Ikkuma Resources Announces 2015 Year-end Reserves

TSX Venture Exchange: IKM

CALGARY, March 2, 2016 /CNW/ – Ikkuma Resources Corp. (“Ikkuma” or the “Corporation“) is pleased to announce its 2015 year-end reserves.

2015 Highlights

• Ikkuma achieved relatively flat PDP reserves at 14.4 MMBoe, increased 1P reserves to 20.0 MMboe and increased 2P reserves 7% to 27.5 MMboe, even with reducing its 2015 capital spending by 25% in response to weakening commodity prices.
• Achieved 1P F&D of $8.95/boe and 2P F&D of $7.27/boe despite operational issues with the drilling program in the first quarter which consumed approximately 39% of total 2015 capital expenditures. All new reserves were attributed to the successful recompletion program. New recompletion operations will continue through 2016, as disclosed previously.
• Ikkuma divested 500 Mboe of 1P reserves and 745 Mboe of 2P reserves during the year for an aggregate of $3.3 million. As a result, the Corporation’s 1P and 2P FD&A (including changes in FDC, revisions and economic factors) was $9.22/boe and $7.76/boe, respectively.
• Ikkuma’s recompletion program accounted for $21.4 million or 61% of total exploration and development expenditures and resulted in adding 1,555 Mboe of PDP reserves and 2,274 Mboe of 2P reserves. Capex included a 12 km pipeline build, which will be used for up to six offset gas wells. A single offset PUD booked on one of the recompletions has been assigned 1,546 Mboe of 2P reserves.
• Total proved plus probable reserves value was relatively unchanged at $202 million (discounted at 10%) as compared to the $208 million reported last year, despite the 25-30% reduction in forecasted price decks.
• Ikkuma’s 2P net asset value at December 31, 2015 is estimated at $2.31/share, 282% above last 30 day average trading price.

Reserves
The detailed reserves data set forth below are based on an independent reserves assessment and evaluation prepared by Sproule Associated Limited (“Sproule”) with an effective date of December 31, 2015, the “Sproule Report”. The following presentation summarizes the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Corporation’s reserves using forecast prices and costs as set out in the Sproule Report. The Sproule Report has been prepared in accordance with 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”). The reserves evaluation was based on the consensus forecast escalated pricing and foreign exchange rates at December 31, 2015 (“Consensus Price”) as outlined in the table herein entitled “Price Forecast”. This Consensus Price forecast is the average of the escalated price forecasts of three independent reserve evaluators, namely Sproule, GLJ Petroleum Consultants Ltd. and McDaniels & Associates Consultants Ltd.

All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of 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 Ikkuma’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater or less than the estimates provided herein. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise.  In addition to the detailed information disclosed in this press release, more detailed information will be included in the Corporation’s Annual Information Form (“AIF”) which will be filed on the Corporation’s profile at www.sedar.com on or before April 30, 2016.

See “Forward Looking Information and Statements and Cautionary Statements” for a statement of principal assumptions and risks that may apply.

The preparation and audit of Ikkuma’s 2015 annual financial statements is not yet complete, and accordingly all financial amounts referred to in this press release are unaudited and represent management’s estimates. Readers are advised that these financial estimates may be subject to change.

Corporate Reserves ^(1,2,5)

Reserve Values ^(1,2,3)

The estimated before tax net present value (“NPV”) of future net revenue associated with Ikkuma’s reserves effective December 31, 2015 and based on the Sproule Report and the Consensus Price forecast are summarized in the following table:

Price Forecast ⁽¹⁾

Reserves Reconciliation ⁽²⁾

Finding and Development Costs

Net Asset Value

Ikkuma’s net asset value per share at December 31, 2015 was $2.31 (P&NG reserves discounted at 10% BT) and $2.19 on a fully diluted basis, as set out in the following table:

About Ikkuma Resources Corp.

Ikkuma Resources Corp. is a diversified junior public oil and gas company listed on the TSX Venture Exchange under the symbol “IKM”, with holdings in both conventional and unconventional projects in Western Canada.  The technical team has worked together for over a decade in the Foothills Region of Western Canada, through two successful, publicly traded companies. The unique skills and repeat success at exploiting a complex, potentially prolific play type are fundamental ingredients for a successful growth-oriented company in Western Canada.  Corporate information can be found at: www.ikkumarescorp.com.

[/expand]