CALGARY,
AB, Dec. 5, 2022 /CNW/ - Horizon Petroleum
Ltd. (the "Company" or "Horizon") (TSXV: HPL.H) is pleased to
report the results of a recent independent reserve and resource
evaluation ("Reserves Report") on the Lachowice conventional
natural gas field in the Bielsko-Biala concession in southern
Poland. The Reserves Report has an effective date as of
October 01, 2022 and was prepared in
compliance with the standards set out in National Instrument 51-101
of the Canadian Securities Administrators and the Canadian Oil and
Gas Evaluation Handbook (COGEH).
Highlights
- Gross Probable Undeveloped Reserves (2P) of 34.4 Bcf gas and
262MBbls of condensate (total of 6.0 MMBoe) valued at US$458million (NPV10 BTAX)
- Gross Risked Best Estimate Contingent Resources (2C) of 152 Bcf
of gas and 1.15MMBbls of condensate (total of 26.3 MMBoe) valued at
US$1,846 million (NPV10 BTAX),
- Risked Best Estimate Prospective Resources of 118 Bcf of gas
and 869 MBbls (total of 20.5 MMBoe)
- Phased development plan, consisting of one existing well
re-entry tied into a CNG (compressed natural gas facility) in 2024
resulting in sales of 1.5mmscf/d by Q2 2024. Two new wells will be
drilled in 2025 and a new gas processing facility built with
capacity of 30MMcfe/d and a projected on-stream date of Q1 2026.
Multiple horizontal or highly deviated wells will be drilled
commencing in 2026 to fill the plant to capacity by 2027.
Discussion of Reserves and
Resources
Horizon holds the rights to a 100% interest in two conventional
oil & natural gas concessions in Poland known as Bielsko-Biala and Cieszyn
through two wholly owned Polish subsidiary companies which the
Company acquired from San Leon Energy. The full details of the
acquisition are described in our Annual Financial Statements and
Management Discussion and Analysis. The Company has also
re-engaged with the Polish Ministry of the Environment to complete
the Transformation Process as described in the Annual Financial
Statements and Management Discussion and Analysis. In summary
a transformation of the concessions to the new Polish
concession laws ("Transformation Process") is required by the
Polish government as a result of the implementation of amendments
to Poland's geological and mining
laws. An application for the Transformation Process was submitted
to the Polish government in December of 2016 for the Primary
Concessions, however, it is not yet complete. The licenses for the
Primary Concessions expired in April and August of 2018, however,
as the Transformation Process for the Primary Concessions had
already commenced they are effectively in suspension pending a
decision by the Polish government on the Transformation Process.
The timing of completing the Transformation Process has been
severely impacted by travel and work restrictions imposed to combat
the Covid-19 pandemic, as well as by the Company's lack of
financial resources. Completing the Transformation Process will
involve negotiations with the Polish Government to finalise: (i)
the work programs to be conducted, and (ii) the value of the
concession fees and guarantees that will be paid to the Polish
government.
APEX Global Engineering Inc. ("APEX") prepared the Reserves
Report with an effective date of October
01, 2022. APEX assigned the Probable Reserves and
Contingent and Prospective Resources to the Lachowice field, which
at 10,561 acres represents approximately 4% of the total lands to
be held under the concessions (see Table 1 below). The reserves and
resources assigned are subject to significant risks. Please refer
to the Risks section at the end of this press release.
Table 1: Concession Acreage
Concessions
|
Acreage
|
km2
|
Acres
|
Bielsko-Biala
|
805
|
198,821
|
-
Lachowice field
|
43
|
10,561
|
Cieszyn
|
326
|
80,507
|
Total Surface
Area
|
1,131
|
279,328
|
Tables 2, 3 and 4 below summarize APEX's estimates of Horizon's
conventional natural gas reserves and resources, subject to
completion of the Transformation Process. The volumes shown
are attributable to Horizon's 100% working interest, before
deduction of any associated royalty burdens. The economic
values presented are shown after deduction of the associated
royalty burdens, the NPI, operating and capital expenses, but
before any attributable income taxes. Table 5 summarizes the
commodity pricing used in the economic evaluations.
