REGINA, SK – ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK) is pleased to announce the results of its December 31, 2022 independent reserves evaluation. The evaluation for the Company as at December 31, 2022 was conducted by McDaniel & Associates (“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“). The reserve volumes do not include the Company’s recent acquisition, defined in the news release dated January 24, 2023. ROK has engaged McDaniel to prepare a proforma corporate reserves update, which is expected to be released in Q2 2023. For a summary of the acquisition reserves, please refer to the section below entitled 2023 Acquired Reserves.
2022 Reserves Highlights
ROK’s 2022 reserves evaluation reflects the addition of 6.4 million Boe of PDP reserves to a total of 6.8 million Boe, representing a 1,600% increase year-over-year. ROK also materially increased Total Proved reserves (850%) and Total Proved plus Probable reserves (680%), due largely to the acquisition of Federated Co-op Limited’s assets in March 2022.
- Proved oil and gas reserves (“1P“) of 9,727,000 Boe and Net Present Value of 1P reserves discounted at 10% (“NPV10“) of $135,762,800
- Proved plus probable oil and gas reserves (“2P“) of 16,043,800 Boe and Net Present Value of 2P reserves discounted at 10% (“NPV10“) of $218,778,700
- Total 1P NAV9 of $0.47/basic share and 2P NAV9 of $0.87/basic share, a YoY increase of 213% and 164%, respectively
- Finding, Development and Acquisition (“FD&A“)8 costs, including changes in Future Development Capital (“FDC“)3, of:
- PDP: $16.43/boe
- 1P: $16.62/boe
- 2P: $12.78/boe
- With a 2022 average operating netback7 of $48.08/boe (before hedge gains), FD&A Recycle Ratios of:
- PDP: 2.9x
- 1P: 2.9x
- 2P: 3.8x
Summary of Oil & Gas Reserves6 as of Dec 31, 2022 | |||||||||
Reserves – Total Company Interest | Light and Medium Oil | Conventional Natural Gas | Natural Gas | Total | |||||
Mbbl | MMcf | Liquids Mbbl | Mboe | ||||||
Total Proved Developed Producing |
4,456 |
11,977 |
389 |
6,841 |
|||||
Total Proved |
6,480 |
16,157 |
554 |
9,727 |
|||||
Total Probable |
3,460 |
14,127 |
502 |
6,317 |
|||||
Total Proved plus Probable |
9,940 |
30,284 |
1,056 |
16,044 |
|||||
Summary of Net Present Values as of Dec 31, 2022 (Before Income Tax)2,3,4,5 | |||||||||
Before Tax Present Value (M$) | Undiscounted | 5% | 10% | 15% | |||||
Total Proved Developed Producing |
115,530 |
108,854 |
97,308 |
87,755 |
|||||
Total Proved |
185,745 |
159,820 |
135,763 |
117,516 |
|||||
Total Probable |
177,618 |
114,903 |
83,016 |
63,708 |
|||||
Total Proved plus Probable |
363,362 |
274,723 |
218,779 |
181,224 |
|||||
Price Forecast2 (Sproule, GLJ, McDaniel Average), Jan 1, 2023 | |||||||||
Year | F/X | WTI | Cromer Medium | Alberta AECO | |||||
USD/CAD | USD/bbl | CAD/bbl | CAD/Mmbtu | ||||||
2023 |
0.75 |
80.33 |
99.13 |
4.23 |
|||||
2024 |
0.77 |
78.50 |
93.32 |
4.40 |
|||||
2025 |
0.77 |
76.95 |
90.90 |
4.21 |
|||||
2026 |
0.77 |
77.61 |
91.25 |
4.27 |
|||||
2027 |
0.78 |
79.16 |
92.67 |
4.34 |
|||||
2028 |
0.78 |
80.74 |
94.52 |
4.43 |
|||||
2029 |
0.78 |
82.36 |
96.42 |
4.51 |
|||||
2030 |
0.78 |
84.00 |
98.34 |
4.60 |
|||||
2031 |
0.78 |
85.69 |
100.31 |
4.69 |
|||||
2032 |
0.78 |
87.40 |
101.85 |
4.79 |
|||||
Reconciliation of Total Company Reserves | ||||||||||||
Total Light & Medium Crude |
Total Natural Gas |
