3MV Energy Reports 2011 Year End Reserves and Announces Significant Reserves at Fiske Discovery
/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES/
CALGARY, April 16, 2012 /CNW/ - 3MV Energy Corp. ("3MV" or the "Company") (TSXV: TMV) is pleased to announce the results of its 2011 year-end reserves evaluation by Sproule Associates Limited ("Sproule"), an independent reserves evaluator, for all of 3MV's oil and gas properties, prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the COGE Handbook.
HIGHLIGHTS
- 188% increase in total proved plus probable reserves at Fiske, 3MV's primary production area, since the previous reserves evaluation dated September 30, 2011, to 486.3 thousand barrels of oil equivalent ("MBOE") composed of 100% light-oil;
- Net present value of proved plus probable reserves, before income tax and discounted at 10% at Fiske increased to $17,719,000 or 297% when compared to the same report;
- Total Company proved plus probable reserves of 974.7 MBOE composed of 94% light-oil and NGLs and 6% natural gas;
- Total Company proved reserves of 631.9 MBOE composed of 95% light-oil and NGLs and 5% natural gas;
- Net present value of proved plus probable reserves, before income tax and discounted at 10% of $23,715,000 (61% proven);
- Net present value of proved reserves, before income tax and discounted at 10% of $14,457,000;
- Company exit production rate for December 2011 of approximately 420 BOE/d (barrels of oil equivalent per day") comprised of 83% oil & NGLs.
RESERVES
Sproule has completed their evaluation report of 3MV's reserves dated April 2, 2012, effective as of December 31, 2011 (the "Sproule Report"). All values referred to in this press release are based on Sproule's forecast prices and costs as at December 31, 2011 and are based on "company interest reserves" (working interest plus royalty interest prior to deduction of royalty burdens) unless otherwise noted.
The Sproule Report provides an evaluation of the Company's reserves at December 31, 2011 in accordance with NI 51-101 and the COGE Handbook. The following tables provide summary information presented in the Sproule Report effective December 31, 2011 and based on Sproule's December 31, 2011 price forecast.
The Company today filed its reports relating to reserves data and other oil and gas information pursuant to the requirements NI 51-101 on SEDAR. The files can be accessed either on 3MV Energy's website at www.3mvenergy.com or on SEDAR at www.sedar.com.
Summary of Oil and Gas Reserves as of December 31, 2011
Forecast Prices and Costs
Light & Medium Oil | Natural Gas (non-associated & associated) |
Natural Gas Liquids | Total | |||||||||||||
Reserve Category | Gross (Mbbl) |
Net (Mbbl) |
Gross (MMcf) |
Net (MMcf) |
Gross (Mbbl) |
Net (Mbbl) |
Gross (MBOE) |
Net (MBOE) |
||||||||
Proved | ||||||||||||||||
Developed Producing | 285.5 | 259.3 | 191.0 | 159.0 | 3.1 | 2.5 | 320.3 | 288.3 | ||||||||
Developed Non-Producing |
7.5 | 6.6 | - | - | - | - | 7.5 | 6.6 | ||||||||
Undeveloped | 304.0 | 283.7 | - | - | - | - | 304.0 | 283.7 | ||||||||
Total Proved | 597.0 | 549.6 | 191.0 | 159.0 | 3.1 | 2.5 | 631.9 | 578.7 | ||||||||
Probable | 313.6 | 288.1 | 167.0 | 155.0 | 1.4 | 1.1 | 342.8 | 314.9 | ||||||||
Total Proved Plus Probable |
910.6 | 837.7 | 358.0 | 314.0 | 4.5 | 3.6 | 974.7 | 893.6 |
Reference: Item 2.1(1) of Form 51-101F1
Summary of Net Present Values of Future Net Revenue as of December 31, 2011
Forecast Prices and Costs
Before Income Taxes Discounted at (%/Year) | ||||||||||||||
Reserves Category | 0 (M$) |
5 (M$) |
10 (M$) |
15 (M$) |
20 (M$) |
|||||||||
Proved | ||||||||||||||
Developed Producing | 11,528 | 10,596 | 9,810 | 9,161 | 8,621 | |||||||||
Developed Non-Producing | 258 | 237 | 217 | 199 | 183 | |||||||||
Undeveloped | 6,725 | 5,446 | 4,430 | 3,616 | 2,956 | |||||||||
Total Proved | 18,510 | 16,279 | 14,457 | 12,975 | 11,760 | |||||||||
Probable | 13,624 | 11,113 | 9,258 | 7,869 | 6,803 | |||||||||
Total Proved Plus Probable | 32,134 | 27,392 | 23,715 | 20,845 | 18,562 | |||||||||
After Income Taxes Discounted at (%/Year) | ||||||||||||||
Reserves Category | 0 (M$) |
5 (M$) |
10 (M$) |
15 (M$) |
20 (M$) |
|||||||||
Proved | ||||||||||||||
Developed Producing | 11,421 | 10,492 | 9,708 | 9,061 | 8,523 | |||||||||
Developed Non-Producing | 234 | 214 | 194 | 176 | 161 | |||||||||
Undeveloped | 4,903 | 3,791 | 2,914 | 2,217 | 1,657 | |||||||||
Total Proved | 16,558 | 14,497 | 12,816 | 11,454 | 10,341 | |||||||||
Probable | 10,088 | 8,101 | 6,642 | 5,559 | 4,733 | |||||||||
Total Proved Plus Probable | 26,645 | 22,598 | 19,458 | 17,013 | 15,074 |
Reference Item 2.1(2) of Form 51-101F1
Notes: | NPV of FNR include all resource income: | Income Taxes: | |||||||||
Sale of oil, gas, by-product reserves | Includes all resource income | ||||||||||
Processing third party reserves | Apply appropriate income tax calculations | ||||||||||
Other income | Include prior tax pools | ||||||||||
Unit Values are based on net reserve volumes |
Summary of Pricing Assumptions as of December 31, 2011
Forecast Prices and Costs
The commodity prices as forecast by Sproule as at December 31, 2011 are summarized as follows.