Table 2: Probable Reserves in Lachowice Field
Probable
Reserves
|
PIIP3
|
Recoverable
Sales
|
Before Income Taxes
(US$MM), Discounted at
|
0 %
|
5 %
|
10 %
|
15 %
|
20 %
|
Conventional Natural
Gas (Bcf)
|
49
|
34.4
|
|
|
|
|
|
Condensate
(MBbl)
|
344
|
261.7
|
|
|
|
|
|
Total
Bcfe
|
51.2
|
36.0
|
$1,251
|
$719
|
$458
|
$316
|
$230
|
Total
MMBoe
|
8.5
|
6.0
|
|
|
|
|
|
Note 1: There is no
certainty that it will be commercially viable to produce any
portion of the reserves.
|
Table 3: Contingent Resources – Development Unclarified in
Lachowice Field
Contingent Resources
-
Development Unclarified
|
Discovered
PIIP3
|
Unrisked
Contingent
Resources - Dev. Unclarified
|
Chance
of Dev.
|
Risked
Contingent
Resource (2C) -
Dev. Unclarified
|
Before Income Taxes
(US$MM), Discounted at
|
|
|
|
|
|
1C
|
2C
|
3C
|
1C
|
2C
|
3C
|
( %)
|
0 %
|
5 %
|
10 %
|
15 %
|
20 %
|
Conventional Natural
Gas (Bcf)
|
309
|
422
|
583
|
169
|
238
|
339
|
68.6 %
|
151.8
|
|
|
|
|
|
Condensate
(MBbl)
|
2,276
|
3,110
|
4,298
|
1,248
|
1,756
|
2,499
|
68.6 %
|
1,154.8
|
|
|
|
|
|
Total
Bcfe
|
323
|
441
|
609
|
177
|
249
|
354
|
68.6 %
|
158.7
|
$5,435
|
$3,015
|
$1,846
|
$1,216
|
$845
|
Total
MMBoe
|
53.8
|
73.5
|
101.5
|
29.5
|
41.5
|
59.0
|
68.6 %
|
26.5
|
|
|
|
|
|
Note 2: There is no
certainty that it will be commercially viable to produce any
portion of the resources.
|
Table 4: Prospective Resources in Lachowice Field
Prospective
Resources
|
Undiscovered
PIIP3
|
Unrisked
Prospective
Resources
|
Chance of
Dev.
|
Average
Chance
of Disc.
|
Risked
Prospective
Resources - Best
Estimate
|
Low
Estimate
|
Best
Estimate
|
High
Estimate
|
Low
Estimate
|
Best
Estimate
|
High
Estimate
|
( %)
|
( %)
|
Conventional Natural
Gas (Bcf)
|
544
|
778
|
1133
|
329
|
466
|
673
|
68.6 %
|
36.9 %
|
118.0
|
Condensate
(MBbl)
|
4,007
|
5,448
|
7,933
|
2,501
|
3,547
|
5,121
|
68.6 %
|
33.9 %
|
826
|
Total
Bcfe
|
568
|
811
|
1181
|
344
|
487
|
704
|
68.6 %
|
36.8 %
|
123
|
Total
MMBoe
|
94.6
|
135.2
|
196.8
|
57.3
|
81.2
|
117.3
|
68.6 %
|
36.8 %
|
20.5
|
Note 3: There is no
certainty that any portion of these resources will be
discovered. If discovered, there is no certainty that it will
be commercially viable to produce any portion of the
resources.
|
Table 5: Commodity Pricing
Year
|
Commodity Price
Forecast
|
Natural
Gas
|
Condensate
|
(US$/MMBTU)
|
(US$/mcf)
|
(US$/bbl)
|
2022
|
52.38
|
51.38
|
87.00
|
2023
|
63.29
|
62.29
|
92.00
|
2024
|
68.75
|
67.75
|
96.00
|
2025
|
55.65
|
54.65
|
98.00
|
2026
|
51.29
|
50.29
|
96.00
|
2027
|
45.83
|
44.83
|
92.00
|
2028
|
41.47
|
40.47
|
92.00
|
2029
|
39.29
|
38.29
|
90.00
|
2030
|
39.29
|
38.29
|
90.00
|
2031
|
40.07
|
39.07
|
91.80
|
2032
|
+2%
thereafter
|
There is currently
extreme volatility in the European gas markets with prices
fluctuating widely month to month and even day to
day.
|
The prices forecast
in Table 5 is reflective of the actual gas price in Poland on the
effective day of the reserves report (Oct 01, 2022)
|
History and Development
Plan
The Lachowice field is at an early stage of conventional natural
gas development. Lachowice-1, Lachowice-7 and Stryszawa-2K
are the primary wells of interest on the field and, despite being
essentially vertical in their design and utilizing sub-optimal
drilling and completion methods for naturally fractured formations,
tested at rates of up to 5.8 MMcf/d, 8.9 MMcf/d, and 2.5 MMcf/d,
respectively. Each of these wells was drilled and tested,
with reservoir depths of 3,000-4,000 meters targeting a naturally
fractured carbonate reservoir of Middle Devonian age. The
natural gas is sweet, with up to 91% methane and 7 bbls/MMcf of
condensate.
