Vero Energy Inc. reserves increase 91% to 25.4 MMBOE in 2008



    
    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
    THE UNITED STATES/
    

    CALGARY, Feb. 11 /CNW/ - Vero Energy Inc. ("Vero" or "the Company") (TSX:
VRO) is pleased to announce the results of its independent reserves evaluation
effective December 31, 2008 as prepared by Sproule Associates Limited in
accordance with the disclosure requirements prescribed by National Instrument
51-10, Standards of Disclosure for Oil and Gas Activities.

    
    Highlights
    ----------

    -   Proved plus probable reserves increased 91% to 25,443 MBOE from a
        combination of drill bit success and strategic acquisitions,
        resulting in:

           -  Growth per fully diluted share of 49%

           -  Proved plus probable finding, development and acquisition costs
              of $12.11/boe excluding future capital and $15.78/boe including
              future capital

           -  A recycle ratio of 2.3

           -  Replacement of production of 6.3 times

    -   Proved and probable reserve life index (RLI) of approximately
        11.1 years based on Vero's 2008 annual production, an improvement of
        42% from 7.8 years in 2007

    -   Proved reserves increased 85% to 17,717 MBOE resulting in:

           -  An increase of 45% per fully diluted share

           -  Proved finding, development and acquisition costs of $16.70/boe
              excluding future capital and $20.83/boe including future
              capital

           -  A recycle ratio of 1.7

    -   The net present value of Vero's estimated future net revenue based on
        forecast prices and costs and discounted at 10% before tax is
        $425.2 million, a 75% increase over December 31, 2007

    -   Proved developed producing reserves represent 61% of total proved
        reserves and total proved reserves represent 70% of the total proved
        plus probable reserves

    -   Company gross proved plus probable reserves are comprised of 81%
        natural gas, 14% natural gas liquids and 5% light oil

    -   Land holdings of 171,183 net undeveloped acres at December 31, 2008

    -   Estimated net asset value per fully diluted share of $9.40 at
        December 31, 2008, an increase of more than 38% year-over-year, based
        on the pre-tax present value of proved and probable reserves
        discounted at 10% using forecast prices, unaudited estimates of net
        debt, and internal estimates for land and seismic

    -   Vero's 2008 capital program has resulted in substantial improvements
        to well concentration risk, resulting in ever greater sustainability
        as with ongoing activity
    

    Vero has demonstrated excellent production and reserve growth per share
every year since its beginning three years ago. In the Company's history, 2008
has become a defining year where the Company has had significant reserve per
share growth, outpacing the production per share growth. From the beginning,
Vero has drilled horizontal wells in a new area using the multi-frac
completion technology. There is now sufficient history from these drilling
successes which has resulted in the near doubling of reserves year-over-year.
This performance is a reflection of the technical diligence of our team. Our
asset base is developing into a resource with a cost structure comparable to
some of the most economic plays in North America. For the first time Vero has
booked reserves for 12 proven undeveloped horizontal locations out of a total
internally estimated inventory of over 75 horizontal locations. This inventory
of horizontal locations has grown every year and continues to grow to the
point where over 70% of the planned wells in the 2009 program will be
horizontals. Including probable undeveloped locations, there are 17 horizontal
locations and 55 vertical locations on an internal inventory of over 245
locations. Vero has significantly expanded its inventory and resource through
expansion of its expertise into other productive zones. The Company's
horizontal wells have reserves booked in four different zones. Through recent
operations in 2009 the Company has already converted in excess of 500 MBOE of
proved non-producing and proved undeveloped reserves (over 800 MBOE of proved
plus probable) into the proved developed producing category from the year-end
report. The Company's portfolio is substantial and highly repeatable, which
will provide for visible and low-cost growth going forward.

    
    Company Gross Working Interest Oil and Gas Reserves and Net Present
    -------------------------------------------------------------------
    Values
    ------
    
    The following table provides summary information presented in the Sproule
Associates Limited Report effective December 31, 2008. Sproule has evaluated
100% of Vero's crude oil, NGL and natural gas reserves. Detailed reserve
information will be presented in the Company's upcoming fourth quarter and
year-end financial results press release and in the Statement of Reserves Data
and Other Oil and Gas Information section of the Company's Annual Information
Form scheduled to be filed on SEDAR on or before March 31, 2009.

