The independent reserves evaluation is focused on Aroway’s 100% owned and operated oil producing property in West Hazel, Saskatchewan. Aroway Energy purchased the property effective November 27, 2012 and owns a 100% working interest in the producing oil property. The West Hazel property at the time of the acquisition had a third party reserve report which the company had reviewed in the diligence process prior to completing the sale. Once the Company had the opportunity to manage the wells and create an optimization strategy for the property, Trimble Engineering Associates Ltd. (“Trimble”) was engaged to complete a new report as at December 1, 2012.
Chris Cooper, President & CEO commented, “We are extremely pleased with the results of Trimble’s evaluation on our 100% owned and operated West Hazel Property. The report is a reflection of our strategy to acquire assets at their proven value or less, and in this case we paid 32% below the proven value and 57% below the proven plus probable value discounted at 10% before tax. We have begun the regulatory process of down spacing the West Hazel property to facilitate the drilling of additional oil wells and designing a water handling facility in order to approximately double current production, reduce our operating costs and extend the life of the reserves. We will continue to be active in the acquisition arena while we work up our 2013 summer and winter drill program over spring breakup.”
Highlights of Trimble Report:
Proved Reserves
Proved plus Probable Reserves
Summary of Reserves for the West Hazel Property
| Aroway Energy Inc. | |||
| SUMMARY OF RESERVES | |||
| December 1, 2012 | |||
| Proved Developed Producing | Total Proved | Proved Plus Probable | |
| Oil – Mbbl | |||
| Company Net | 86.3 | 168.6 | 258.3 |
| Aroway Energy Inc. | |||
| PRESENT WORTH OF FUTURE NET REVENUE | |||
| Before Income Tax (M$ Cdn.) | |||
| December 1, 2012 | |||
| Proved Developed Producing | Total Proved | Proved Plus Probable | |
| Undiscounted | 2,625.5 | 5,168.5 | 8,495.2 |
| Discounted @ 5% | 2,492.7 | 4,531.1 | 7,299.2 |
| Discounted @ 10% | 2,376.4 | 4,062.7 | 6,423.0 |
| Discounted @ 15% | 2,273.8 | 3,704.5 | 5,755.0 |
| Discounted @ 20% | 2,182.7 | 3,421.3 | 5,228.3 |
The reserves data set forth below is based upon an independent reserves evaluation prepared by Trimble Engineering Associates Ltd. (“Trimble”) with an effective date of December 1, 2012 (the “Trimble Report”). The following presentation summarizes Aroway Energy’s crude oil reserves and the net present values before income tax of future net revenue for Aroway’s reserves on Aroway Energy’s West Hazel Saskatchewan property only, using forecast prices and costs based on the Trimble Report. The Trimble Report has been prepared in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and NI 51-101.
All evaluations and reviews of future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of our crude oil reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil reserves may be greater than or less than the estimates provided herein. Reserves included herein are stated on a company net basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise. In addition to the information disclosed in this news release, more detailed information will be included in Aroway’s Annual Information Form which will be available on SEDAR at www.sedar.com by October 28, 2013. All amounts are expressed in Canadian dollars unless otherwise noted. Due to rounding, certain columns may not add exactly.
ABOUT AROWAY ENERGY INC.
Aroway Energy Inc. is a Western Canadian junior oil focused production and Exploration Company participating in oil development & exploration prospects in Alberta and Saskatchewan, Canada. Through a joint venture partnership in the Peace River Arch of Northern, Alberta, Aroway and its Partner have assembled a land package of 110 sections (70,400 acres) with 3D seismic coverage over almost all of its lands. All exploration and development targets are in close proximity to tie-in, gathering and plant infrastructure, controlled and owned by Aroway’s Joint Venture Partner. Aroway also has 100% operated working interest on a 3D seismically defined exploration property in Central Alberta and a highly economic heavy oil producing property in West Hazel, Saskatchewan.
ON BEHALF OF AROWAY ENERGY INC
Chris Cooper, President & CEO
A conversion ratio of 1 barrel of oil equivalent (“boe”); 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip nd does not necessarily represent a value equivalency at the wellhead. Boes may be misleading, particularly if used in isolation.
Aroway Energy Inc.
Chris Cooper
President & CEO
Toll Free: 1-855-427-6929
cooper@arowayenergy.com
Aroway Energy Inc.
Judy-Ann Pottinger
Director of Communications
oll Free: 1-855-427-6929 or Mobile: 604-617-5290
jpottinger@arowayenergy.com
www.arowayenergy.com