TSX Venture Exchange: IKM
CALGARY, March 2, 2016 /CNW/ - Ikkuma Resources Corp.
("Ikkuma" or the "Corporation") is pleased to
announce its 2015 year-end reserves.
2015 Highlights
- Ikkuma achieved relatively flat PDP reserves at 14.4 MMBoe,
increased 1P reserves to 20.0 MMboe and increased 2P reserves 7% to
27.5 MMboe, even with reducing its 2015 capital spending by 25% in
response to weakening commodity prices.
- Achieved 1P F&D of $8.95/boe
and 2P F&D of $7.27/boe despite
operational issues with the drilling program in the first quarter
which consumed approximately 39% of total 2015 capital
expenditures. All new reserves were attributed to the successful
recompletion program. New recompletion operations will continue
through 2016, as disclosed previously.
- Ikkuma divested 500 Mboe of 1P reserves and 745 Mboe of 2P
reserves during the year for an aggregate of $3.3 million. As a result, the Corporation's 1P
and 2P FD&A (including changes in FDC, revisions and economic
factors) was $9.22/boe and
$7.76/boe, respectively.
- Ikkuma's recompletion program accounted for $21.4 million or 61% of total exploration and
development expenditures and resulted in adding 1,555 Mboe of PDP
reserves and 2,274 Mboe of 2P reserves. Capex included a 12 km
pipeline build, which will be used for up to six offset gas wells.
A single offset PUD booked on one of the recompletions has been
assigned 1,546 Mboe of 2P reserves.
- Total proved plus probable reserves value was relatively
unchanged at $202 million (discounted
at 10%) as compared to the $208
million reported last year, despite the 25-30% reduction in
forecasted price decks.
- Ikkuma's 2P net asset value at December
31, 2015 is estimated at $2.31/share, 282% above last 30 day average
trading price.
Reserves
The detailed reserves data set forth
below are based on an independent reserves assessment and
evaluation prepared by Sproule Associated Limited ("Sproule") with
an effective date of December 31,
2015, the "Sproule Report". The following presentation
summarizes the Corporation's crude oil, natural gas liquids and
natural gas reserves and the net present values before income tax
of future net revenue for the Corporation's reserves using forecast
prices and costs as set out in the Sproule Report. The Sproule
Report has been prepared in accordance with 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"). The reserves evaluation was based on the consensus
forecast escalated pricing and foreign exchange rates at
December 31, 2015 ("Consensus Price")
as outlined in the table herein entitled "Price Forecast". This
Consensus Price forecast is the average of the escalated price
forecasts of three independent reserve evaluators, namely Sproule,
GLJ Petroleum Consultants Ltd. and McDaniels & Associates
Consultants Ltd.
All evaluations and summaries of future net revenue are stated
prior to provision for interest, debt service charges or general
administrative expenses and after deduction of royalties, operating
costs, estimated well abandonment and reclamation costs and
estimated future capital expenditures. It should not be assumed
that the estimates of future net revenues presented in the tables
below represent the fair market value of reserves. There is no
assurance that the forecast prices and cost assumptions will be
attained and variances could be material. The recovery and reserve
estimates of Ikkuma's crude oil, natural gas liquids and natural
gas reserves provided herein are estimates only and there is no
guarantee that the estimated reserves will be recovered. Actual
crude oil, natural gas and natural gas liquids reserves may be
greater or less than the estimates provided herein. Reserves
included herein are stated on a company gross basis (working
interest before deduction of royalties without including any
royalty interests) unless noted otherwise. In addition to the
detailed information disclosed in this press release, more detailed
information will be included in the Corporation's Annual
Information Form ("AIF") which will be filed on the Corporation's
profile at www.sedar.com on or before April
30, 2016.
See "Forward Looking Information and Statements and Cautionary
Statements" for a statement of principal assumptions and risks that
may apply.
The preparation and audit of Ikkuma's 2015 annual financial
statements is not yet complete, and accordingly all financial
amounts referred to in this press release are unaudited and
represent management's estimates. Readers are advised that these
financial estimates may be subject to change.
Corporate Reserves (1,2,5)
|
|
|
|
|
Reserves
Category
|
Light
and
Medium Crude
Oil
(Mbbl)
|
Natural Gas
Liquids
(Mbbl)
|
Non-
Associated
Gas(3)
(Mmcf)
|
Barrels of
Equivalent(4)
(Mbbl)
|
Proved
|
|
|
|
|
Producing
("PDP")
|
1.0
|
432.2
|
83,962
|
14,426.8
|
|
|
|
|
|
Non-producing
|
-
|
6.6
|
8,043
|
1,347.1
|
|
|
|
|
|
Undeveloped
|
-
|
7.2
|
25,493
|
4,256.0
|
|
|
|
|
|
Total proved
(1P)
|
1.0
|
446.0
|
117,498
|
20,030.0
|
|
|
|
|
|
Probable
|
0.5
|
71.6
|
44,635
|
7,511.3
|
Total proved plus
probable (2P)
|
1.5
|
517.6
|
162,133
|
27,541.3
|
Notes:
|
|
(1)
|
Reserves have been
presented on a "gross" basis which is defined as Ikkuma's working
interest (operating and non-operating) share before deduction of
royalties and without including any royalty interest of the
Corporation.
|
(2)
|
Based on Sproule's
December 31, 2015 Consensus Price forecast.
|
(3)
|
Includes solution
gas.
|
(4)
|
Oil equivalent
amounts have been calculated using a conversion rate of six
thousand cubic feet of natural gas to one barrel of oil.
|
(5)
|
Columns may not add
due to rounding.
