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The Company engaged the services of Sproule Associates Limited to prepare a reserve evaluation with an effective date of December 31, 2005. The reserves are located in the Province of Alberta. The majority of the Company’s production is comprised of natural gas. The Company’s main gas producing area is located in the Sundance area of West Central Alberta. The gross reserve figure in the following charts represents the Company’s ownership interest before royalties and the net figure is after deductions for royalties.
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SUMMARY OF OIL AND GAS RESERVES
AS OF DECEMBER 31, 2005
(FORECAST PRICES AND COSTS)
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RESERVES |
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Natural Gas |
Natural Gas Liquids |
| |
Gross |
Net |
Gross |
Net |
| RESERVE CATEGORY |
(MMcf) |
(MMcf) |
(Mbbl) |
(Mbbl) |
| ____________________________________________________________________________ |
| PROVED |
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| Developed Producing |
352 |
283 |
13.3 |
9.0 |
_________________________________________________________________________________________ |
| TOTAL PROVED |
352 |
283 |
13.3 |
9.0 |
| PROBABLE |
216 |
167 |
8.1 |
5.6 |
| ____________________________________________________________________________ |
| TOTAL PROVED PLUS PROBABLE |
568 |
450 |
21.4 |
14.6 |
| ____________________________________________________________________________ |
RECONCILIATION OF COMPANY GROSS RESERVES
BY PRINCIPAL PRODUCT TYPE (FORECAST PRICES AND COSTS) |
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NATURAL GAS |
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Gross Proved |
Gross Probable |
Gross Proved
Plus Probable |
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(MMcf) |
(MMcf) |
(MMcf) |
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| DECEMBER 31, 2004 |
- |
- |
- |
| Extension |
288 |
100 |
388 |
| Improved recovery |
- |
58 |
58 |
| Technical revisions |
32 |
(24) |
8 |
| Discoveries |
- |
- |
- |
| Acquisitions |
52 |
82 |
134 |
| Economic factors |
- |
- |
- |
| Production |
(20) |
- |
(20) |
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| December 31, 2005 |
352 |
216 |
568 |
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SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2005
(FORECAST PRICES AND COSTS)
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NET PRESENT VALUE OF FUTURE NET REVENUE
After Income Taxes
Discounted at (%/year)
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0 |
5 |
10 |
15 |
20 |
(M$)
RESERVE CATEGORY |
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PROVED |
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| Developed Producing |
2,686 |
2,460 |
2,277 |
2,126 |
1,999 |
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| TOTAL PROVED |
2,686 |
2,460 |
2,277 |
2,126 |
1,999 |
| PROBABLE |
1,132 |
902 |
745 |
633 |
549 |
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| TOTAL PROVED PLUS PROBABLE |
3,818 |
3,362 |
3,022 |
2,759 |
2,548 |
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Year |
Edmonton Par Price |
Alberta Gas Reference
Price Plantgate |
Propane |
Butane |
Pentane |
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(Cdn $
per barrel) |
(Cdn $
per MCF) |
(Cdn $
per barrel) |
(Cdn $
per barrel) |
(Cdn $
per barrel) |
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2006 |
70.07 |
11.37 |
39.25 |
47.01 |
71.77 |
2007 |
70.99 |
10.63 |
39.76 |
47.62 |
72.71 |
2008 |
62.73 |
8.76 |
35.14 |
42.08 |
64.25 |
2009 |
57.53 |
7.69 |
32.22 |
38.59 |
58.92 |
2010 |
54.65 |
7.39 |
30.61 |
36.66 |
55.97 |
2011 |
55.47 |
7.52 |
31.07 |
37.21 |
56.81 |
2012 |
56.31 |
7.63 |
31.54 |
37.77 |
57.67 |
2013 |
57.16 |
7.77 |
32.01 |
38.34 |
58.54 |
2014 |
58.02 |
7.90 |
32.50 |
38.92 |
59.42 |
2015 |
58.89 |
8.04 |
32.99 |
39.51 |
60.31 |
2016 |
59.78 |
8.18 |
33.48 |
40.10 |
61.22 |
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Natural gas and liquid prices escalate at various rates thereafter.
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The following cautionary statements are specifically required by NI 51-101.
- • It should not be assumed that the estimates of future net revenue presented in the above tables represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material.
• Disclosure provided herein in respect of BOE’s may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6mcf:1bbl has been used in all cases in this disclosure. This BOE conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
- • Estimates of reserves and future net revenues for individual properties may not reflect the same confidence level as estimates of reserves and future net revenues for all properties due to the effects of aggregation.
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