Welcome!

News Feed Item

NuVista Energy Ltd. Announces 48% Increase to Year End 2013 Reserves and Provides Operational Update

CALGARY, ALBERTA -- (Marketwired) -- 02/07/14 -- NuVista Energy Ltd. (TSX:NVA) ("NuVista" or the "Company") is pleased to announce a significant increase in our reserves as a result of the 2013 year end independent reserves evaluation by GLJ Petroleum Consultants Ltd ("GLJ") (the "GLJ Report"). We are also very pleased to provide an operational update with several new 30-day production results on wells recently drilled into our Wapiti Montney condensate-rich play. This play continues to meet and exceed expectations as our flagship play with line-of-sight to exceptional organic production, reserves, and value growth for shareholders of the Company.

Reserves Highlights

--  Increased proved plus probable reserves ("2P") by 48% to 139 MMBoe and
    total proved reserves ("1P") by 36% to 80 MMBoe, despite divestitures of
    non-core assets through the year. Excluding the effect of these
    divestitures, the 2P and 1P reserve increases were 64% and 53%
    respectively; 
--  Increased condensate reserves by 2.7 times on a 2P basis to 24.8 MMBoe.
    Condensate volumes now represent 18% of total 2P reserves, up from 10%
    in 2012; 
--  Achieved Company finding and development ("F&D") costs of $12.31/Boe on
    a 2P basis, including changes in future development costs ("FDC"); 
--  Increased Montney 2P operating recycle ratio to 2.3x with full year
    Montney operating netbacks of $27.88/Boe and Montney 2P F&D of
    $12.05/Boe; 
--  Increased the before tax net present value discounted at 10% of 2P
    reserves by 70% to $1.3 billion including the effect of divestitures; 
--  Organic 2P reserve additions replaced 950% of production in the year
    (almost 10 times 2013 annual production), while proved developed
    producing reserve additions alone replaced 147% of annual production;
    and 
--  Increased our reserve life index(1) ("RLI") for 2P reserves from 14.6
    years to 22.2 years and the 1P RLI from 9.2 years to 12.8 years. 

(1) Production for the RLI was calculated using the mid-point of 2013 Q4
    guidance (annualized) and 2012 actuals. 

Operations Highlights

--  Achieved four new well 30-day initial production rates ("IP30"). These
    results continue to build momentum in the play, including a new record
    IP30 from NuVista's latest Elmworth (North) Block Development well at
    2,115 Boe/d. 

New Well IP30 Results(1)

---------------------------------------------------------------------------
                                              Total       CGR              
Well                     Raw Gas Condensate   Sales    C5+/Raw        Notes
---------------------------------------------------------------------------
                         (MMcf/d)   (Bbls/d) (Boe/d)(Bbls/MMcf)            
---------------------------------------------------------------------------
South Block Typecurve        5.8        435   1,361         75             
---------------------------------------------------------------------------
  Well 13 (South Block)      5.1        545   1,413        107         Post-
                                                               intervention
                                                                       IP30
---------------------------------------------------------------------------
  Well 14 (South Block)      5.2        532   1,400        103         Post-
                                                               intervention
                                                                       IP30
---------------------------------------------------------------------------
  Well 15 (South Block)      4.2        595   1,241        142             
---------------------------------------------------------------------------
                                                                           
---------------------------------------------------------------------------
North Block Typecurve        5.8        261   1,222         45             
---------------------------------------------------------------------------
  Well 16 (North Block)     10.4        395   2,115         38             
---------------------------------------------------------------------------

(1) Well numbering refers to the numbered wells in our corporate presentation available on our website. They are effectively in chronological order since our inception in the play. All numbers are based on field estimate data.

Well 13 has been included in the table despite having a previously reported IP30. NuVista subsequently performed an intervention on the well to clear an obstruction, which increased the number of producing stages. The post-intervention IP30 shown is greatly improved by 30%. Well 14 is new and had not been previously reported. It also had a similar intervention performed and the post-intervention IP30 is presented in the table. NuVista has engineered changes to our completions design to alleviate these production issues. Wells being tested and brought onto production now have the benefit of these design changes. We now have even stronger confidence in our typecurve, and the possibility of proving a sustained increase to it sometime in 2014, through continued fracture and completion optimization.