    
    Company Gross Oil and Gas Reserves
    Based on Forecast Price and Costs
    -------------------------------------------------------------------------
                                  Light/     Natural               Barrels
                                  medium       gas      Natural     of oil
                                   oil       liquids      gas     equivalent
    -------------------------------------------------------------------------
                                   (Mbbl)      (Mbbl)      (MMcf)      (Mboe)

    Proved
      Producing                      705       1,492      52,153      10,889
      Non-producing                    -          87       2,965         581
      Undeveloped                     91         926      31,374       6,247
                               ----------  ----------  ----------  ----------
    Total Proved                     796       2,506      86,492      17,717
    Probable                         381       1,072      37,640       7,726
                               ----------  ----------  ----------  ----------
    Total Proved &  Probable       1,177       3,578     124,132      25,443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Notes:
    ------
    (1) In the case of BOEs, using BOEs derived by converting gas to oil in
        the ratio of six thousand cubic feet of gas to one barrel of oil
        (6 Mcf:1 bbl)
    (2) Total values may not add due to rounding
    (3) Company Gross consists of working interest before deduction of
        royalties payable and royalties receivable by the Company



    Net Present Values of Future Net Revenue
    Based on Forecast Prices and Costs
    -------------------------------------------------------------------------
                                                 0%          5%          10%
    -------------------------------------------------------------------------
                                                (MM$)       (MM$)       (MM$)

    Proved
      Producing                                345.6       273.9       229.3
      Non-producing                             18.2        14.7        12.3
      Undeveloped                              162.6       110.0        77.4
                                           ----------  ----------  ----------
    Total proved                               526.4       398.7       319.0
    Probable                                   271.3       159.4       106.2
                                           ----------  ----------  ----------
    Total proved and probable                  797.7       558.1       425.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Notes:
    ------
    (1) Total values may not add due to rounding
    (2) Net present values are before tax
    (3) Forecast pricing used is a model based on an average of the published
        price forecasts of four engineering firms effective December 31, 2008
        (AJM, Sproule, McDaniel and GLJ)
    (4) Cash flows include the effects of the New Royalty Framework and,
        where applicable, the Transitional Royalty program
    (5) It should not be assumed that the net present values of future net
        revenues estimated by Sproule represent fair market value of the
        reserves. There is no assurance that the forecast price and cost
        assumptions will be attained and variances could be material
    


    FINDING, DEVELOPMENT AND ACQUISITION COSTS ("FD&A")

    Vero's FD&A costs for 2008, 2007 and the three year average are presented
in the tables below. The costs used in the FD&A calculation are the capital
costs related to: land acquisition and retention; drilling; completions;
tangible well site; tie-ins; and facilities, plus the change in estimated
future development costs as per the independent reserve report. Acquisition
costs are net of any proceeds from dispositions of properties. Due to the
timing of capital costs and the subjectivity in the estimation of future
costs, 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. The reserves used in this
calculation are company interest reserve additions, including revisions. The
2008 costs are unaudited as the financial results are in the process of being
finalized.


    
    Proved Finding &                                                 Since
     Development Costs             2008        2007      3 Year    Inception
    -------------------------------------------------------------------------
    Capital expenditures
     (excluding acquisitions,
     unaudited, 000's)           105,788      68,932     231,746     239,541
    Change in future capital
     (000's)                      43,095      11,990      53,462      59,931
    -------------------------------------------------------------------------
    Total capital for F&D
     (unaudited 000's)           148,883      80,922     285,208     299,473
    Reserve additions, excluding
     acquisitions (mboe)           6,819       5,194      15,169      16,279
    Proved F&D costs - including
     future capital ($/boe)        21.83       15.58       18.80       18.40
    Proved F&D costs - excluding
     future capital ($/boe)        15.51       13.27       15.28       14.71
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Recycle ratio
      Including future capital       1.6         1.8         1.7         1.7
      Excluding future capital       2.3         2.1         2.1         2.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Proved plus Probable                                             Since
     Finding & Development Costs   2008         2007     3 Year    Inception
    -------------------------------------------------------------------------
    Capital expenditures
     (excluding acquisitions,
     unaudited, 000's)           105,788      68,932     231,746     239,541
    Change in future capital
     (000's)                      52,892       7,604      72,835      80,191
    -------------------------------------------------------------------------
    Total capital for F&D
     (unaudited 000's)           158,680      76,536     304,581     319,732
    Reserve additions, excluding
     acquisitions (mboe)           9,902       6,784      20,648      22,148
    Proved plus Probable F&D
     costs - including
     future capital ($/boe)        16.03       11.28       14.75       14.44
    Proved plus Probable F&D
     costs - excluding future
     capital ($/boe)               10.68       10.16       11.22       10.82
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Recycle ratio
      Including future capital       2.2         2.4         2.1         2.2
      Excluding future capital       3.3         2.7         2.8         2.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Proved Finding,
     Development &                                                   Since
     Acquisition Costs             2008        2007      3 Year    Inception
    -------------------------------------------------------------------------
    Capital expenditures
     (including acquisitions;
     net of dispositions;
     unaudited; 000's)           174,244      71,410     370,250     405,243
    Change in future capital
     (000's)                      43,095      11,990      53,462      59,931
    -------------------------------------------------------------------------
    Total capital for F&D
     (unaudited 000's)           217,339      83,400     423,713     465,175
    Reserve additions, including
     acquisitions (mboe)          10,433       5,267      20,118      22,602
    Proved F&D costs - including
     future capital ($/boe)        20.83       15.83       21.06       20.58
    Proved F&D costs - excluding
     future capital ($/boe)        16.70       13.56       18.40       17.93
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Recycle ratio
      Including future capital       1.7         1.7         1.5         1.5
      Excluding future capital       2.1         2.0         1.7         1.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Proved plus Probable
     Finding, Development &                                          Since
     Acquisition Costs             2008        2007      3 Year    Inception
    -------------------------------------------------------------------------
    Capital expenditures
     (including acquisitions;
     net of dispositions;
     unaudited; 000's)           174,244      71,410     370,250     405,243
    Change in future capital
     (000's)                      52,892       7,604      72,835      80,191
    -------------------------------------------------------------------------
    Total capital for F&D
     (unaudited; 000's)          227,136      79,014     443,085     485,434
    Reserve additions, including
     acquisitions (mboe)          14,393       6,952      26,784      30,301
    Proved plus Probable F&D
     costs - including future
     capital ($/boe)               15.78       11.37       16.54       16.02
    Proved plus Probable F&D
     costs - excluding future
     capital ($/boe)               12.11       10.27       13.82       13.37
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Recycle ratio
      Including future capital       2.3         2.4         1.9         2.0
      Excluding future capital       2.9         2.7         2.3         2.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Cautionary Statement
    --------------------
    
