HOUSTON, TX, Sept. 9, 2016 /CNW/ - Hunter Oil Corp.
(TSX-V: HOC; OTCQX: HOILD; CUSIP 44570P201 and ISIN CA44570P2017;
8,070,881 common shares outstanding) (the "Company") is
pleased to announce the results of an independent updated
evaluation of the Company's oil and gas reserves located in the
Permian Basin San Andres formation of the Chaveroo and Milnesand
Fields in New Mexico. Since the
end of year 2015, the Company has added additional acreage and
updated its business model based on other Permian Basin
activity. This results in a development of all of the
Company's larger acreage position rather than a partial development
as foreseen in its annual reserve report for the year ended
December 31, 2015.
The evaluation, prepared as of August 26,
2016 with an effective date of January 1, 2017, was conducted by the Company's
independent reserve evaluator in accordance with the definitions,
standards and procedures set out in the Canadian Oil and Gas
Evaluation Handbook ("COGE") and National Instrument 51-101
– Standards of Disclosure for Oil and Gas Activities ("NI
51-101").
Mid-Year 2016 Gross Reserves Summary
- Total Proved Reserves 14.2 million Barrels of oil (15.3
MMBOE)
- an increase of 102% over the December 31, 2015 reserves estimate
- an increase of 124% over the December 31,
2014 reserves estimate
- Proved plus Probable Reserves 19.95 million Barrels of oil
(21.4 MMBOE)
- an increase of 158% over the December 31, 2015 estimate
- no Probable reserves were reported in December 31, 2014
- Proved plus Probable plus Possible 36.2 million Barrels of
oil (38.9 MMBOE)
-no Possible reserves were reported in December 31, 2015
Net Present Value of Reserves discounted at 10%
- Total Proved Reserves before tax of U.S. $258.1 million
- Proved plus Probable Reserves before tax of U.S.
$424.5 million
- Proved plus Probable plus Possible Reserves before tax of
U.S. $918.3 million
The above total Proved reserves are attributed to the drilling
of 87 horizontal wells over the next 6 years. The Probable reserves
are attributed to incremental volumes of the 87 horizontal wells
and the drilling of 8 additional wells. Possible reserves are
attributed to incremental volumes of the 95 horizontal wells and
the drilling of an additional 11 wells. The wells in the
Company's report (the "Report") are planned at 160-acre
spacing (4 wells per section) on approximately 22,000
acres.
The Report summarizing the results of the evaluation is
available for viewing under the Company's profile at
http://www.sedar.com, or by request to the Company.
The tables set forth below summarize the Company's oil and
natural gas reserves, and the net present values before and after
income tax of future net revenue for the Company's reserves using
forecast prices and costs assumptions.
|
Summary of Oil and
Gas Reserves
|
As of January 1,
2017
|
Forecast Prices
and Costs – U.S. Dollars
|
Reserves
|
|
|
Light and Medium
Oil
|
Natural
Gas
(non-associated
&
associated)
|
|
|
|
Reserve
Category
|
Gross
|
Net
|
Gross
|
Net
|
(Mbbl)
|
(Mbbl)
|
(MMcf)
|
(MMcf)
|
PROVED
|
|
|
|
|
|
|
Developed
Producing
|
61
|
49
|
0
|
0
|
|
|
|
|
|
|
|
Proved
Undeveloped
|
14,169
|
11,351
|
6,284
|
5,050
|
TOTAL
PROVED
|
14,230
|
11,400
|
6,284
|
5,050
|
PROBABLE
|
5,718
|
4,573
|
2,449
|
1,964
|
Total Proved Plus
Probable
|
19,948
|
15,973
|
8,733
|
7,015
|
POSSIBLE
|
16,260
|
13,063
|
7,358
|
5,928
|
Total Proved plus
Probable plus Possible
|
36,208
|
29,036
|
16,090
|
12,942
|
|
|
|
|
|
|
|
|
SUMMARY OF NET
PRESENT VALUE OF FUTURE NET REVENUE
|
As of January 1,
2017
|
FORECAST PRICES
AND COSTS – U.S. Dollars
|
RESERVES
CATEGORY
|
NET PRESENT VALUE
OF FUTURE NET REVENUE
|
BEFORE INCOME
TAXES (BFIT)
DISCOUNTED AT
(%/year)
|
AFTER INCOME TAXES
(AFIT)
DISCOUNTED AT
(%/year)
|
UNIT VALUE
BEFORE
INCOME
TAXES
DISCOUNTED AT
10%/year
|
(MM$)
at
0%
|
(MM$)
at
5%
|
(MM$)
at
10%
|
(MM$)
at
15%
|
(MM$)
at
20%
|
(MM$)
at
0%
|
(MM$)
at
5%
|
(MM$)
at
10%
|
(MM$)
at
15%
|
(MM$)
at
20%
|
($/BOE)
|
PROVED
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
-0.4
|
-
|
0.1
|
0.2
|
0.2
|
-0.5
|
-0.1
|
0.1
|
0.1
|
0.2
|
2.32
|
Undeveloped
|
444.6
|
336.7
|
258
|
199.6
|
155.7
|
291.2
|
224.6
|
174.9
|
137.5
|
108.8
|
21.16
|
TOTAL
PROVED
|
444.3
|
336.7
|
258.1
|
199.8
|
155.9
|
290.7
|
224.5
|
175
|
137.6
|
109
|
21.08
|
PROBABLE
|
264.1
|
207.8
|
166.4
|
135.3
|
111.4
|
199.2
|
161.0
|
132.2
|
109.9
|
92.4
|
33.96
|
TOTAL PROVED
PLUS PROBABLE
|
708.4
|
544.5
|
424.5
|
335.1
|
267.4
|
489.8
|
385.5
|
307.2
|
247.5
|
201.4
|
24.76
|
POSSIBLE
|
798
|
621.4
|
493.8
|
398.9
|
326.6
|
599.4
|
479.8
|
390.9
|
322.9
|
269.8
|
35.15
|
TOTAL PROVED
PLUS PROBABLE
PLUS POSSIBLE
|
1,506.4
|
1,165.9
|
918.3
|
734.0
|
594
|
1,089.2
|
865.4
|
698.1
|
570.4
|
471.2
|
29.44
|
Note: All dollar values are expressed in U.S. dollars (MM$ =
millions of U.S. Dollars).
