CALGARY, ALBERTA–(Marketwired – March 21, 2017) – Questfire Energy Corp. (the Corporation or Questfire) (TSX VENTURE:Q.A) is pleased to announce the results of its independent reserves evaluation effective as of December 31, 2016 as prepared by GLJ Petroleum Consultants Ltd. (GLJ), the Corporation’s independent qualified reserves evaluator. The evaluation was prepared in accordance with reserves definitions, standards and procedures contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook. The financial, netback and production figures for 2016 shown herein are currently unaudited.
Highlights of the Reserve Evaluation
Questfire employed cashflow capital spending of $0.65 million in 2016 and achieved an average operating netback of $6.45 per barrel of oil equivalent (boe) and fourth quarter average production of 4,521 boe per day (boepd).
Proved plus Probable Reserves:
- Year end 2016 proved plus probable (P+P) reserves total 28.870 million boe, a decrease of 8 percent over year end 2015 P+P reserves of 31.450 million boe
Total Proved Reserves:
- Year end 2016 total proved (TP) reserves total 17.624 million boe, a decrease of 11 percent over year end 2015 TP reserves of 19.860 million boe
Total Proved Producing Reserves:
- Year end 2016 proved producing (PDP) reserves total 13.474 million boe, a decrease of 11 percent over year end 2015 PDP reserves of 15.151 million boe
Reserve life index (RLI): The RLI at year-end 2016 is 17.5 years for P+P reserves, 10.7 years for TP reserves and 8.2 years for PDP reserves (based on annualized fourth quarter 2016 average production of 4,521 boepd and December 31, 2016 Working Interest Reserves).
- TP reserves accounted for 61 percent of the P+P reserves.
Questfire minimized all spending in response to the low and uncertain commodity price environment in 2016, with only $0.65 million spent on maintenance capital projects and no new drilling. Approximately $11 million of non-core assets were sold during the year, with proceeds thereof used to reduce bank debt. These sold assets had net production of approximately 120 boepd (60 percent gas) average for 2016.
In spite of no new drilling in 2016, Questfire averaged 4,631 boepd of production (24 percent oil and natural gas liquids) for the year, with fourth quarter average production of 4,521 boepd. Compared to 2015 average fourth quarter production of 5,060 boepd, and accounting for the sold production, gives a fourth quarter year-over-year production decline rate of only 9 percent. Such decline rate is very low by industry standards and is a significant advantage for Questfire in a low commodity price environment.
|December 31, 2016 Working Interest Reserve Summary, Before Income Tax and Royalties|
|Reserves Category||Light and Medium Crude Oil (Mbbl)||Heavy Crude Oil
|Natural Gas Liquids
|Total Oil Equivalent
|Proved Developed – Non-Producing||19||7||4,852||171||1,005|
|Total Proved Plus Probable||2,427||330||133,200||3,912||28,870|
Net Present Value (NPV) of Future Net Revenue Before Income Tax
The table below shows the Corporation’s NPV of future net revenue attributable to Total Company Interest reserves using forecast prices and costs, before income taxes and discounted at the rates shown. The price forecast used is the average of GLJ, McDaniel and Associates and Sproule Petroleum Consultants price forecasts effective January 1, 2017. The estimated future net revenues are presented before deducting income tax and are reduced for estimated future abandonment and reclamation costs and future capital costs associated with non-producing, undeveloped and probable additional reserves. Estimated values disclosed do not represent fair market value.
|Proved Developed – Non-Producing||10,756||8,160||7,010||6,373||5,822||5,125||4,225|
|Total Proved Plus Probable||478,221||263,791||199,911||170,208||147,165||121,117||91,795|
Reserve Change Summary
The table below summarizes reserve changes for 2016. All cases include changes in FDC and technical revisions. Total capital spent in 2016 was $0.65 million. The operating netback for 2016 was $6.45 per boe.
|Proved Plus Probable
|December 31, 2015 Working Interest Reserves||A||(15,151||)||(19,860||)||(31,450||)|
|December 31, 2016 Working Interest Reserves||B||13,474||17,624||28,870|
|2016 Full Year Production 1||C||1,695||1,695||1,695|
|2016 Reserve Changes 2||E||189||(214||)||(117||)|
|1||2016 Full Year Production is estimated and remains unaudited at this time.|
|2||2016 Reserve Changes are calculated as the 2016 Working Interest Reserves (B) less the 2015 Working Interest Reserves (A) plus 2016 production (C) plus dispositions (D). Reserve Additions are the change in reserves, removing the impact of production during the year as well as dispositions.|
Reserve Life Index (RLI)
The reserve life index was calculated using the Corporation’s Working Interest Reserves and the 2016 fourth quarter average production rate of 4,521 boepd (includes royalty volumes). The RLI is calculated by dividing reserve volumes (in boe) in each category by the annualized 2016 fourth quarter production rate (in boe/year).
|Proved Producing||Total Proved||Proved Plus Probable|
|Working Interest Reserves (Mboe)||13,474||17,624||28,870|
|Annualized Q4 2016 Production (Mboe/year) 1||1,650||1,650||1,650|
|Reserve Life Index (years)||8.2||10.7||17.5|
|1||Estimated and unaudited fourth quarter production of 415,936 boe divided by 92 days in the fourth quarter, multiplied by 365 days, equals an annualized figure of 1,650,181 boe.|
Questfire Energy Corp. is an Alberta-based company formed to participate in oil and gas exploration, development and acquisitions focusing in the W4 and W5 regions of Alberta. The Corporation’s shares trade on the TSX Venture exchange under the symbol Q.A. The Corporation currently has 22,822,401 Class A shares outstanding.
Complete filings of the Corporation’s Statement of Reserves (form 51-101F1), Report on Reserves (form 51-101F2), and Report of Management and Directors on Oil and Gas Disclosure (form 51-101F3) will be available in the Annual Information Form (AIF) to be filed on or about April 27, 2017 under the Corporation’s profile on SEDAR at www.sedar.com.