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 is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed ...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
While many government agencies have embraced the idea of employing cloud computing as a tool for increasing the efficiency and flexibility of IT, many still struggle with large scale adoption. The challenge is mainly attributed to the federated structure of these agencies as well as the immaturity of brokerage and governance tools and models. Initiatives like FedRAMP are a great first step toward solving many of these challenges but there are a lot of unknowns that are yet to be tackled. In hi...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
The proper isolation of resources is essential for multi-tenant environments. The traditional approach to isolate resources is, however, rather heavyweight. In his session at 18th Cloud Expo, Igor Drobiazko, co-founder of elastic.io, drew upon his own experience with operating a Docker container-based infrastructure on a large scale and present a lightweight solution for resource isolation using microservices. He also discussed the implementation of microservices in data and application integrat...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...