Welcome!

News Feed Item

Terra Energy Announces 2013 Year-End Reserves Evaluation and Related Metrics

CALGARY, ALBERTA -- (Marketwired) -- 03/27/14 -- Terra Energy Corp. ("Terra" or the "Company") (TSX: TT) is pleased to announce the results of its year-end reserves evaluation, as prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as at December 31, 2013 (the "GLJ Report"). This evaluation was performed in accordance with the requirements of National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). In addition, the Company would like to announce the results of its independent valuation of undeveloped lands, as prepared by Seaton-Jordan & Associates Ltd. ("Seaton-Jordan").

Highlights

As a result of efforts to reduce debt and strengthen the balance sheet, Terra sold properties during calendar 2013 representing approximately 10,068 mboe of proved and probable reserves ("2P reserves"), or approximately 38% of the Company's December 31, 2012 2P reserves as estimated by GLJ. Total net debt has been reduced in the Company from the level of approximately $77MM at December 31, 2012 to approximately $21MM at year-end 2013. Furthermore, as a result of serious capital constraints during 2013, the Company expended an amount of only $2.3MM of capital throughout the entire year. As a result of the Company's efforts in creating efficiencies, seeking out cost savings and further geotechnical work, the total 2P reserves estimate at year-end decreased by less than the amount of 2P reserves that the Company sold.

The following are reserves evaluation highlights for year-end 2013, comparing results as at December 31, 2013 and those as at December 31, 2012:


--  Total proved and probable reserves decreased 9,211 mboes or 35% from
    26,571mboe to 17,360 mboe, after having sold approximately 10,068 mboe
    or 38% of opening 2P reserves and after having produced 1,404 mboe
    during the year

--  Net Present Value (before tax) of total proved and probable reserves
    (NPV 10%) decreased from $183.4 million as at December 31,2012 by only
    4% to $ 175.6 million as at December 31, 2013

--  Total proved reserves decreased 12 % from 13,258 mboe to 11,698 mboe

--  Reserve life index calculated at year-end 2013 is 9.1 years on total
    proved reserves and 13.5 years on total proved and probable reserves,
    using average daily production from the 4th quarter 2013 of 3,518 boe/d

--  NAV per share as at December 31, 2013 is estimated at approximately
    $1.85 basic, and $1.81 diluted

Oil and Gas Reserves

The following tables summarize certain information contained in the GLJ reserves report effective December 31, 2013. Detailed reserves information as required under NI 51-101 will be included in Terra's Annual Information Form which will be filed on SEDAR prior to March 30, 2014. Oil equivalent amounts have been calculated using a conversion rate of 6,000 cubic feet of natural gas to one barrel of oil.


Reconciliation Summary
                                                        Oil
                                                 Equivalent
                                                     (Mboe)
                                     Proved        Probable    Total Proved
                                                              plus Probable

Opening Balance - Dec 31, 2012       13,258          13,313          26,571
 Dispositions during year            (2,312)         (7,756)        (10,068)
                                  -----------------------------------------
Adjusted Reserves Base               10,946           5,557          16,503
 Technical revisions                  1,544            (525)          1,019
 Drilling Extensions                    271             557             828
 Infill Drilling                        133              59             192
 Improved Recovery                      244             113             357
 Economic Factors                       (37)            (98)           (135)
 Current Year Production             (1,404)              -          (1,404)
                                  -----------------------------------------
Closing Balance - Dec 31, 2013       11,697           5,663          17,360
                                  -----------------------------------------
                                  -----------------------------------------

Summary of Reserves by Category

-------------------------------------------------------------------------------------
                           December
                                31,
                               2012
                                                 December 31, 2013
Forecast
Prices
and Costs
                                                Natural                      % Change
Reserves                      Total       Oil       Gas   Liquids     Total     Total
Category                     (mboe)    (mbbl)    (mmcf)   (mmbls)    (mboe)    (mboe)
-------------------------------------------------------------------------------------
Proved Producing              8,442       862    37,090       738     7,781       -8%
Proved Non-Producing          4,816       843    16,603       306     3,917      -19%
-------------------------------------------------------------------------------------
Total Proved                 13,258     1,705    53,693     1,044    11,698      -12%
Total Probable               13,313     1,316    23,722       392     5,663      -58%
-------------------------------------------------------------------------------------
Total Proved + Probable      26,571     3,021    77,415     1,437    17,360      -35%
-------------------------------------------------------------------------------------

The estimated future net revenues are presented before deducting future estimated site restoration costs and are reduced for future abandonment costs and estimated future capital for future development associated with non-producing, undeveloped and probable additional reserves.


