Twoco Petroleums Ltd. Reserves Update
09 November 2012 - 11:56AM
Marketwired Canada
Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) announces an
update of its overall oil and natural gas reserve base from December 31, 2011 to
September 30, 2012, as evaluated by Sproule Associates Limited ("Sproule") in
accordance with National Instrument 51-101 - Standards of Disclosure for Oil and
Gas Activities. The reserves and cash flow runs represent a computer
recalculation to September 30, 2012 of the evaluation of the natural gas reserve
base of the Company as of December 31, 2011 for all properties with the
exception of the Warspite oil property. The Warspite oil property was updated by
Sproule as of July 31, 2012 with cash flows recalculated to September 30, 2012.
A summary of the Company's reserves volumes according to reserve category as at
September 30, 2012 is as provided in the following table. Unless otherwise
stated, the reserves information included in this news release is stated on a
"company interest" basis, which represents Twoco's working interest (operated
and non-operated) share of remaining reserves before deduction of royalties and
including any royalty interests. Numbers presented in table may not add exactly
due to rounding.
Light and Heavy Solution Natural Total Oil
Medium Oil Oil Gas Gas Equivalent
Reserves Category (Mbbl) (Mbbl) (MMcf) (MMcf) (Mboe)
----------------------------------------------------------------------------
Proved
Producing 0 164.8 172 1,059 369.9
Non-Producing 0 0 0 364 60.7
Undeveloped 0 769.2 796 0 901.8
----------------------------------------------------------------------------
Total Proved 0 934.0 967 1,423 1,332.4
Probable 0 1,734.2 2,365 1,138 2,318.0
----------------------------------------------------------------------------
Total Proved plus
Probable 0 2,668.2 3,333 2,561 3,650.4
A summary of the Company's estimated future net revenues associated with Twoco's
reserves as at September 30, 2012 based on the Sproule September 30, 2012 price
forecast is provided in the following table. It should not be assumed that the
net present values estimated by Sproule represent the fair market value of the
reserves. Numbers presented in table may not add exactly due to rounding.
Before Income Taxes Discounted at (%/year)
0% 5% 10% 15% 20%
Reserves Category (M$) (M$) (M$) (M$) (M$)
----------------------------------------------------------------------------
Proved
Producing 7,694 6,731 5,981 5,386 4,907
Non-Producing 353 307 268 236 208
Undeveloped 18,853 14,699 11,567 9,153 7,251
----------------------------------------------------------------------------
Total Proved 26,900 21,737 17,816 14,774 12,365
Probable 59,275 43,023 32,188 24,637 19,160
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Total Proved plus
Probable 86,174 64,760 50,004 39,411 31,526
The decline in overall reserve values from December 31, 2011 is primarily due to
a significant reduction in the price forecast used by Sproule on September 30,
2012 versus December 31, 2011 as well as a decline in overall reserve
quantities. The change in reserve quantities is related to revised recovery
assumptions based on additional production history from the Company's producing
heavy oil wells.
Relevant portions of the Sproule September 30, 2012 price forecast used in the
Company's evaluation are as follows:
WTI Edmonton Hardisty Hardisty Alberta
at Par Price Bow River Heavy AECO US/Cdn
Cushing 40 Deg 24.9 Deg 12 Deg Average Exchange
Oklahoma API API API Price Rate
Year ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/mcf) ($US/$Cdn)
----------------------------------------------------------------------------
2012 96.34 91.97 79.09 64.38 2.76 0.994
2013 97.02 97.64 83.97 74.21 3.25 0.994
2014 93.63 94.24 81.05 71.62 3.67 0.994
2015 92.33 92.93 79.92 70.63 4.31 0.994
2016 99.37 100.01 86.01 76.01 5.80 0.994
2017 101.35 102.01 87.73 77.53 5.92 0.994
2018 103.38 104.05 89.43 79.08 6.05 0.994
2019 105.45 106.13 91.27 80.66 6.18 0.994
2020 107.56 108.25 93.10 82.27 6.31 0.994
2021 109.71 110.42 94.96 83.92 6.44 0.994
2022 111.90 112.63 96.86 85.60 6.57 0.994
Thereafter +2%/year +2%/year +2%/year +2%/year +2%/year 0.994
Twoco is an oil and gas company engaged in the exploration for, and the
acquisition, development and production of, oil and natural gas reserves
primarily in the Province of Alberta.
In this news release the calculation of barrels of oil equivalent (boe) is
calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas
for one barrel (Bbl) of oil based on an energy equivalency conversion method.
Boes may be misleading particularly if used in isolation. A boe conversion ratio
of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily
applicable to the burner tip and does not represent a value equivalency at the
wellhead.
Forward-Looking Statements:
Certain information set forth in this news release contains forward-looking
statements or information ("forward-looking statements"). By their nature,
forward-looking statements are subject to numerous risks and uncertainties, some
of which are beyond Twoco's control, including the impact of general economic
conditions, industry conditions, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks, operational
risks in exploration and development, competition from other industry
participants, the lack of availability of qualified personnel or management,
stock market volatility and the ability to access sufficient capital from
internal and external sources. Although Twoco believes that the expectations in
our forward-looking statements are reasonable, our forward-looking statements
have been based on factors and assumptions concerning future events which may
prove to be inaccurate. Those factors and assumptions are based upon currently
available information. Such statements are subject to known and unknown risks,
uncertainties and other factors that could influence actual results or events
and cause actual results or events to differ materially from those stated,
anticipated or implied in the forward-looking statements, including whether the
Company has the ability to raise or generate sufficient capital in order to
develop its undeveloped and probable reserves on a timetable assumed by Sproule
in its report. As such, readers are cautioned not to place undue reliance on the
forward looking information, as no assurance can be provided as to future
results, levels of activity or achievements. The risks, uncertainties, material
assumptions and other factors that could affect actual results are discussed in
our Annual Information Form and other documents available at www.sedar.com.
Furthermore, the forward-looking statements contained in this document are made
as of the date of this document and, except as required by applicable law, Twoco
does not undertake any obligation to publicly update or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements contained in this
document are expressly qualified by this cautionary statement.
This news release shall not constitute an offer to sell or the solicitation of
any offer to buy securities in any jurisdiction.
FOR FURTHER INFORMATION PLEASE CONTACT:
Twoco Petroleums Ltd.
Wayne A. Malinowski
President and Chief Executive Officer
(403) 231-8653
(403) 237-6048 (FAX)
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