Total Natural Gas Liquids |
BOE |
|||||||||
FACTORS | Proved | Probable | Proved + Probable | Proved | Probable | Proved + Probable | Proved | Probable | Proved + Probable | Proved | Probable | Proved + Probable |
Mbbl | Mbbl | Mbbl | MMcf | MMcf | MMcf | Mbbl | Mbbl | Mbbl | Mboe | Mboe | Mboe | |
Open Dec 31, 2021 |
780 |
865 |
1644 |
625 |
407 |
1,032 |
138 |
91 |
229 |
1,022 |
1,024 |
2,046 |
Discoveries | ||||||||||||
Extensions |
143 |
109 |
252 |
543 |
272 |
815 |
15 |
21 |
37 |
249 |
176 |
426 |
Improved Recovery | ||||||||||||
Technical Revisions |
-211 |
-116 |
-328 |
-319 |
-103 |
-423 |
-56 |
7 |
-48 |
-321 |
-126 |
-447 |
Acquisitions1 |
6,427 |
2,591 |
9,018 |
16,916 |
13,530 |
30,446 |
519 |
380 |
899 |
9,765 |
5,226 |
14,991 |
Dispositions | ||||||||||||
Economic Factors |
12 |
11 |
23 |
25 |
21 |
46 |
3 |
2 |
5 |
19 |
17 |
36 |
Production |
-670 |
-670 |
-1,634 |
-1,634 |
-66 |
-66 |
-1,007 |
-1,007 |
||||
Close Dec 31, 2022 |
6,480 |
3,460 |
9,940 |
16,157 |
14,127 |
30,283 |
554 |
503 |
1,057 |
9,727 |
6,317 |
16,044 |
Notes
- Reserves from Acquisition may differ from previous disclosure due to well underperformance or outperformance
- The inflation rate is 0% in 2023, 2.3% per year in 2024 and 2% per year starting in 2025
- Estimated future undiscounted development costs, in dollars, at December 31, 2022 were CAD $85.2 million for proved reserves and CAD $124.7 million for proved plus probable reserves
- Report includes well & facility abandonment and reclamation costs of CAD $75.8 million (with inflation) for the proved plus probable case.
- The net present values disclosed may not represent fair market value.
- Totals may not add exactly due to rounding.
- Operating netback calculated by taking all revenue, less royalties and operating costs. Hedge gains/losses are not included.
- Development and Exploration capex in 2022 was $27.3 million. Total acquisition cost associated with the 2022 Federated Coop transaction, net of purchase price adjustments, was $57.9 million.
- Net Asset Value (“NAV”) includes NPV10 of 1P and 2P reserves, respectively, less net debt balance of $35.4 million as of December 31, 2022, divided by 211,580,484 outstanding common shares.
2023 Acquired Reserves
Subsequent to December 31, 2022, ROK closed an acquisition of strategic Southeast Saskatchewan assets in the Company’s core operating area, as disclosed in the news release dated January 24, 2023. The associated reserves, as prepared by McDaniel effective September 1, 2022, are not included in the 2022 year-end reserves, but are shown below for reference purposes only. Please note, these reserves are subject to change in the Company’s proforma reserves update, expected to be completed in Q2 2023. Also note, these reserves do not include the non-core divesture that ROK completed in conjunction with the acquisition.
- PDP Reserves / NPV 10%: 2.3 MBoe / $36 million
- Total Proved Reserves / NPV 10%: 7.1 MBoe / $96 million
- Total Proved + Probable Reserves / NPV 10%: 10.4 MBoe / $155 million
About ROK
ROK is primarily engaged in exploring for petroleum and natural gas development activities in Southeast Saskatchewan and the Kaybob South area of Alberta. It has offices located in both Regina, Saskatchewan, Canada and Calgary, Alberta, Canada. ROK’s common shares are traded on the TSX Venture Exchange under the trading symbol “ROK”.