    Forward-Looking Statements: Certain information regarding the Company in
this news release including management's assessment of reserve and production
estimates, reserves additions and estimates of future net revenue and net
asset value may constitute forward-looking statements under applicable
securities laws and necessarily involve risks including, without limitation,
risks associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to retain
drilling rigs and other services, the timing and length of plant turnarounds
and the impact of such turnarounds and the timing thereof, delays resulting
from or inability to obtain required regulatory approvals and ability to
access sufficient capital from internal and external sources. The recovery and
reserve estimates of Vero's reserves provided herein are estimates only and
there is no guarantee that the estimated reserves will be recovered. In
addition, forward-looking statements or information are based on a number of
factors and assumptions which have been used to develop such statements and
information but which may prove to be incorrect. As a consequence, the
Company's actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking statements and,
accordingly no assurance can be given that any events anticipated by the
forward-looking statements will transpire or occur, or, if any of them do so,
what benefits the Company will derive there from. Although Vero believes that
the expectations reflected in such forward-looking statements or information
are reasonable, undue reliance should not be placed on forward-looking
statements because Vero can give no assurance that such expectations will
prove to be correct. In addition to other factors and assumptions which may be
identified herein, assumptions have been made regarding, among other things;
the impact of increasing competition; the general stability of the economic
and political environment in which Vero operates; the timely receipt of any
required regulatory approvals; the ability of Vero to obtain qualified staff,
equipment and services in a timely and cost efficient manner; drilling
results; the ability of the operator of the projects which Vero has an
interest in to operate the field in a safe, efficient and effective manner;
the ability of Vero to obtain financing on acceptable terms; field production
rates and decline rates; the ability to replace and expand oil and natural gas
reserves through acquisition, development and exploration; the timing and cost
of pipeline, storage and facility construction and expansion and the ability
of Vero to secure adequate product transportation; future commodity prices;
currency, exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in which Vero
operates; and the ability of Vero to successfully market its oil and natural
gas products. Readers are cautioned that the foregoing list of factors and
assumptions is not exhaustive. Additional information on these and other
factors that could effect the Company's operations and financial results are
included in reports on file with Canadian securities regulatory authorities
and may be accessed through the SEDAR website (www.sedar.com), and the
Company's website (www.veroenergy.ca). Furthermore, the forward-looking
statements contained in this news release are made as at the date of this news
release and the Company does not undertake any obligation to update publicly
or to revise any of the included forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be
required by applicable securities laws.

    BOE Disclosure: Disclosure provided herein in respect of barrels of oil
equivalent (boe) may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.





For further information:

For further information: Doug Bartole, President & CEO, (403) 218-2063;
Gerry Gilewicz, Vice-President Finance & CFO, (403) 693-3170; Scott Koyich,
Investor Relations, (403) 215-5979; www.veroenergy.ca

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