Strategic, Infrastructure, and Operational Update

We are very pleased to announce that NuVista has exercised its right to nominate an incremental 15 MMcf/d of raw Montney sour gas and associated raw liquids for firm transportation and processing service under its existing agreement with Keyera. This brings the total firm contracted amount up from 65 MMcf/d to 80 MMcf/d of raw gas and the associated raw condensate liquids up to 8,000 Bbl/d. These incremental nominations were part of the planning process for the Keyera Wapiti Gathering System and Keyera Simonette Gas Plant expansions previously announced. The contract terms are essentially the same as those announced by NuVista in April 2013. This contract volume increase commences in the third quarter of 2015 and matches the augmented sizing of the new NuVista South Block Compressor Station which is currently under construction. The compressor station being built by NuVista, and the raw gas and liquid pipelines to the Simonette gas plant which are being built by Keyera are currently in project execution and they remain on plan for cost and for the expected startup date in the late second quarter of 2014.

Drilling, completions, and tie-ins are proceeding such that behind-pipe gas is accumulating as planned in preparation for the capacity increase upon startup of these new facilities. With each new well drilled and each passing quarter, our confidence in the play continues to build. We have recently drilled our first 2-well pad, with another 2-well and our first 3-well pad commencing before spring breakup. We expect that the additional tranche of capacity announced today is only one of several more which will continue to be put in place several years ahead of our drilling results to provide for certainty of future capacity which is commensurate with our growing Field Development Plan. We have forecast to average between 2-3 rigs drilling the Montney through 2014, although we are currently drilling with 4 rigs temporarily ahead of spring breakup.

2013 and 2014 Guidance

We are off to a strong start in 2014 with a busy program prior to spring breakup and major facilities being constructed to pave the way for our significant production volume build in the second half of the year, particularly in the fourth quarter. We will continue our focus and demonstrated results in reducing cost and we will continue to pursue expansion of our typecurve through longer horizontal wells, more fracture stages, and the many other improvements which are strongly driven by ingenuity, engineering, and empirical learning in a repeatable resource play. Our guidance for 2014 remains as previously announced and as our results for 2013 are becoming finalized, we expect to be in the upper portion of our previously announced 2013 fourth quarter production guidance range of 17,000 Boe/d to 18,000 Boe/d. Our production entering January 2014, after the effect of the divestiture announced in December of 2013, is approximately 16,500 Boe/d. 2014 average production guidance is still in the range of 17,500 Boe/d to 18,500 Boe/d, while the 2014 fourth quarter production guidance range remains at 20,000 Boe/d to 21,000 Boe/d.

We look forward to an exciting 2014 while adding excellent value for NuVista's shareholders, and we expect to be able to provide another operational update along with our full 2013 year end results in a press release in early March 2014. We would like to take this opportunity to thank our shareholders and our staff for their continuing support and dedication as we continue to build an ever more valuable future for NuVista.

Summary of Corporate Reserves Data

The following table outlines NuVista's corporate finding and development costs in more detail:

                       3 Year-Average (1)     2013 (1)          2012 (1)    
                      ------------------------------------------------------
                                  Proved            Proved            Proved
                                    plus              plus              plus
                        Proved  probable  Proved  probable  Proved  probable
----------------------------------------------------------------------------
After reserve                                                               
 revisions and                                                              
 including changes in                                                       
 future development                                                         
 capital                                                                    
  Finding and                                                               
   development costs                                                        
   ($/Boe)              $17.48    $14.43  $14.51    $12.31  $19.17    $15.53
----------------------------------------------------------------------------

(1) The aggregate of the exploration and development costs incurred in the
    most recent financial year and the change during the year in estimated
    future development costs generally will not reflect total finding and
    development costs related to reserve additions for the year. 

The following table provides summary reserve information based upon the GLJ Report using the published GLJ January 1, 2014 price forecast set forth later in this document:

                                                    Other                  
                                Natural   Conden- Liquids                  
                                    Gas     sate       (2)     Oil    Total
---------------------------------------------------------------------------
                                Working  Working  Working  Working  Working
Reserves category(1)           Interest Interest Interest Interest Interest
                                  (MMcf)  (MBbls)  (MBbls)  (MBbls)   (MBoe)
---------------------------------------------------------------------------
Proved                                                                     
  Developed producing           115,174    3,590    3,425    1,429   27,640
  Developed non-producing        42,210      896    1,439      250    9,620
  Undeveloped                   173,124    9,253    4,153      937   43,197
---------------------------------------------------------------------------
Total proved                    330,507   13,739    9,017    2,615   80,456
Probable                        236,152   11,070    6,102    2,244   58,775
---------------------------------------------------------------------------
Total proved plus probable      566,659   24,809   15,119    4,860  139,231
---------------------------------------------------------------------------

(1) Numbers may not add due to rounding. 
(2) Propane, Butane, Ethane. 

