REGINA, SK – ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK) is pleased to announce the results of its April 1, 2022 independent reserves evaluation, which includes the reserve volumes from its recent acquisition (the “Acquisition“), as defined in the press release dated March 7, 2022. The evaluation for the Company as at April 1, 2022 was conducted by McDaniel & Associates Consultants Ltd. (“McDaniel“) of Calgary and was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluators Handbook (“COGEH“) and National Instrument 51-101 – Standards for Disclosure of Oil and Gas Activities (“NI 51-101“). Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day. Reserves volumes reported below are “Total Company Interest Reserves“, a classification of reserves used in the evaluation which represents production and reserves before deduction of royalties.
Summary of Reserves
- Crude oil & natural gas Total Company Interest reserves and present values at April 1, 2022, as provided by McDaniel:
- Proved Developed Producing oil and gas reserves (“PDP“) of 6,900 Mboe and Net Present Value of proved developed producing oil and gas reserves (“PDP“) discounted at 10% (“NPV10%“) and before tax of $113,637,700
- Total Proved oil and gas reserves (“1P“) of 9,290 Mboe and Net Present Value of proved oil and gas reserves (“1P“) discounted at 10% (“NPV10%“) and before tax of $142,941,000
- Total Proved plus probable oil and gas reserves (“2P“) of 15,448 Mboe and Net Present Value of proved plus probable oil and gas reserves (“2P“) discounted at 10% (“NPV10%”) and before tax of $225,471,000
1) |
The tables shown have assessed reserves at forecast crude oil reference prices and costs |
2) |
The inflation rate is 0% in 2022, 2.3% per year in 2023 and 2% per year starting in 2024 |
3) |
Estimated future undiscounted capital costs, in dollars, at March 31, 2022 were CAD $83.6 million for proved reserves and CAD $124.5 million for proved plus probable reserves |
4) |
Total current well & facility abandonment and reclamation costs of CAD $56.6 million were included in the report. Also included, are abandonment and reclamation costs for all future wells assigned reserves. |
5) |
The net present values disclosed may not represent fair market value. |
6) |
Totals may not add exactly due to rounding. |
Financial Hedge
As per NI 51-101, the evaluation does not account for the financial hedge that the Company entered into on March 8, 2022, details of which can be found in the press release dated March 17, 2022. As a result of the WTI hedge on 75% of the Company’s declining Proved Developed Producing barrels, ROK will receive a premium to the price forecast employed by McDaniel from April 2022 through March 2024. The Company estimates the difference in revenue to be $7.0 million1 CAD to ROK’s benefit.
1) |
Assumes foreign exchange rate (CAD/USD) of 0.80. |