Forent Energy Announces 2013 Financial and Operating Results and
Filing of NI 51-101 Annual Reserve Report
CALGARY, ALBERTA--(Marketwired - May 5, 2014) - Forent Energy
Ltd. (TSX-VENTURE:FEN) ("Forent" or the "Company") is pleased to
announce that it has filed its audited Financial Statements and
Management's Discussion & Analysis, for the period ending
December 31, 2013, with applicable securities regulatory
authorities in Canada. Copies of these documents can be accessed
under the Company's profile on the SEDAR website at www.sedar.com
and on the Company's website www.forentenergy.com.
In addition, Forent's board of directors has accepted the 2013
year end reserves report, prepared by McDaniel & Associates
Consultants Ltd. ("McDaniel"). The Company has filed with
applicable securities regulators in Canada under National
Instrument 51-101, Standards of Disclosure for Oil and Gas
Activities its Form 51-101F1 - Statement of Reserves Data and
Other Oil and Gas Information; Form 51-101F2 - Report on Reserves
Data by Independent Qualified Reserves Evaluator; and Form 51-101F3
- Report of Management and Directors on Oil and Gas Disclosure with
applicable securities regulators in Canada under National
Instrument 51-101, Standards of Disclosure for Oil and Gas
Activities. Such filings can also be accessed electronically from
the SEDAR website at www.sedar.com.
Overview of 2013
2013 represented a significant transition year for Forent
Energy. During the first quarter, we successfully concluded the
sale of our Mervin heavy oil asset. This resulted in the
elimination of the significant working capital deficiency that had
accumulated due to impaired production at Mervin.
In the second quarter, the first well at Montgomery was
completed in both the Second White Speckled Shale formation and
Lower Mannville group. Both intervals recovered hydrocarbons and
provided additional data to high-grade future exploration potential
on this significant land holding. Also during the second quarter,
Forent successfully abandoned our final standing wellbore in Nova
Scotia, completing all of our operational obligations on the Alton
Block.
During the third quarter, we successfully identified,
negotiated, and conducted economic and environmental due diligence
on our most significant asset acquisition to-date. The acquired
producing properties are low decline oil weighted assets, with
favorable netbacks and significant development opportunities. These
production assets will provide a solid basis for our near term
growth. The acquisition closed in October 2013.
In the fourth quarter, Forent was also successful in acquiring
26 sections of mineral rights in an area of central Alberta with
proven hydrocarbon potential. This new land block represents an
opportunity for intermediate term growth through exploration in an
area with existing infrastructure and multi-zone potential at
depths of less than 1500m.
Over the course of 2013, Forent has continued to evaluate our
longer-term, high-impact exploration prospects and has cleaned up
our existing asset base. More importantly, the Company has
increased proven plus probable reserves by over 10 times, added the
oil production and reserves necessary to provide corporate cash
flow and is now well positioned for steady future growth.
Q4 2013 acquisition
As mentioned above, in October of 2013, Forent closed on the
acquisition of predominately oil producing assets in central
Alberta for consideration of $6,800,000 cash and 10,000,000 common
shares valued at $0.08 per share. The acquired properties exhibit
low declines, have long reserve life indexes, and are largely
operated. Significant development potential exists on all of these
properties, including both horizontal and vertical oil development
drilling locations and facility upgrades and optimization. Activity
in these areas will continue to be a focus for Forent during
2014.
Operations
Q4 2013 saw the successful integration of our newly acquired
properties into Forent. Forent now has four main producing areas,
of which three are oil and one natural gas, and all are within 400
km of our corporate head office. The Company operates two main
central oil treating facilities and one central gas gathering,
compression and dehydration facility.
Financing
In February 2013, Forent closed a $1,500,000 non-brokered
private placement. Forent issued 30,000,000 common shares in the
capital of the Company at a price of $0.05 per Common Share. 74% of
the Offering (22,300,000 common shares) was purchased by directors,
officers, employees, consultants and affiliates of the Company.
In December 2013, Forent also closed on a nonābrokered private
placement basis the issue of 6,050,000 flow-through common shares,
sold at a price of $0.10 per common share, for gross proceeds of
$605,000. Insiders, including W. Brett Wilson, the Company's
Chairman, purchased 3,850,000 flow-through shares in the private
placement (64% of the offering).
Reserves and Production
The acquisition in Q4 2013 increased both the reserves and
corporate value of the Company. In 2012, Forent closed the year
with 111 Mboe of gross total proved natural gas reserves and 143
Mboe of gross proved + probable reserves. During 2013, Forent
increased reserves and closed the year with 1081 Mboe of total
proved reserves (81% oil + liquids) and 1,570 Mboe gross proved +
probable reserves (78% oil and liquids).
Overall reserves were increased by 876% on a gross proven basis
and 998% on gross proven + probable.