The following table is a summary reconciliation of the 2013 year end working interest reserves with the working interest reserves reported in the 2012 year end reserves report:

                                                                  Total Oil
                                   Natural                       Equivalent
                                     Gas(1) Liquids(1)     Oil(1)        (1)
                                      (Bcf)    (MBbls)    (MBbls)     (MBoe)
---------------------------------------------------------------------------
Total proved                                                               
Balance, December 31, 2012           254.2     11,320      5,471     59,155
Exploration and development(2)       116.6     11,139         59     30,631
Technical revisions                    8.0      1,749          2      3,088
Economic revisions                       -          -          -          -
Acquisitions                             -          -          -          -
Dispositions                         (22.2)       (31)    (2,382)    (6,108)
Production                           (26.1)    (1,421)      (534)    (6,310)
Balance, December 31, 2013           330.5     22,756      2,616     80,456
---------------------------------------------------------------------------
Total proved plus probable                                                 
Balance, December 31, 2012           401.4     18,159      9,020     94,072
Exploration and development(2)       227.0     20,980         55     58,872
Technical revisions                   (3.5)     2,270       (239)     1,448
Economic revisions                       -          -          -          -
Acquisitions                             -          -          -          -
Dispositions                         (32.1)       (61)    (3,442)    (8,850)
Production                           (26.1)    (1,421)      (534)    (6,310)
Balance, December 31, 2013           566.7     39,928      4,860    139,231
---------------------------------------------------------------------------

(1) Numbers may not add due to rounding. 
(2) Reserve additions for Drilling Extensions, Infill Drilling and Improved
    Recovery. 

The following table summarizes the future development capital included in the GLJ Report:

                                                                Proved plus
($ thousands, undiscounted)                           Proved       probable
---------------------------------------------------------------------------
Balance, December 31, 2012                           338,974        534,190
Dispositions                                         (19,044)       (26,809)
Exploration and development, improved                                      
 recoveries and other                                267,139        520,380
---------------------------------------------------------------------------
Balance, December 31, 2013                           587,069      1,027,761
---------------------------------------------------------------------------

Summary Wapiti Montney Play Reserves Data

The following table provides summary Wapiti Montney play reserve information based upon the GLJ Report using the published GLJ January 1, 2014 price forecast set forth below (with comparatives at January 1, 2013 price forecast):

                                                 December 31,   December 31,
                                                        2013           2012
---------------------------------------------------------------------------
                                                     Working        Working
                                                    Interest       Interest
Reserves category                                      (MBoe)         (MBoe)
---------------------------------------------------------------------------
Proved Producing                                       9,716          2,569
Total Proved                                          46,068         15,654
Total Proved plus Probable                            86,174         29,167
---------------------------------------------------------------------------

The following table summarizes the Wapiti Montney play FDC included in the GLJ Report:

                                                                Proved plus
($ thousands, undiscounted)                           Proved       probable
---------------------------------------------------------------------------
Balance, December 31, 2012                           174,463        285,984
Exploration and development changes in the                                 
 year                                                274,553        515,125
---------------------------------------------------------------------------
Balance, December 31, 2013                           449,016        801,109
---------------------------------------------------------------------------

The estimates of reserves for the Wapiti Montney play may not reflect the same confidence level as estimates of reserves of all NuVista's properties due to the effect of aggregation.

Summary of Corporate Net Present Value Data

The estimated net present values of future net revenue before income taxes associated with NuVista's reserves effective December 31, 2013 and based on published GLJ future price forecast as at January 1, 2014 as set forth below are summarized in the following table:

The estimated future net revenue contained in the following table does not necessarily represent the fair market value of the reserves. There is no assurance that the forecast price and cost assumptions contained in the GLJ 2013 Report will be attained and variations could be material. The recovery and reserve estimates described herein are estimates only. Actual reserves may be greater or less than those calculated.