The Company's reserves are derived from non-conventional
tight-oil activities from which gas and natural gas liquids may be
produced as by-products. "Tight-oil" means crude oil (a) contained
in dense organic-rich rocks, including low-permeability shales,
siltstones and carbonates, in which the crude oil is primarily
contained in microscopic pore spaces that are poorly connected to
one another, and (b) that typically requires the use of hydraulic
fracturing to achieve economic production rates.
The Company is not required to pay income taxes for its most
recently completed financial year. Subject to current
assumptions of production levels, operating and capital expense,
commodity prices and currently available operating loss
carryforwards, the Company may have an income tax liability in the
year 2020. The After Income Tax net present values
reflect the tax burden on the Company's field interests. The
financial statements and the management's discussion and analysis
of the Company should be consulted for information at the level of
the business entity.
Readers are referred to the Company's Statement of Reserves Data
and Other Oil & Gas Information dated August 26, 2016 with an effective date of
January 1, 2017, prepared in
accordance with the definitions, standards and procedures set out
in the COGE Handbook and NI 51-101, which can be accessed
electronically from the SEDAR website at http://www.sedar.com.
BOEs/boes may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based
on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead. Possible reserves are those additional reserves that are
less certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of provided plus probable plus possible reserves.
The present value of estimated future net revenues referred to
herein does not represent fair market value and should not be
construed as the current market value of estimated crude oil and
natural gas reserves attributable to the Company's
properties.
About Hunter Oil Corp.
Hunter Oil Corp. owns and operates two large historic Permian
Basin oil fields in New Mexico,
the Milnesand and Chaveroo oil
fields. Recorded production of these two fields is approximately 37
million barrels, representing less than 10% recovery of the oil in
place. The Company plans to unlock the value in these resource-rich
fields by increasing the efficiency of its operations, and by
applying new and proven unconventional production technologies.
ON BEHALF OF THE BOARD OF DIRECTORS
Andrew Hromyk
President and CEO
+1 (832) 485-8500
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE
Cautionary Statement Regarding Forward-Looking
Information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws, including statements regarding estimates
of reserves and future net revenue, expectations regarding
additional reserves and statements regarding Chaveroo and
Milnesand wells development,
including plans, anticipated results and timing.
Forward-looking information is subject to a variety of risks
and uncertainties and other factors that could cause plans,
estimates and actual results to vary materially from those
projected in such forward-looking information.
Estimated reserves and future net revenue have been
independently evaluated by the Company's independent reserves
evaluator, with an effective date as of January 1, 2017. This evaluation is based on a
limited number of wells with limited production history and
includes a number of assumptions relating to factors such as
availability of capital to fund required infrastructure, commodity
prices, production performance of the wells drilled, successful
drilling of infill wells, the assumed effects of regulation by
government agencies and future capital and operating costs. All of
these estimates will vary from actual results. Estimates of the
recoverable oil and natural gas reserves attributable to any
particular group of properties, classifications of such reserves
based on risk of recovery and estimates of future net revenues
expected therefrom, will vary. The Company's actual production,
revenues, taxes, development and operating expenditures with
respect to its reserves will vary from such estimates, and such
variances could be material. Estimates of after-tax net
present value are dependent on a number of factors including
utilization of tax-loss carry forwards. In addition to the
foregoing, other significant factors or uncertainties that may
affect either the Company's reserves or the future net revenue
associated with such reserves include material changes to existing
taxation or royalty rates and/or regulations and changes to
environmental laws and regulations.
Forward-looking information regarding Chaveroo
and Milnesand well development and
expectations regarding additional reserves
are based on plans and estimates of management and
interpretations of exploration information by the Company's
exploration team at the date the information is provided and is
subject to several factors and assumptions of management, including
that required regulatory approvals will be available when required,
that no unforeseen delays, unexpected geological or other effects,
equipment failures, permitting delays or labor or contract disputes
or shortages are encountered, that the development plans of the
Company will not change, and is subject to a variety of risks
and uncertainties and other factors that could cause plans,
estimates and actual results to vary materially from those
projected in such forward-looking information, including that
anticipated results and estimated costs will not be consistent with
managements' expectations, the Company or its subsidiaries not
being able for any reason to obtain and provide the information
necessary to secure required approvals or that required regulatory
approvals are otherwise not available when required, that
unexpected geological results are encountered and that equipment
failures, permitting delays or labor or contract disputes or
shortages are encountered.
Information on other important economic factors or
significant uncertainties that may affect components of the
reserves data and the other
forward looking statements in this
release are contained in the
Company's Statement of Reserves Data and Other Oil & Gas
Information dated August 26, 2016
with an effective date of January 1,
2017, prepared in accordance with the definitions, standards
and procedures set out in the COGE Handbook and NI 51-101, and the
Company's Management Discussion and Analysis under "Risk Factors",
which are available under the Company's profile at
www.SEDAR.com. The Company undertakes no
obligation to update forward-looking statements, other than as
required by applicable law.
SOURCE Hunter Oil Corp.