CALGARY, AB – Avila Energy Corporation (“Avila” or the “Company“), trading symbol “VIK”, announces its election to assume 100% of the interests and activities of its Joint Venture in northeast British Columbia (the “NEBC Property”) in, and for, the fiscal year ended December 31 2022.
Pursuant to this election, the Company has (i) agreed to assume, effective July 1, 2022, 100% of the interests and obligations of the Joint Venture in the NEBC Property and (ii) engaged the Company’s independent Qualified Reserves Evaluators (“QRE”); Deloitte LLP, to complete an evaluation of 100% of the interests in the NEBC Property consisting of 89,825 (net) acres and 97,743 (gross) acres, 73.6 wells (net) and 78 wells (gross), and 2 facilities.
Concurrently, the Company has received its independent evaluation in accordance with the COGE Handbook from the QRE, as of July 25th, 2022, for the acquisition of the NEBC Property, resulting in the acquisition of proven and probable ( “2P” ) reserves of 27.004 million boe, currently producing 1,200 boe/d (net) prior to the advancement and completion of a facilities upgrade and remediation plan at the 100% owned and operated facility. Upon the completion of the aforesaid facilities upgrade and remediation the shut-in proven developed assets are anticipated to produce an additional 3,800 boe/d (net) of natural gas and liquids.
Management projects that, on or about September 30 2022, the Company’s Alberta assets combined with the NEBC Property assets are anticipated to be producing 2,000 boe/d comprised of approximately 10% oil; 200 bbls/d(net) and 90% natural gas and liquids; 10,200 mcf/d (net) or 1,800 boe/d (net) with further growth to occur as a result of a combination of development drilling in Alberta and the aforesaid completion of the upgrades and remediation work to the NEBC Property, all production numbers provided are based on a 6:1 gas/oil ratio (1bbl = 6 mcf) per ‘boe’.
Following the acquisition of the NEBC Property, the Company’s book value is estimated by management to be a net $25,343,280 including fulfillment of asset retirement obligations (“ARO”), less the assumption of current obligations estimated to be $3,493,780 (to be paid in cash) and long term decommissioning liabilities of $21,849,500.
In 2022 and 2023 the capital programs budgeted for the NEBC Property are estimated to be approximately $13,000,000 plus future obligations of approximately up to $5,000,000, to be funded from cash on hand and future cash-flow.
The Evaluation** completed by the QRE for the assets acquired by the acquisition of the NEBC Property (requested by the Company) has resulted in the following reserves and before tax values being assigned to the NEBC Property by the QRE:
PDP – 3,622,200 boe with a 10% discounted NPV of $ 34,598,400
PD – 19,385,300 boe with a 10% discounted NPV of $ 140,610,100
TP – 19,385,300 boe with a 10% discounted NPV of $ 140,610,100
2P – 27,004,100 boe with a 10% discounted NPV of $ 171,539,300
**Based on the QRE (Deloitte LLP) published Price Deck dated June 30, 2022, a summary of which is as follows:
- The QRE prepared an independent evaluation of reserves and future net revenues derived from, the Petroleum and Natural Gas assets interests of Avila according to the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”); and
- As required, these reserves and future net revenues were estimated using forecast prices and costs (before and after income taxes) according to the requirements of National Instrument 51-101 (“NI 51-101”). The effective date of this evaluation is July 1, 2022.
The Canadian Securities Exchange (“CSE“) has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.