Following receipt of the Reserves Report, Horizon is currently
in the process of finalizing its development plan. In
general, it is currently anticipated that the development plan
would begin with the re-entry of an existing wellbore.
Provided Horizon successfully closes the Acquisition and is
successful with the Transformation Process, it is targeting to
re-enter and test a well in the first half of 2024, with
first production to occur into a temporary compressed natural gas
unit Q2, 2024, with natural gas sales initially facilities
constrained at approximately 1.5 MMcfe/d. If well capability
is higher, incremental production and sales can be realized with
the addition of more temporary facilities and trucking. The
wells will produce natural gas under primary drive via the natural
fractures and the matrix porosity within the reservoir. The
project is considered pre-development and is expected to cost
approximately US$7.5 million to first
production.
Two new wells will be drilled in 2025 and a new gas processing
facility built with capacity of 30MMcfe/d and a projected on stream
date of Q1 2026. Multiple horizontal or highly deviated wells will
be drilled commencing in 2026 to fill the plant to capacity by
2027.
Operating netbacks are expected to be approximately US$55.60 per Mcfe, based on current price
forecast at the time of the reserves report. Timing of the
development is subject to regulatory approvals, and Horizon has
initiated efforts to begin and fast-track the regulatory
process.
About Horizon Petroleum Ltd.
Calgary-based Horizon is
focused on the appraisal and development of conventional oil &
natural gas resources onshore Europe. The Management and Board of Horizon
consist of oil & natural gas professionals with significant
international experience.
Advisories
Oil and Gas Advisories
The reserve and
resource estimates contained in this press release have been
prepared in accordance with NI 51-101, is dated as of October 01, 2022 and prepared by APEX Global
Engineering Inc..
The reserve and resource estimates of natural gas and natural
gas liquids reserves provided in this news release are estimates
only, and there is no guarantee that the estimated reserves and/or
resources will be recovered. Actual reserves and resources
may eventually prove to be greater than, or less than, the
estimates provided herein. It should not be assumed that the
estimates of future net revenues presented herein represent the
fair market value of the reserves and/or resources. There are
numerous uncertainties inherent in estimating quantities of natural
gas and natural gas liquids reserves and/or resources and the
future cash flows attributed to such reserves and/or
resources.
These risks and uncertainties include but are not limited to:
(i) the fact that there is no certainty that the zones of interest
will exist to the extent estimated or that the zones will be found
to have natural gas with characteristics that meet or exceed the
minimum criteria in terms of net pay thickness and/or porosity, or
that the natural gas will be commercially recoverable to the extent
estimated; (ii) the fact that there is no certainty that any
portion of the probable reserves and contingent and prospective
resources will be commercially viable to produce; (iii) the fact
that the Company must hire an operations team and executive team in
both Calgary and Poland in order to execute on the development
plan, and there are no guarantees that suitably qualified technical
and professional staff and/or consultants will be available; (iv)
the lack of additional financing to fund the Company's development
activities and continued operations; (v) the risks associated with
obtaining approvals to access land to drill wells or install
infrastructure and facilities in a reasonable time frame; the
Polish regulatory regime is relatively stable but is marked with
long approval processes relative to North American jurisdictions;
(vi) the risks in acquiring or constructing adequate natural gas
infrastructure to produce and sell natural gas, and whether
capacity will be available in the existing main pipeline system at
reasonable costs; (vii) the risk that there may not be a drilling
rig available to drill the required wells, and the risk that if a
rig mobilization is required from outside of Poland, that the costs may be prohibitive;
(ix) risks inherent in the international oil and natural gas
industry; * fluctuations in foreign exchange and interest rates;
(xi)the number of competitors in the oil and gas industry with
greater technical, financial and operations resources and staff;
(xii) fluctuations in world prices and markets for oil and natural
gas due to domestic, international, political, social, economic and
environmental factors beyond the Company's control; (xiii)
changes in government regulations affecting oil and natural gas
operations; (xiv) potential liabilities for pollution or hazards
against which the Company cannot adequately insure or which the
Company may elect not to insure; (xv) contingencies affecting the
classification as reserves versus resources which relate to the
following issues as detailed in the COGE Handbook: ownership
considerations, drilling requirements, testing requirements,
regulatory considerations, infrastructure and market
considerations, timing of production and development, and economic
requirements; (xvi) the fact that there is no certainty that any
portion of the prospective resources will be discovered and if
discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources; and (xvii) other
factors beyond the Company's control.
