CALGARY, ALBERTA–(Marketwired – March 27, 2017) – (TSX VENTURE:BBI) Blackbird Energy Inc. (“Blackbird” or the “Company“) is pleased to announce a 1,002% increase in proved plus probable reserves (“2P“) before tax net present value to $455 million, discounted at 10% (“NPV10%“), and a before tax risked best estimate contingent resources NPV10% (“2C“) value of $437 million. Blackbird has now booked 11.9% of its net Pipestone / Elmworth acreage on a 2P basis and 21.2% of its net Pipestone / Elmworth Montney acreage on a contingent resources basis.
- In 2013, Blackbird began the process of assessing and assembling its Montney acreage at Pipestone / Elmworth through a cost-effective land acquisition strategy. This strategy has resulted in Blackbird holding an aggregate Pipestone / Elmworth Montney land position of 116 gross (100.9 net) sections as at March 27, 2017.
- Blackbird commissioned its level one infrastructure project and commenced production from four Montney wells in January, 2017, with its fifth well expected to be tied-in during the first half of 2017 and its sixth well expected to be tied-in upon the construction of an eastern pipeline gathering system.
- Blackbird recently closed an offering for gross proceeds of $84.8 million, entered into a non-binding nomination for an additional 90 mmcf/d of natural gas processing by 2021, and is implementing a 12 well development and delineation program over the next twelve months.
Highlights of Blackbird’s March 1, 2017 Reserves and Contingent Resources Evaluations
As a result of the historical developments discussed above, Blackbird engaged its independent reserves evaluators, McDaniel & Associates Consultants Ltd. (“McDaniel“), to perform reserves and contingent resources evaluations effective March 1, 2017 (the “Evaluations“).
Highlights from the Evaluations are as follows:
- Total proved reserves (“1P“) volumes increased 913% to 30,526 MBOE (46% natural gas liquids (“NGLs“)).
- Total 1P reserves NPV10% increased 1,356% to $204 million using the McDaniel January 1, 2017 price deck (the “Forecasted Prices“) and forecasted costs.
- As per Figure 1 below, Blackbird has now booked 8 of its Pipestone / Elmworth Montney net sections on a 1P basis. This represents 7.9% of Blackbird’s net Pipestone / Elmworth Montney acreage.
- Total 2P reserves volumes increased 814% to 59,169 MBOE (46% NGLs).
- Total 2P reserves NPV10% increased 1,002% to $455 million using the Forecasted Prices and forecasted costs.
- As per Figure 2 below, Blackbird has now booked 12 of its Pipestone / Elmworth Montney net sections on a 2P basis. This represents 11.9% of Blackbird’s net Pipestone / Elmworth Montney acreage.
- Risked contingent resources low estimate (“1C“) volumes increased from nil to 41,190 MBOE.
- Risked 1C NPV10% increased from nil to $277 million using the Forecasted Prices and forecasted costs.
- Risked 2C volumes increased from nil to 53,818 MBOE.
- Risked 2C NPV10% increased from nil to $437 million using the Forecasted Prices and forecasted costs.
- Risked contingent resources high estimate (“3C“) volumes increased from nil to 64,675 MBOE.
- Risked 3C NPV10% increased from nil to $547 million using the Forecasted Prices and forecasted costs.
- As per Figure 3 below, Blackbird has now booked 21.375 of its Pipestone / Elmworth net Montney sections on a contingent resources basis. This represents 21.2% of Blackbird’s net Pipestone / Elmworth Montney acreage.
- Blackbird has booked 1P reserves, 2P reserves and contingent resources in two Montney intervals. In addition to these two intervals, management believes that there are two additional un-booked highly prospective intervals on the majority of its lands.
Figure 1 – Blackbird’s Lands with Proved Reserves Booked (Outlined in Blue): http://www.marketwire.com/library/20170326-Blackbird_Figure_1-800.jpg
Figure 2 – Blackbird’s Lands with Proved and Probable Reserves Booked (Outlined in Red): http://www.marketwire.com/library/20170326-Blackbird_Figure_2-800.jpg
Figure 3 – Blackbird’s Lands with Contingent Resources Booked (Outlined in Green): http://www.marketwire.com/library/20170326-Blackbird_Figure_3-800.jpg
All reserves and contingent resources volumes referenced above are reported on a company gross basis.
Reserves and Resources Summary
The following table summarizes the Company’s gross reserves and contingent resources volumes by category and the NPV10% as contained in the Evaluations.
|Natural Gas||Natural Gas Liquids (1)||Total Oil Equivalent||NPV 10%||NPV 10%|
|Proved Developed Producing||5,215||848||1,717||33,002||19.22|
|Proved Non Producing||2,012||278||613||10,718||17.48|
|Proved Undeveloped (2) (3)||92,539||12,773||28,196||160,375||5.69|
|Probable Developed Producing||1,785||294||592||10,598||17.93|
|Probable Non Producing||594||89||188||2,973||15.82|
|Probable Undeveloped (3)||89,834||12,892||27,864||237,353||8.52|
|Total Proved Plus Probable (4) (5) (6) (7)||191,979||27,172||59,169||455,018||7.69|
|Contingent Resources Development Pending (Risked) (4)(6)(7) (8) (9) (10) (11) (12)|
|(1)||Includes field condensate.|
|(2)||The Reserve Report contemplates 46 undeveloped 1P drilling locations.|
|(3)||The Reserve Report contemplates 70 undeveloped 2P drilling locations.|
|(4)||Drilling and completions cost per location contemplated in the Evaluations is $6 million.|
|(5)||Total undiscounted 2P capital expenditures contemplated in the reserve report amount to $515 million.|
|(6)||The Evaluations contemplate an expected ultimate recovery of 801,000 boe per undeveloped location (46% NGLs).|
|(7)||Blackbird has a 100% working interest in the lands associated with the reserves and contingent resources.|
|(8)||Blackbird expects to recover natural gas and NGLs.|
|(9)||See “Advisories and Forward Looking Information” below for a discussion regarding the risks and the level and uncertainty associated with contingent resources.|
|(10)||All of the contingent resources discussed above are located at the Company’s Pipestone / Elmworth Montney project where ongoing development drilling is already occurring. For an illustration of the location of the contingent resources, see Figure 3.|
|(11)||Project maturity subclass development pending is defined as contingent resources where resolution of the final conditions for development is being actively pursued (high chance of development).|
|(12)||Contingent resources for Pipestone have been estimated based on the continued drilling in Blackbird’s active core asset and the associated pre-development study using established recovery technologies. The estimated cost to bring these contingent resources on commercial production is $562MM and the expected timeline is between 1 and 6 years. The specific contingencies for these resources are corporate commitment, development timing and uncertainty on additional required gas processing and takeaway capacity.|
Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the liquids-rich Montney fairway at Pipestone / Elmworth, near Grande Prairie, Alberta.