Summary of Net Present Values of Future Net Revenue ($000's) Discounted
 Before Income Taxes

----------------------------------------------------------------------------
Forecast Prices          December 31, 2012 December 31, 2013    % Change
Reserves Category              0%      10%       0%      10%      0%     10%
----------------------------------------------------------------------------
Proved Producing          117,173   75,639  128,708   84,713     10%     12%
Proved Non-Producing       68,614   33,172   61,749   39,620    -10%     19%
----------------------------------------------------------------------------
Total Proved              185,787  108,811  190,457  124,332      3%     14%
Total Probable            217,703   74,618  108,231   51,290    -50%    -31%
----------------------------------------------------------------------------
Total Proved + Probable   403,490  183,429  298,688  175,622    -26%     -4%
----------------------------------------------------------------------------

The forecast prices used in the GLJ reserves report were GLJ's forecast prices as at January 1, 2014 as presented below.


--------------------------------------------------------------------
AECO (CDN$/mmBtu)
                Dec 31, 2012        Dec 31, 2013        % Difference
Year              Evaluation          Evaluation      Year over Year
--------------------------------------------------------------------
2014                   $3.83               $4.03                5.2%
2015                   $4.28               $4.26               -0.5%
2016                   $4.72               $4.50               -4.7%
2017                   $4.95               $4.74               -4.2%
2018                   $5.22               $4.97               -4.8%
--------------------------------------------------------------------
WTI (US$/BBL)
--------------------------------------------------------------------

2014                  $92.50              $97.50                5.4%
2015                  $95.00              $97.50                2.6%
2016                  $97.50              $97.50                 N/C
2017                  $97.50              $97.50                 N/C
2018                  $97.50              $97.50                 N/C
--------------------------------------------------------------------
(1)Inflation is accounted for at 2.0% per year

Land Valuation

Terra's gross undeveloped land holdings decreased from 641,584 gross acres (527,954 net) as at December 31, 2012 to 462,693 gross acres (311,921 net) as at December 31, 2013, representing a decrease of 28% (41% net). The decrease was largely attributable to undeveloped land expiring and being sold by the Company.

Below is a summary of the Company's undeveloped land holdings, broken down by province:


----------------------------------------------------------------------------
Province               December 31, 2013             December 31, 2012
                          Gross            Net          Gross            Net
                        Acreage        Acreage        Acreage        Acreage
----------------------------------------------------------------------------
Alberta                 206,191        159,764        374,727        333,408
British Columbia        256,095        152,117        266,533        194,546
Saskatchewan                406             40            325            GOR
----------------------------------------------------------------------------
Totals                  462,693        311,921        641,585        527,954
----------------------------------------------------------------------------

-------------------------------------------------------------
Province            Undeveloped Land Values          % Change
                           2013           2012
-------------------------------------------------------------
Alberta             $12,453,639    $18,243,575       (31.73%)
British Columbia    $20,909,598    $43,198,979       (51.60%)
Saskatchewan            $15,403           $644          2292%
-------------------------------------------------------------
Totals              $33,378,640    $61,443,198
-------------------------------------------------------------

The undeveloped land holdings of the Company were evaluated as at December 31, 2013 by Seaton-Jordan. The value of Terra's net undeveloped land holdings is estimated to be approximately $33.3 million as at December 31, 2013. This valuation represents a decrease of 46% compared to last year's valuation of undeveloped land as prepared by Seaton-Jordan.

