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Border Petroleum Corp. (TSX VENTURE:BOR) (“Border” or the “Company“) announces the results of its 2013 year-end oil and gas reserves evaluation and provides shareholders with a corporate update.
Border’s March 31, 2013 year-end reserves were evaluated in a report (the “Sproule Report“) prepared by independent reserves evaluator Sproule & Associates Consultants Ltd. (“Sproule“). The evaluation of all of Border’s oil and gas properties was done in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook“) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101“). Additional information about Border’s properties as required under NI 51-101 will be included in the Company’s Annual Information Form which is expected to be filed on SEDAR in July 2013.
Summary of Reserves
As at March 31, 2013(1)
| Gross Company Reserves | |||||
| Description | Light Oil (Mbbl) |
Heavy Oil (Mbbl) |
Gas (MMcf) |
NGL (Mbbl) |
Total (Mboe)(3) |
| Proved Producing | 93.1 | 7.2 | 768 | 21.1 | 249.3 |
| Proved Non-Producing | 0 | 0 | 465 | 13.3 | 90.8 |
| Proved Undeveloped | 300.0 | 0 | 0 | 0 | 300.0 |
| Total Proved(2) | 393.1 | 7.2 | 1,233 | 34.4 | 640.1 |
| Probable | 826.4 | 3.9 | 760 | 21.4 | 978.6 |
| Total Proved plus Probable(2) | 1,219.5 | 11.1 | 1,993 | 55.8 | 1,618.7 |
(1) Based on Sproule’s forecast prices as of March 31, 2013.
(2) Gross Company reserves are the Company’s total working interest share before the deduction of royalties.
(3) A conversion ratio of 6 mcf of natural gas to 1 bbl of oil is used. See “Notes Regarding Oil and Gas Disclosure” below.
Summary of Before Tax Net Present Values
As at March 31, 2013(1)
| Before Tax Net Present Value ($MM) | |||||
| Discount Rate | |||||
| Description | 0% | 5% | 10% | 15% | 20% |
| Proved Producing | 3,460 | 3,101 | 2,820 | 2,595 | 2,412 |
| Proved Non-Producing | 465 | 390 | 330 | 282 | 243 |
| Proved Undeveloped | 6,111 | 3,424 | 1,707 | 567 | -212 |
| Total Proved | 10,036 | 6,915 | 4,857 | 3,444 | 2,443 |
| Probable | 29,407 | 19,086 | 13,059 | 9,211 | 6,580 |
| Total Proved Plus Probable | 39,443 | 26,001 | 17,916 | 12,655 | 9,023 |
(1) Based on Sproule’s forecast prices as of March 31, 2013.
Future Development Costs
As at March 31, 2013(1)
| (000’s) | Proved Future Development Cost |
Proved Plus Probable Future Development Cost |
| 2013 | 0 | 3,586 |
| 2014 | 10,239 | 24,578 |
| Undiscounted Total | 10,239 | 28,164 |
| Discounted @ 10%/yr | 9,054 | 25,161 |
(1) Future Development Costs shown are associated with booked reserves in the Sproule Report and do not necessarily represent the Corporation’s full exploration and development budget.
(2) The numbers in this table may not add exactly due to rounding.
Corporate Update:
Border currently has a positive working capital balance of approximately $7.3 million and an unutilized bank line of $3.5 million. Border’s current total production is approximately 230 boepd (26 percent liquids). Border’s tax pool balance as at December 31, 2012 was approximately $32.1 million with an additional $17.5 million of successored pools primarily related to its Leduc properties. Further, after taking into account qualifying expenditures of approximately $1.0 million in the quarter ended March 31, 2013, the Company has approximately $2.0 million of outstanding obligations to incur Canadian Exploration Expenses.
Under the direction of the Special Committee, the financial advisors to the Special Committee and management have commenced populating the virtual data room to be used in connection with the previously announced strategic alternatives process and continue their build out of the information package that will be provided to interested parties. The data room and information package are anticipated to be complete within the next seven days.
Border does not intend to disclose developments with respect to the strategic review process unless and until the Board of Directors has approved a definitive transaction or strategic option, or unless otherwise required by law or disclosure of which is deemed appropriate. The Company cautions that there are no guarantees that the strategic review will result in a transaction or if a transaction is undertaken, as to its terms or timing.
Border currently has 332,978,953 common shares outstanding.
Forward-Looking Statements
This press release contains forward-looking statements with respect to estimates of the quantities of proved reserves and probable reserves and related net present values and future development costs, as well as Border’s strategic review process.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Border. Although Border believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Border can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking statements contained in this document are made as of the date hereof and Border undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Notes Regarding Oil and Gas Disclosure
As used in this press release, “boe” means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
It should not be assumed that the present worth of estimated future net revenue represents the fair market value of the reserves disclosed in this press release. The reserve and related revenue estimates set forth in this press release are estimates only and the actual reserves and realized revenue may be greater or less than those calculated.
Abbreviations
| Crude Oil | Natural Gas | ||
| bbl | barrel | Mcf | thousand cubic feet |
| bbls | barrels | MMcf | million cubic feet |
| Mbbls | thousand barrels | ||
| MMbbls | million barrels | ||
| boepd | barrels of oil equivalent per day | ||
| $M | thousands of dollars | ||
| $MM | millions of dollars | ||
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