                                              Discount factor (%/year)     
---------------------------------------------------------------------------
Reserves category (1)(2) ($ millions)         0%       8%      10%      12%
---------------------------------------------------------------------------
Proved:                                                                    
  Developed producing                        583      411      384      362
  Developed non-producing                    203      123      112      103
  Undeveloped                                822      394      336      289
---------------------------------------------------------------------------
Total proved                               1,608      928      833      754
Probable                                   1,413      581      490      418
---------------------------------------------------------------------------
Total proved plus probable                 3,021    1,509    1,323    1,172
---------------------------------------------------------------------------

(1) Numbers may not add due to rounding. 
(2) Estimate future net reserves do not represent the fair market value of
    reserves. 

The following table is a summary of pricing and inflation rate assumptions based on published GLJ forecast prices and costs as at January 1, 2014:

            Natural                                                        
                Gas         Liquids               Oil                      
---------------------------------------------------------------------------
                                                WTI   Edmon-               
                                               Cush-    ton                
                   Edmonton   Edmon-  Edmon-    ing     Par   Infla-   Exch-
           AECO Gas  Conden-    ton     ton    Okla-  Price    tion    ange
              Price    sate Propane  Butane    homa  40 API   Rates  Rate(2)
             ($Cdn/   ($Cdn/  ($Cdn/  ($Cdn/   ($US/  ($Cdn/      %/   ($US/
Year         Mmbtu)     Bbl)    Bbl)    Bbl)    Bbl)    Bbl) Year(1)   $Cdn)
---------------------------------------------------------------------------
Forecast                                                                   
2014           4.03  105.20   57.83   73.22   97.50   92.76       2    0.95
2015           4.26  107.11   58.42   75.95   97.50   97.37       2    0.95
2016           4.50  107.00   60.00   78.00   97.50  100.00       2    0.95
2017           4.74  107.00   60.00   78.00   97.50  100.00       2    0.95
2018           4.97  107.00   60.00   78.00   97.50  100.00       2    0.95
2019           5.21  107.00   60.00   78.00   97.50  100.00       2    0.95
2020           5.33  107.82   60.46   78.60   98.54  100.77       2    0.95
2021           5.44  109.97   61.67   80.17  100.51  102.78       2    0.95
2022           5.55  112.17   62.90   81.77  102.52  104.83       2    0.95
2023           5.66  114.41   64.16   83.40  104.57  106.93       2    0.95
2024         +2%/yr  +2%/yr  +2%/yr  +2%/yr  +2%/yr  +2%/yr       2    0.95
---------------------------------------------------------------------------

(1) Inflation rate for costs. 
(2) Exchange rate used to generate the benchmark reference prices in this
    table. 

ADVISORY REGARDING OIL AND GAS INFORMATION

This news release contains the terms barrels of oil equivalent ("Boe"). Natural gas is converted to a Boe using six thousand cubic feet of gas to one barrel of oil. Boes may be misleading, particularly if used in isolation. The foregoing 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. As well, given that the value ratio based on the current price of crude oil to natural gas is significantly different from the 6:1 energy equivalency ratio, using a conversion ratio on a 6:1 basis may be misleading as an indication of value.

Any references in this news release to initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for NuVista.

ADVISORY REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements, including management's assessment of: NuVista's future strategy, plans, opportunities and operations; forecast production; production mix; drilling, development, completion and tie-in plans and timing and results thereof; expectations of timing of construction of facilities and the benefits thereof; expectations of improvements in recycle ratio; NuVista's assessment of field conditions; typecurves; condensate and natural gas liquid yields; the timing, allocation and efficiency of NuVista's capital program and the results therefrom; the anticipated potential of NuVista's asset base; reserves life indexes; timing for press release announcing full 2013 results; and industry conditions. By their nature, forward-looking statements are based upon certain assumptions and are subject to numerous risks and uncertainties, some of which are beyond NuVista's control, including the impact of general economic conditions, industry conditions, current and future commodity prices, currency and interest rates, anticipated production rates, borrowing, operating and other costs and funds from operations, the timing, allocation and amount of capital expenditures and the results therefrom, anticipated reserves and the imprecision of reserve estimates, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, competition from other industry participants, availability of qualified personnel or services and drilling and related equipment, stock market volatility, effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties; the ability to access sufficient capital from internal sources and bank and equity markets; and including, without limitation, those risks considered under "Risk Factors" in our Annual Information Form. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. NuVista's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits NuVista will derive therefrom. NuVista disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:
NuVista Energy Ltd.
Jonathan A. Wright
President and CEO
(403) 538-8501

NuVista Energy Ltd.
Robert F. Froese
VP, Finance and CFO
(403) 538-8530

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.