Year | WTI Cushing Oklahoma ($US/bbl) |
Edmonton Par Price 40° API ($Cdn/bbl) |
Cromer Medium 29.3° API ($Cdn/bbl) |
Natural Gas1 AECO Gas Prices ($Cdn/MMBtu) |
Pentanes Plus FOB Field Gate ($Cdn/bbl) |
Butanes F.O.B. Field Gate ($Cdn/bbl) |
||||||||||||
Historical | ||||||||||||||||||
2007 | 72.27 | 77.06 | 65.36 | 6.65 | 77.33 | 63.71 | ||||||||||||
2008 | 99.59 | 102.85 | 93.05 | 8.15 | 104.70 | 75.09 | ||||||||||||
2009 | 61.63 | 66.20 | 62.77 | 4.19 | 68.13 | 47.07 | ||||||||||||
2010 | 79.43 | 77.81 | 73.66 | 4.16 | 84.21 | 57.04 | ||||||||||||
2011 | 95.00 | 95.16 | 87.86 | 3.72 | 104.12 | 70.93 | ||||||||||||
Forecast | ||||||||||||||||||
2012 | 98.07 | 96.87 | 90.09 | 3.16 | 103.57 | 72.20 | ||||||||||||
2013 | 94.90 | 93.75 | 87.19 | 3.78 | 100.23 | 69.87 | ||||||||||||
2014 | 92.00 | 90.89 | 84.52 | 4.13 | 97.17 | 67.74 | ||||||||||||
2015 | 97.42 | 96.23 | 89.50 | 5.53 | 102.89 | 71.73 | ||||||||||||
2016 | 99.37 | 98.16 | 91.29 | 5.65 | 104.94 | 73.16 | ||||||||||||
2017 | 101.35 | 100.12 | 93.11 | 5.77 | 107.04 | 74.63 | ||||||||||||
2018 | 103.38 | 102.12 | 94.98 | 5.89 | 109.18 | 76.12 | ||||||||||||
2019 | 105.45 | 104.17 | 96.88 | 6.01 | 111.37 | 77.64 | ||||||||||||
2020 | 107.56 | 106.25 | 98.81 | 6.14 | 113.59 | 79.19 | ||||||||||||
2021 | 109.71 | 108.38 | 100.79 | 6.27 | 115.87 | 80.78 | ||||||||||||
Thereafter | Escalation Rate of 2.0% |
(1) This summary table identifies benchmark reference pricing schedules that might apply to a reporting issuer.
Note:
Product sale prices will reflect these reference prices with further adjustments for quality and transportation to point of sale.
Reference Item 3.2 of Form 51-101F1
3MV plans to release its audited financial statements for the year ended December 31, 2011 during the last week of April, 2012.
Credit Facilities
The Company also announces that is has entered into a $2 million non-revolving secured credit facility with Tallinn Capital Mezzanine Limited Partnership. In addition, the Company has in place a $4 million revolving, secured credit facility with Alberta Treasury Branches. Both lines of credit will be used to fund ongoing operations, to fund capital expenditures and for general corporate purposes.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
Forward-Looking Statements
Certain statements in this news release constitute forward-looking statements. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by 3MV. Although 3MV believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because 3MV can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (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), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking statements contained in this document are made as of the date hereof and 3MV 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.
BOE Calculation
For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent ("BOE") using six thousand cubic feet equal to one barrel unless otherwise stated. A BOE conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). BOEs may be misleading, particularly if used in isolation.
Douglas McKinnon
President & CEO
(403) 817-0675
OR
Brian Radiff
VP, Corporate Development
(403) 817-0676
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