Any reference in this press release to PIIP, contingent
resources and prospective resources are not, and should not be
confused with oil and natural gas reserves.
Definitions
Total Petroleum Initially in Place ("PIIP") refers to
the total quantity of petroleum that is estimated to exist
originally in naturally occurring accumulations. It includes the
petroleum that exists in known accumulations prior to production
and the estimated quantities yet to be discovered in the various
leads and prospects identified by seismic and inferred by geology.
A portion of the PIIP will be recoverable as determined by ultimate
recovery factors and the estimated recoverable portion is further
classified as Reserves, Contingent Resources or Prospective
Resources.
Discovered Petroleum Initially in Place ("Discovered
PIIP" or "DPIIP") is the total quantity of Petroleum
that is estimated as of the effective date of the Report to be
contained in known accumulations prior to production.
Multiple development projects may be applied to each known
accumulation which may be separated vertically into different
formations or by area in different pools; each project will recover
a portion of the PIIP according to its unique reservoir
characteristics. The projects will be subdivided into Commercial
and Sub-Commercial at the effective date with the estimated
recoverable petroleum quantities being classified as Reserves
and Contingent Resources.
Reserves are estimated remaining
quantities of oil and natural gas and related substances
anticipated to be commercially recoverable from known
accumulations, from a given date forward, based on:
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(a)
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analysis of drilling,
geological, geophysical and engineering data;
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(b)
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the use of established
technology; and
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(c)
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specified economic
conditions (see the discussion of "Economic Assumptions"
below).
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Reserves are
classified according to the degree of certainty associated with the
estimates.
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(d)
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Proved
Reserves are those reserves that can be estimated with a
high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves.
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(e)
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Probable
Reserves are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves.
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(f)
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Possible
Reserves are those additional reserves that are less certain to
be recovered than probable reserves. It is unlikely that the actual
remaining quantities recovered will exceed the sum of the estimated
proved + probable + possible reserves
|
Company Gross Reserves are the Company's
working interest (operating or non-operating) share before
deducting royalties and without including any royalty interests of
the Company.
Resources are defined in the Canadian Oil
and Gas Evaluation Handbook (COGEH) Volume 1, section 5 as
follows:
Contingent Resources are those quantities
of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations, but the applied projects are
not yet considered mature enough for commercial development due to
one or more contingencies. Contingent Resources may include, for
example, projects for which there are currently no viable markets,
or where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality.
Contingencies may include factors such as economic, legal,
environmental, political, and regulatory matters, or a lack of
markets. It is also appropriate to classify as contingent
resources, the estimated discovered recoverable quantities
associated with a project in the early evaluation stage. Contingent
Resources are further classified in accordance with the level of
certainty associated with the estimates and may be sub classified
based on project maturity and/or characterized by their economic
status.
Not all technically feasible development plans will be
commercial. The commercial viability of a development project is
dependent on the forecast of fiscal conditions over the life of the
project. For Contingent Resources, the risk component relating to
the likelihood that an accumulation will be commercially developed
is referred to as the "chance of development." For contingent
resources, the chance of commerciality is equal to the chance of
development.
Development Pending are
contingencies that are being actively pursued; expect resolution in
a reasonable time period; are directly influenced by the developer
with both, internal approvals and commitment and development timing
and; have a high chance of development (>80%).
Development on Hold are
contingencies with major non-technical contingencies identified;
have a reasonable chance of development (>50%); have
contingencies that are beyond the control of the developer
including but not limited to: external approvals, economic factors,
market access, political factors and social license.
Development
Unclarified are contingencies that have not been
clearly defined; the project is currently under active evaluation;
significant further appraisal may be required; progress is expected
in a reasonable time period; chance of development is difficult to
assess and could be a big range (20%-80%).
