
                                                                 Proved Plus
    Recycle Ratio, unaudited                         Proved         Probable
    -------------------------------------------------------------------------
    For FD&A without FDC                                2.9              3.5
    -------------------------------------------------------------------------
    For FD&A incl. change in FDC (disc@10%)          1.8              2.0
    -------------------------------------------------------------------------

    Breaker's current netback, at higher oil and gas prices than those
experienced in 2007, is estimated to be well in excess of $40/boe (unaudited).
 Accordingly current recycle ratios would be higher than displayed in the
above table which utilizes 2007 netbacks.
    Breaker's reserves quality improved in the form of a higher percentage of
Proved Reserves, as demonstrated by the following metrics:

    -------------------------------------------------------------------------
                                     Percentage of
                               Total Proved Plus Probable  Percentage Change
                               --------------------------
    Year                        2006                 2007
    -------------------------------------------------------------------------
    Proved Total                62.7                 67.1                  7
    -------------------------------------------------------------------------
    Probable Total              37.3                 32.9                (12)
    -------------------------------------------------------------------------
    Proved Plus Probable       100.0                100.0
    -------------------------------------------------------------------------

    Breaker 2007 Net Asset Value per Fully Diluted Share Information
    (unaudited)

    Using Reserve Value at December 31, 2007 - Forecast Pricing and Costs:

    -------------------------------------------------------------------------
    ($MM except share amounts)                        5% BT           10% BT
    -------------------------------------------------------------------------
    Proved Plus Probable Reserve Value
     (incl. future capital)                           401.2            302.6
    -------------------------------------------------------------------------
    Undeveloped Land (197,803 acres
     @ $150/acre)                                   29.7             29.7
    -------------------------------------------------------------------------
    Seismic                                             9.4              9.4
    -------------------------------------------------------------------------
    Estimated Net Debt                                (51.2)           (51.2)
    -------------------------------------------------------------------------
    Option Proceeds                                     9.9              9.9
    -------------------------------------------------------------------------
    Total Net Assets                                  399.0            300.4
    -------------------------------------------------------------------------
    Fully Diluted Shares Outstanding (MM)              39.7             39.7
    -------------------------------------------------------------------------
    Estimated Net Asset Value per
     Fully Diluted Share ($)                          10.04             7.56
    -------------------------------------------------------------------------
    

    In addition to the approximately 197,803 net acres of undeveloped land
that Breaker has an ownership interest in, the Company also had access to
approximately 115,000 acres via farm-in.

    New Royalty Framework
    ---------------------
    On October 25, 2007, the Government of Alberta announced a "New Royalty
Framework" for oil and natural gas royalties in the province of Alberta. New
royalty rates will apply to production in Alberta effective January 1, 2009.
Breaker requested that Sproule estimate the impact to the reserve evaluation
based upon the currently released information on the new royalty regime. As of
December 31, 2007, the province had not introduced the enabling legislation
nor had they provided enough clarity on a number of issues for Sproule to
provide a precise calculation of net reserves and before tax net present value
under the new regime. It is possible that the announced changes may be amended
before coming into force. Under the forecast price assumptions, Sproule has
estimated that the change to the before tax net present value, discounted at
10 percent, on proved plus probable reserves would be a reduction of
approximately 11 percent, as at December 31, 2007.
    The estimated net asset value reduction has increased from the previously
announced figure primarily due to advancing the date of the discounted cash
flow stream by a year.

    Operational Update
    ------------------
    Breaker is currently very active with its development and exploration
programs. At the beginning of March, Breaker had 4 drilling rigs drilling its
oil prospects at Irricana, Girouxville and East Prairie. In addition, the
company has commenced its 3-D seismic program at Monias, British Columbia.
Monias is a high-impact exploration project targeting a 100% working interest
Leduc reef prospect that has an unrisked potential target size of 1 tcf.

    
    Summary
    -------
    In 2007 Breaker added 7.2 million boe of high-quality oil and gas Proved
plus Probable Reserves via total capital expenditures of approximately
$62.5 million (unaudited). Breaker continues to execute on its business plan
of making strategic acquisitions balanced with a focused exploration,
development and exploitation plan, which resulted in the following at year end
2007:

    -   Proved plus Probable reserves growth to 18.0 million boe, a 44%
        increase over year end 2006.
    -   Increased Proved plus Probable reserves per fully diluted share by
        39% in 2007.
    -   Net Asset Value (BT 5%) of $10.04 per fully diluted share based on
        forecast price assumptions.
    -   FD&A Proved (without future capital) of $10.64/boe in 2007.
    -   FD&A Proved plus Probable (without future capital) of $8.74/boe in
        2007.
    -   FD&A Proved (including change in future capital discounted at 10%) of
        $17.06/boe in 2007.
    -   FD&A Proved plus Probable (including change in future capital
        discounted at 10%) of $14.88/boe in 2007.
    -   Proved Recycle Ratio (including change in future capital discounted
        at 10%) of 1.8
    -   Proved plus Probable Recycle Ratio (including change in future
        capital discounted at 10%) of 2.0
    -   Proved plus Probable Reserve Life Index (based on est. Q4 2007
        average production) of 10.9 years.
    -   Current inventory of more than 300 net drilling locations for oil and
        natural gas.
    -   Breaker maintains an excellent balance sheet with a bank line of $95
        million and estimated debt/Q4 annualized cash flow of 1.2 times.
    

    Breaker Energy Ltd. is a junior oil and gas company focused on creating
shareholder value by growing per share production and reserves through
acquisitions and a focused exploration, development and exploitation plan.
    Breaker has 36,269,504 Class A shares and 900,000 Class B shares
outstanding.
    Breaker Energy trades on the TSX under the symbols WAV.A and WAV.B.

    Forward-looking Statements

    This press release contains forward-looking statements including
management's assessment of future plans and operations, expectations of future
production, cash flow and earnings. These statements are based on current
expectations that involve a number of risks and uncertainties, which could
cause actual results to differ materially from those anticipated. These risks
include, but are not limited to: the risks associated with the oil and gas
industry (e.g. operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and expenses and
health, safety and environmental risks), acquisitions, commodity price and
exchange rate fluctuation and uncertainties resulting from competition from
other producers and ability to access sufficient capital from internal and
external sources. Additional information on these and other factors that could
affect Breaker's operations and/or financial results are included in Breaker's
reports on file with Canadian securities regulatory authorities. The
forward-looking statements contained in this press release are made as of the
date hereof and Breaker 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.

    Note: Boe means barrel of oil equivalent on the basis of 1 boe to 6,000
cubic feet of natural gas. Boe's may be misleading, particularly if used in
isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
Boe/d means barrel of oil per day.
    In this press release: (i) mmboe means million boe; (ii) boe/d means boe
per day; (iii) bbls/d means barrels per day; (iv) mcf means thousand cubic
feet; (v) mmcf means million cubic feet; (vi) mcf/d means thousand cubic feet
per day; and (vii) mmcf/d means million cubic feet per day.

    The TSX does not accept responsibility for the adequacy or accuracy of
    this release.

    %SEDAR: 00021180E




For further information:

For further information: Dan O'Neil, President & Chief Executive
Officer, (403) 215-5264 or Max Lof, Vice President, Finance & Chief Financial
Officer, (403) 215-5264, info@breakerenergy.com, www.breakerenergy.com

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BREAKER ENERGY LTD.

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