WINNIPEG, MB / ACCESSWIRE / November 26, 2018 / Bird River Resources Inc. (CSE: BDR) (the “Bird River” or the “Compan””) announces the results of its independent reserves evaluation (the “Chapman Report”) dated November 15, 2018 and effective July 31, 2018, as prepared by Chapman Petroleum Engineering Ltd. (“Chapman”).
Bird River is pleased to announce the Company’s year-end 2018 net asset value (“NAV”) per share is $0.36 per share.
The Company also reported that its 2018 capital expenditure program resulted in total evaluated net reserves on a total proved plus probable basis, of 1.3 million barrels of oil equivalent (“boe”)- with 81 percent being oil.
With the acquisition of High Point Oil Inc. (“High Point”) the Company has acquired significant high working interest properties in Alberta. These were further enhanced by High Point’s early summer drilling in 2018. In this press release, no comparison’s to prior period reserves or production has been provided as they are largely meaningless. Bird River’s previously owned Manitoba resource properties were not included in the above reserve report as they are not significant to the Company’s future activities producing only 1 bbl of oil per day.
2018 RESERVES HIGHLIGHTS
The company’s focused operating strategy of targeting light oil conventional reservoirs provided excellent results, as demonstrated by the following:
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Note – 2018 NAV and 2P reserves value are based on pricing assumptions at July 31, 2018. These assumptions are materially higher than current pricing for “AB Synthetic and Light Sweet – Edmonton”.
2018 INDEPENDENT RESERVES EVALUATION
The evaluation of our reserves was done in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserves information as required under NI 51-101 will be filed on SEDAR on or before November 30, 2018.
Independent reserve evaluators, Chapman, evaluated 100 percent of Bird River’s Alberta reserves. They did not evaluate the Company’s Manitoba reserves which have an insignificant value by comparison and produce approximately 1 boe/d net to the Company.
RESERVES SUMMARY
The following tables summarize Bird River’s working interest oil and natural gas reserves and the net present values (“NPV”) of future net revenue for these reserves (before taxes) using forecast prices and costs as set forth in the Chapman Report.
NET ASSET VALUE
The Company’s NAV, as of July 31, 2018, has been evaluated to be $0.36 per basic share – utilizing Chapman’s July 31, 2018 independent reserves valuation and price forecast.
Bird River’s July 31, 2018 detailed NAV calculation is set forth below:
NAV | ||
Proved Plus Probable Reserve Value NPV10 BT (incl. FDC) |
$M |
40,774 |
Undeveloped Land and Seismic (internally estimated) |
$M |
750 |
Estimated Net Working Capital (unaudited) |
$M |
652 |
Total Net Assets |
$M |
42,176 |
Basic Shares Outstanding (000’s) |
116,000 |
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Estimated NAV per Basic Share | $/share |
0.36 |
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SUMMARY OF SELECTED CHAPMAN PRICE FORECASTS AS AT July 31, 2018
Note – 2018 NAV and 2P reserves value are based on pricing assumptions at July 31, 2018. These assumptions are materially higher than current pricing for “AB Synthetic and Light Sweet – Edmonton”.
FUTURE DEVELOPMENT COSTS (“FDC”)
Future development cost estimates reflect Chapman’s best estimate of the costs required to bring the total proved and proved plus probable reserves on production. The Company has 1.2 million boe of total proved and probable undeveloped and non-producing reserves with an estimated $5.9 million of FDC. These future reserves generate $36 million of net present value discounted at 10 percent, before income tax.
The Company estimates 2019 internally funded corporate capital expenditures at $3.0 million (unaudited) with additional spending potential dependent on financing and commodities pricing.
The following table sets forth the schedule of FDC required to develop Bird River’s future undeveloped reserves (using forecast prices and costs).
Future Development Costs (by calendar year) |
Total Proved |
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($M) |
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2018 (balance of calendar year) |
500 |
||
2019 |
3,417 |
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2020 |
936 |
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2021 |
1,035 |
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Remaining |
0 |
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Total (Undiscounted) |
5,888 |
FINDING, DEVELOPMENT AND ACQUISITION COSTS
Finding, Development and Acquisition Costs (“FD&A”) costs are calculated as the sum of development capital of $3.9 million plus acquisition capital of $5.5 million (the value attributed to the shares issued on the acquisition of High Point at $0.10/share) less the value attributed by management to undeveloped land and seismic of $0.8 million plus the undiscounted FDC of $5.8 million (P+P), for a total of $14.1 million, divided by the change in total reserves, (all the evaluated reserves), 1.3 million boe. This results in FD&A costs of $10.85 per boe for the period.
OUTLOOK – CONTINUED CORE AREA DEVELOPMENT
Management’s stated goal at Bird River is to continue the development of its existing core area in Central Alberta and at the same time to seek additional core areas so as to broaden future opportunities. The Company will continue to focus on light oil.