Development Not Viable are
contingencies that have been identified; the project was evaluated
and considered not viable or significant further appraisal may be
required; progress is not expected in a reasonable time period and;
has a low chance of development (<<50%).
Contingent Resources –Development Pending and
–Development On Hold are considered economic, Contingent Resources
–Development Unclarified have economics that are undetermined, and
Contingent Resources –Development Not Viable are considered
sub-economic.
Prospective Resources are those quantities
of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of
future development projects. Prospective resources have both an
associated chance of discovery and a chance of development.
Prospective Resources are further subdivided in accordance with the
level of certainty associated with recoverable estimates assuming
their discovery and development and may be sub classified based on
project maturity.
Not all exploration projects will result in discoveries. The
chance that an exploration project will result in the discovery of
petroleum is referred to as the "chance of discovery." Thus, for an
undiscovered accumulation, the chance of commerciality is the
product of two risk components — the chance of discovery and the
chance of development.
Estimates of resources always involve uncertainty, and the
degree of uncertainty can vary widely between
accumulations/projects and over the life of a project.
Consequently, estimates of resources should generally be quoted as
a range according to the level of confidence associated with the
estimates. An understanding of statistical concepts and terminology
is essential to understanding the confidence associated with
resources definitions and categories. These concepts, which apply
to all categories of resources, are outlined below. The range of
uncertainty of estimated recoverable volumes may be represented by
either deterministic scenarios or by a probability distribution.
Resources should be provided as low, best, and high estimates as
follows:
- Low Estimate and/or 1C in the case of Contingent
Resources: This is considered to be a conservative
estimate of the quantity that will actually be recovered. It is
likely that the actual remaining quantities recovered will exceed
the low estimate. If probabilistic methods are used, there should
be at least a 90 percent probability (P90) that the quantities
actually recovered will equal or exceed the low estimate.
- Best Estimate and/or 2C in the case of Contingent
Resources: This is considered to be the best estimate of
the quantity that will actually be recovered. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the best estimate. If probabilistic methods are used,
there should be at least a 50 percent probability (P50) that the
quantities actually recovered will equal or exceed the best
estimate.
- High Estimate and/or 3C in the case of Contingent
Resources: This is considered to be an optimistic
estimate of the quantity that will actually be recovered. It is
unlikely that the actual remaining quantities recovered will exceed
the high estimate. If probabilistic methods are used, there should
be at least a 10 percent probability (P10) that the quantities
actually recovered will equal or exceed the high estimate.
This approach to describing uncertainty may be applied to
reserves, contingent resources, and prospective resources. There
may be significant risk that sub commercial and undiscovered
accumulations will not achieve commercial production, however, it
is useful to consider and identify the range of potentially
recoverable quantities independently of such risk.
The main contingencies identified in the Lachowice Reserves
Report are the successful recompletion of existing abandoned wells,
the expected decline rates and the approval and completion of new
development and new re-entries. Table 6 below outlines the
positive and negative factors which may be relevant to the Resource
Report assumptions and estimates.
Boe means a barrel of oil equivalent on
the basis of 6 Mcf of natural gas to 1 barrel of oil
equivalent. Mcfe means one thousand cubic feet of natural gas
equivalent on the basis of 6 Mcfe : 1 barrel of oil. A boe
conversion ratio of 6 Mcf : 1 Boe and 6 Mcfe : 1 bbl are
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. Given the value ratio based on
the price of crude compared to the price of natural gas at various
times can be significantly different from the energy equivalence of
6 Mcf : 1 boe or 6 Mcfe : 1 bbl, using Boe's and Mcfe's may be
misleading as an indication of value.
Abbreviations:
|
Bcf
|
billion cubic feet
|
Bcfe
|
billion cubic feet of natural gas
equivalent
|
Bbl
|
barrels
|
Boe
|
barrels of oil equivalent
|
M
|
thousand
|
MM
|
million
|
Mcfe
|
thousand cubic feet of natural gas
equivalent
|
MMcfe/d
|
million cubic feet equivalent per
day
|
Tcf
|
trillion cubic feet
|
BTAX
|
before income tax
|
PV10
|
present value discounted at 10%
|
km2
|
square kilometers
|
Note Regarding Forward Looking Statements.