Company Gross (1)Reserves (Before Royalty) Comparison
of Reserves as at December 31, 2013 and 2012 Forecast Prices and
Costs |
|
|
Oil and Natural Gas Liquids |
Natural Gas |
BOE(6:1) |
|
Btax NPV10(2) |
|
Gross Proved (Mbbl) |
Gross Probable (Mbbl) |
Gross Proved Plus Probable (Mbbl) |
Gross Proved (MMcf) |
Gross Probable (MMcf) |
Gross Proved Plus Probable (MMcf) |
Gross Proved (Mboe) |
|
Gross Probable (Mboe) |
|
Gross Proved Plus Probable (Mboe) |
|
Gross Proved (MM$) |
|
Gross Probable (MM$) |
|
Gross Proved Plus Probable (MM$) |
|
Dec 31, 2012 |
2.6 |
0.6 |
3.2 |
649 |
190 |
839 |
110.8 |
|
32.3 |
|
143 |
|
0.8 |
|
0.3 |
|
1.1 |
|
Dec 31, 2013 |
876.8 |
350.4 |
1227.1 |
1226 |
829 |
2054 |
1081.1 |
|
488.5 |
|
1570 |
|
15.2 |
|
6.2 |
|
21.4 |
|
Change |
874.2 |
349.8 |
1223.9 |
577 |
639 |
1215 |
970.3 |
|
456.2 |
|
1426.5 |
|
14.4 |
|
5.9 |
|
20.3 |
|
% increase |
|
|
|
|
|
|
876 |
% |
1,412 |
% |
998 |
% |
1,800 |
% |
1,967 |
% |
1,845 |
% |
(1) Gross reserves are the Company's working interest reserves
before calculation of royalties, and before the consideration of
the Company's royalty interest.
(2) The estimated values disclosed do not represent fair market
value
(3) Totals may not add due to rounding.
During the first three quarters of 2013, Forent's legacy
production averaged 58 boe/d of predominately dry gas. In Q4 2013,
our total production more than tripled to 204 boe/d (~ 60% oil
& liquids) with the majority of the increase resulting from the
addition of three oil producing properties that were acquired on
October 4, 2013.
Ongoing Exploration
In 2013, the first well on the Montgomery block was completed
and produced light sweet oil from the Second White Speckled Shale
formation (2WS). The Lower Mannville group was also completed and
tested sweet natural gas after stimulation. While it is not
anticipated that this initial test well will come on production in
the near future, two play types that Forent had identified on the
lands were validated with these hydrocarbon recoveries. Forent
intends to continue to evaluate both of these plays in addition to
other geophysical anomalies identified on our proprietary 3-D
seismic survey at Montgomery.
In Q4 2013, Forent was successful in acquiring 26 sections of
Crown land within our south central Alberta core area. We hold all
petroleum and natural gas rights from surface to basement for a
term of 5 years. These lands are prospective for Cretaceous oil and
gas at depths of less than 1200m and Mississippian targets at less
than 1500m. During 2014, Forent intends to further evaluate these
lands both geophysically and geologically.
In Q1 2014, the second exploration well "Forent et al
DD14-12-012-29W4", was spud and was successfully drilled to the
base of the 2WS. The well was completed with a small acid job, in
an attempt to clean up drilling damage that may have occurred,
swabbed down to formation depth and bottom hole recorders were run
in order to measure the formation pressure build up. No formation
inflow was noted into the wellbore while swabbing operations were
occurring. The recorders have been recovered and the reservoir
pressure build up is currently being analyzed to determine the
production potential of this wellbore.
In April 2014, Forent elected not to submit a work commitment to
renew the Alton block in Nova Scotia. Once the regulatory
requirements around hydrocarbon resource stimulation in the
province are better identified and a joint venture partner has been
identified, Forent will have the opportunity to re-nominate these
lands and make a meaningful work commitment that will enable the
development of the block.
2014 Outlook
Forent will be executing a 3 well infill development drilling
program at Twining, immediately after local road bans have been
removed from access roads. We are planning to grow our oil and
associated gas production to over 300 boe/d by the end of 2014
through the drilling of low risk, development wells within our
current asset base.
Several development strategies for the Wayne property are under
review with Forent's partner in the area, Forent hopes to be able
to firm up a drilling schedule with its partner during the second
half of 2014 for up to three new horizontal wells.
At Provost, the Company has identified a number of infill
horizontal heavy oil development locations. Currently the
facilities at Provost are restricted by water handling capacity.
Forent has proposed an expansion of water handling capabilities at
the battery to facilitate increased oil production with our working
interest partners. Once approvals have been obtained from our
partners, Forent will proceed with equipment installation.
Forent also continues to evaluate oil and natural gas
acquisition opportunities and potential corporate mergers in order
to provide increased per share growth for our Shareholders.
Shares of Forent trade on the TSX Venture Exchange under the
symbol "FEN".
ADVISORY: Certain information in this news release, including
the operations at the Company's, Twining and Montgomery properties,
constitute forward-looking statements under applicable securities
laws. Although Forent believes that the expectations reflected in
these forward looking statements are reasonable, undue reliance
should not be placed on them because Forent 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. The
forward-looking statements contained in this news release are made
as at the date of this news release and the Corporation 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.
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address future
production, reserve potential, exploration drilling, exploitation
activities and events or developments that the Company expects are
forward-looking statements. Although the Company believes the
expectations expressed in such forward looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward looking statements include market prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees
of future performance and those actual results or developments may
differ materially from those projected in the forward-looking
statements. For more information on the Company, Investors should
review the Company's registered filings which are available at
www.sedar.com.
This news release shall not constitute an offer to sell or the
solicitation of any offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. 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 of the U.S. Securities Act and applicable
state securities laws.
BOE presentation:
Barrel ("bbl") of oil equivalent ("boe") amounts may be
misleading particularly if used in isolation. All boe conversions
in this report are calculated using a conversion of six thousand
cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1
bbl) and is based on an energy conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the well head.
NEITHER THE
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.
FORENT ENERGY LTD.Richard WadePresident & CEO(403) 262-9444
#211rwade@forentenergy.comFORENT ENERGY LTD.Brad R. PerryCFO(403)
262-9444 #208bperry@forentenergy.comwww.forentenergy.com
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