Net Asset Value (NAV)

Terra's NAV per share as at December 31, 2013 is calculated as follows:


-----------------------------------------------------------------
As at December 31
($000's)                                    2012             2013
-----------------------------------------------------------------
P+P Reserves (NPV 10%)           $       183,430  $       175,622
Undeveloped Land (1)             $        61,443  $        33,379
Net Debt                         $       (77,247) $       (20,982)
                                ---------------------------------

Net Asset Value                  $       167,626  $       188,019
                                ---------------------------------

Shares Outstanding                       101,663          101,663
Basic NAV per Share              $          1.65  $          1.85
                                ---------------------------------

Option and Warrant Value         $         7,271  $         4,316
Option and Warrant Shares                  6,378            4,795

Diluted Net Asset Value          $       174,897  $       192,335
Diluted Shares Outstanding               108,041          106,458

Fully Diluted NAV per Share      $          1.62  $          1.81
-----------------------------------------------------------------
(1) Based on December 31, 2012 and 2013 Seaton-Jordan reports

Terra Energy Corp. is a junior oil and gas company engaged in the exploration for, and the development and production of, natural gas and oil in Western Canada. Terra's Common Shares trade on the Toronto Stock Exchange under the symbol "TT".

Reader Advisory

All amounts in Canadian dollars unless otherwise specified.

Information Regarding Disclosure in Oil and Gas Reserves and Operational Information

A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe's may be misleading, particularly if used in isolation. Additionally, given the value ratio based on the current price of crude oil compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion ratio of 6:1 may be misleading as an indication of value.

In accordance with Canadian practice, production volumes are reported on a company gross basis, before deduction of Crown and other royalties, unless otherwise stated. Unless otherwise specified, all reserve volumes in this media release and all information derived there from are based on "company interest reserves" using forecast prices and costs. "Company interest reserves" consist of "company gross reserves" (as defined in National Instrument 51-101 adopted by the Canadian Securities Regulators ("NI 51-101") plus Terra's royalty interests in reserves. "Company interest reserves" are not a measure defined in NI 51-01 and does not have a standardized meaning under NI 51-101. Accordingly our Company interest reserves may not be comparable to reserves presented or disclosed by other issuers. Our oil and gas reserves statement for the year ended December 31, 2010, which will include complete disclosure of our oil and gas reserves and other oil and gas information in accordance with NI 51-101, will be contained within our Annual Information Form which will be available on our SEDAR profile at www.sedar.com. In relation to the disclosure of estimates in the operations update discussion, such estimates for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

In relation to the disclosure of net asset value ("NAV"), the NAV table shows what is normally referred to as a "produce-out" NAV calculation under which the current value of the Company's reserves would be produced at forecast future prices and costs and do not necessarily represent a "going concern" value of the Company. The value is a snapshot in time and is based on various assumptions including commodity prices and foreign exchange rates that vary over time. The future net revenues estimated by GLJ do not represent the fair market value of the reserves, nor should it be assumed that Terra's internally estimated value of its undeveloped land holdings represent the fair market value of the lands.

Forward Looking Statements

All forward looking statements contained herein that are not clearly historical in nature constitute forward looking statements, and the words "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "propose", "predict", "potential", "continue", or the negative of these terms or other comparable terminology are generally intended to identify forward looking statements. Although Terra believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including, without limitation: volatility in the market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems; fluctuations in foreign exchange or interest rates; health, safety and environmental risks; stock market volatility; global economic events or conditions; and other factors, many of which are beyond the control of the Company. We caution that the forgoing list of risks and uncertainties is not exhaustive.

Terra's actual results, performance or achievement could differ materially from those anticipated in these forward-looking statements and accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur. As such, readers are cautioned not to place undue reliance on the forward-looking statements, 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 further detail in our Annual Information Form and other documents available at www.sedar.com.

The reader is cautioned that historical results are not necessarily indicative of future performance. 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, Terra 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.

The Company and its management believe that the financial outlook information contained herein has been prepared on a reasonable basis, reflecting the best estimates and judgements, and represent, to the best of management's knowledge and opinion, the Company's expected expenditures and results of operations. However, because this information is highly subjective and subject to numerous risks, including the risks discussed herein and in Terra's Annual Information Form and Management's Discussion and Analysis, it should not be relied on as necessarily indicative of future results. Except as required by applicable law, Terra undertakes no obligation to update any financial outlook information.

Contacts:
Terra Energy Corp.
Bud Love
Vice President of Finance, & Chief Financial Officer
403.699.7777
403.264.7189 (FAX)

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
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?