This press release contains forward-looking statements and
forward-looking information (collectively "forward-looking
information") within the meaning of applicable securities laws
relating to the Company's plans and other aspects of our
anticipated future operations, management focus, strategies,
financial, operating and production results, industry conditions,
commodity prices and business opportunities. In addition, and
without limiting the generality of the foregoing, this press
release contains forward-looking information regarding anticipated
netbacks, the Transformation Process, the closing and timing of the
Transformation Process, the timing of the remaining regulatory
approvals die the Transformation Process, production guidance,
capital program and allocation thereof, future production,
development and drilling plans, well economics, future cost
reductions, potential growth, and the current operating plans with
respect to the Company's right to assets in Poland as well as the source of funding
the Company's capital spending. Forward-looking information
typically uses words such as "anticipate", "believe", "project",
"expect", "goal", "plan", "intend" or similar words suggesting
future outcomes, statements that actions, events or conditions
"may", "would", "could" or "will" be taken or occur in the
future.
The forward-looking information is based on certain key
expectations and assumptions made by Horizon's management,
including expectations and assumptions noted previously in this
press release under oil and gas advisories, and in addition with
respect to prevailing commodity prices which may differ materially
from the price forecasts used by Apex and differentials, exchange
rates, interest rates, applicable royalty rates and tax laws;
future production rates and estimates of operating costs;
performance of future wells; reserve and resource volumes;
anticipated timing and results of capital expenditures; the success
obtained in drilling new wells; the sufficiency of budgeted capital
expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the state of the
economy and the exploration and production business; results of
operations; performance; business prospects and opportunities; the
availability and cost of financing, labour and services; the impact
of increasing competition; the ability to efficiently integrate
assets and employees acquired through acquisitions, the
Transformation Process, the ability to market natural gas
successfully and Horizon's ability to access capital. Although the
Company believes that the expectations and assumptions on which
such forward-looking information is based are reasonable, undue
reliance should not be placed on the forward-looking information
because Horizon can give no assurance that they will prove to be
correct. Since forward-looking information addresses future events
and conditions, by its very nature they involve inherent risks and
uncertainties. Horizon's actual results, performance or achievement
could differ materially from those expressed in, or implied by, the
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits that we will derive therefrom. Management has included the
above summary of assumptions and risks related to forward-looking
information provided in this press release in order to provide
securityholders with a more complete perspective on future
operations and such information may not be appropriate for other
purposes.
Readers are cautioned that the foregoing lists of factors are
not exhaustive. These forward-looking statements are made as of the
date of this press release and we disclaim any intent or obligation
to update publicly any forward-looking information, whether as a
result of new information, future events or results or otherwise,
other than as required by applicable securities laws.
This press release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about Horizon's prospective results of operations,
operating netbacks and components thereof, all of which are subject
to the same assumptions, risk factors, limitations and
qualifications as set forth in the above paragraphs. FOFI contained
in this press release was made as of the date of this press release
and was provided for the purpose of providing further information
about Horizon's anticipated future business operations. Readers are
cautioned that the FOFI contained in this press release should not
be used for purposes other than for which it is disclosed
herein.
Non-GAAP Measures
This press release includes non-GAAP measures as further
described herein. These non-GAAP measures do not have a
standardized meaning prescribed by International Financial
Reporting Standards ("IFRS" or, alternatively, "GAAP") and
therefore may not be comparable with the calculation of similar
measures by other companies.
Operating netbacks are determined by
deducting royalties, net profit interest, production expenses and
selling expenses from oil and gas revenue. Operating netbacks are
per mcfe measures used in operational and capital allocation
decisions.
The assumptions used to generate the netback (US$/Mcfe) in
this press release for the first 12 months of production are as
follows:
Daily
Production(1)
|
1.1
MMcfe/d
|
Commodity Revenue
(2)
|
US$25.7
MM
|
Royalties
NPI
|
US$ 5.56
MM
|
6% NPI and Operating
Cost(1)
|
US$ 4.28
MM
|
Operating
Netbacks
|
US$55.61/Mcfe
|
|
|
(1) Daily production
and operating costs are management's best estimate of the
production and operating costs from the anticipated wells and is
based on all of the assumptions outlined in the above
paragraphs;
|
(2)Based on
Lachowice Natural Gas Price = US$67.71/mcf, Condensate Price =
US$96.00/Bbl.
|
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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content:https://www.prnewswire.com/news-releases/horizon-petroleum-announces-updated-ni51-101-reserves-and-resources-report-for-poland-301695046.html
SOURCE Horizon Petroleum Ltd.