Calgary, Alberta – Cuda Oil and Gas Inc. (TSXV: CUDA) (“Cuda” or the “Company”) is pleased to release the results of its December 31st, 2020 Oil and Gas Reserves Evaluation (“2020 Reserves Report“) for Wyoming and Alberta. Cuda recorded significant progress in maturing its major asset at Barron Flats Shannon Secondary Recovery Unit (“SSRU“) in the Powder River Basin of Wyoming.
In the 2020 Reserves Report, Ryder Scott has identified significant increases to the Company’s estimated Proven Developed Producing (“PDP“) reserves, increasing by 77% as compared to December 31st, 2019. This third-party validation of the Company’s asset confirms the positive performance of the miscible gas flood project and remarkable accomplishment by the Company to dramatically increase PDP reserves in an extremely volatile environment.
Despite the challenges posed by Covid-19 and the volatile price environment, gas flood injection volumes exceeded over 1 billion cubic feet of gas equivalent into the SSRU with eight gas injection wells online at year-end 2020. Initial production response has been notable in 19 of the 33 total producing oil wells in the gas flood area with the two most advanced injection patterns in the south eastern section of the pool (the William Valentine and BFU 11-26 Patterns) receiving almost 50% (500 million cubic feet) of total injection volumes. Supported by the reservoir simulation projections, production in these patterns have increased sharply, from 167 bbls/d in January 2020, to 456 bbls/d in January 2021. This represents an increase of 289 bbls/d or 173% year over year incline excluding new production drilling. The SSRU joint venture partners are planning an aggressive injection ramp up starting April 2021, should oil prices gain upward momentum.
Cuda emphasizes that oil production continues to increase in wells proximal and adjacent to the injection wells. These results and bookings align the SSRU project to ultimate recovery results of the adjacent analogue field, the Sand Dunes Miscible Gas Flood (“Sand Dunes“). Over its project life, Sand Dunes recovered approximately 50% of the 48 MMbbls of OOIP or 25 MMbbls. For perspective, the Company’s SSRU Project was assigned 121 MMbbls of OOIP in the 2020 Reserves Report, volumetrically 60% larger than Sand Dunes. Current simulation modeling by a third-party expert indicates up to 51 MMbbls, based on 100% WI, could ultimately be recovered in a full field development scenario inclusive of future development capital.
Reserves Report Highlights
All reserves information contained in this press release is based on the 2020 Reserves Report and includes reserves attributed to the SSRU, the Cole Creek Unit and Alberta assets. Unless specifically indicated, all financial and operational information in this press release is based on estimates and is unaudited and accordingly, such financial information is subject to change based on the results of the Company’s audit.
Proven Developed Producing Reserves (“PDP”)
- The Company’s PDP reserves grew 77% over 2019 reserves to 3,843 Mboe (90% oil and liquids).
- NPV10 of $40.7 Million.
- Reserve Life Index (“RLI“) of 18.2 years, based on Q4 2020 production.
Total Proved Reserves (“1P”)
- The Company’s 1P reserves decreased by 2% from 2019 reserves, to 7,440 Mboe (89% oil and liquids).
- NPV10 of $62.3 Million.
- RLI of 35.3 years.
Proved plus Probable Reserves (“2P”)
- The Company’s 2P reserves decreased by 3% over 2019 reserves, to 14,396 Mboe (91% oil and liquids).
- NPV10 of $111.8 Million.
- RLI of 68.2 years.
Future development costs associated with the 1P and 2P categories are $64.5 million and $121.7 million, respectively.
|bbls||Barrels of oil|
|bbls/d||Barrels of oil per day|
|MMbbls||Million barrels of oil|
|BOE||Barrel of oil equivalence|
|Mboe||Thousand barrels of oil equivalent|
|NPV10||Valuation based on discounted value of the reserves after all capital development, operating, costs, and royalties before taxes, discounted to present day dollars|
Oil and Gas Reserves
The 2020 Reserve Report represents Cuda’s oil and gas properties in Alberta and Wyoming and was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51 – 101“) by Ryder Scott, the Company’s independent reserves evaluator. The following table summarizes certain information contained in the 2020 Reserve Report:
|Total BOE 1
|Total BOE 1
|Proved Developed Producing||3,226||2,366||223||3,843||2,169|
|Proved Developed Non-Producing||43||1,171||14||253||1,020|
|Total Proved Plus Probable||12,320||7,858||766||14,396||14,872|
1. BOEs are derived by converting gas to oil equivalent in the ratio of six thousand cubic feet of gas to one barrel of oil (6 Mcf:1 bbl).
Summary of Net Present Values of Future Net Revenue (Before Tax)3
(based on forecast price and costs)
|At December 31, 20201||At December 31, 20192|
|Proved Developed Producing||40,651||28,284|
|Proved Developed Non-Producing||1,404||12,625|
|Total Proved Plus Probable||111,805||178,165|
1. Forecast pricing based on Ryder Scott published price forecasts effective December 31, 2020.
2. Forecast pricing based on Ryder Scott published price forecasts effective December 31, 2019.
3. Estimates of future net revenue do not represent fair market value.
About Cuda Oil and Gas Inc.
Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long-term focus on large, light oil resource- based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.