|
Reserve Values (1,2,3)
The estimated before tax net present value ("NPV") of
future net revenue associated with Ikkuma's reserves effective
December 31, 2015 and based on the
Sproule Report and the Consensus Price forecast are summarized in
the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0%
|
5%
|
10%
|
15%
|
20%
|
Reserves
Category
|
(M$)
|
(M$)
|
(M$)
|
(M$)
|
(M$)
|
|
|
|
|
|
|
Proved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
185,267
|
142,852
|
116,426
|
98,579
|
85.791
|
|
|
|
|
|
|
|
|
Developed
Non-Producing
|
16,467
|
12,734
|
10,110
|
8,231
|
6,847
|
|
|
|
|
|
|
|
|
Undeveloped
|
41,452
|
28,225
|
19,554
|
13,698
|
9,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Proved
|
243,187
|
183,811
|
146,090
|
120,508
|
102,257
|
|
|
|
|
|
|
|
Probable
|
127,122
|
80,272
|
56,315
|
42,326
|
33,370
|
|
|
|
|
|
|
|
Total proved plus
probable
|
370,309
|
264,083
|
202,406
|
162,834
|
135,627
|
|
|
|
|
|
|
Notes:
|
|
|
(1)
|
|
The estimated future
net revenues are stated prior to provision for interest, debt
service charges or general and administrative expenses and after
deduction of royalties, operating costs, estimated well abandonment
and reclamation costs and estimated future capital
expenditures.
|
(2)
|
|
See the Corporation's
AIF, once filed, for the after-tax present values of future net
revenue attributed to Ikkuma's reserves.
|
(3)
|
|
Columns may not add
due to rounding.
|
Price Forecast (1)
|
|
|
|
|
|
|
|
Year
|
Canadian
Light
Sweet
Crude(1)
40°
API
($C/Bbl)
|
Western
Canada
Select
20.5°
API
($C/Bbl)
|
Alberta
AECO-C
($C/MMbtu)
|
Edmonton
Propane
($C/Bbl)
|
Edmonton
Butane
($C/Bbl)
|
Edmonton
Pentanes
Plus
($C/Bbl)
|
$US/$C
Exchange
Rate
|
|
|
|
|
|
|
|
|
2016
|
55.89
|
44.64
|
2.57
|
9.76
|
38.73
|
60.16
|
0.74
|
2017
|
66.47
|
54.52
|
3.14
|
15.88
|
46.91
|
70.95
|
0.77
|
2018
|
73.21
|
60.32
|
3.47
|
24.09
|
52.58
|
78.05
|
0.80
|
2019
|
81.35
|
67.42
|
3.80
|
30.49
|
59.42
|
86.58
|
0.82
|
2020
|
84.57
|
70.47
|
3.99
|
33.69
|
62.81
|
90.00
|
0.83
|
2021
|
87.88
|
73.50
|
4.13
|
34.95
|
65.25
|
93.46
|
0.84
|
2022
|
92.01
|
77.25
|
4.30
|
36.45
|
68.33
|
97.79
|
0.84
|
2023
|
96.24
|
80.95
|
4.48
|
38.06
|
71.46
|
102.23
|
0.84
|
2024
|
98.17
|
83.09
|
4.60
|
38.79
|
72.90
|
104.29
|
0.84
|
2025
|
99.94
|
84.56
|
4.70
|
39.50
|
74.22
|
106.16
|
0.84
|
2026
|
101.79
|
86.16
|
4.79
|
40.23
|
75.58
|
108.12
|
0.84
|
2027+ prices
escalate at 1.5% thereafter
|
Note:
|
|
|
(1)
|
|
This Consensus Price
forecast is an average of three independent reserve evaluators'
forecasts at December 31, 2015 including Sproule, GLJ and
McDaniels.
|
Reserves Reconciliation (2)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
PROVED
|
Light and
Medium Crude
Oil (Mbbl)
|
Heavy Crude
Oil
(Mbbl)
|
Natural Gas
Liquids
(Mbbl)
|
Associated and
Non-Associated Gas
(Mmcf)
|
Oil Equivalent
(Mboe)
|
|
|
|
|
|
|
December 31,
2014
|
8.2
|
57.9
|
639.8
|
104,747
|
18,163.7
|
Product type
transfer
|
0.9
|
(0.9)
|
-
|
-
|
-
|
Extensions &
Improved Recovery
|
-
|
-
|
-
|
7,806
|
1,301
|
Infill
Drilling
|
-
|
-
|
-
|
9,667
|
1,611.2
|
Technical
Revisions
|
0.3
|
11.3
|
(57.7)
|
15,132
|
2,475.9
|
Acquisitions
|
-
|
-
|
-
|
-
|
-
|
Dispositions(1)
|
(7.5)
|
(57.0)
|
(86.7)
|
(2,093)
|
(500)
|
Economic
factors
|
(0.9)
|
-
|
-
|
(2,961)
|
(494.4)
|
Production
|
-
|
(11.3)
|
(49.3)
|
(14,801)
|
(2,527.5)
|
December 31,
2015
|
1.0
|
0.0
|
446.1
|
117,498
|
20,030.1
|
|
|
|
|
|
|
TOTAL PROVED PLUS
PROBABLE
|
Light and
Medium Crude
Oil (Mbbl)
|
Heavy Crude
Oil
(Mbbl)
|
Natural Gas
Liquids
(Mbbl)
|
Associated and
Non-Associated Gas
(Mmcf)
|
Oil Equivalent
(Mboe)
|
|
|
|
|
|
|
December 31,
2014
|
56.2
|
123.0
|
749.6
|
149,537
|
25,851.6
|
Product type
transfer
|
1.2
|
(1.2)
|
-
|
-
|
-
|
Extensions &
Improved Recovery
|
-
|
-
|
-
|
10,167
|
1,694.5
|
Infill
Drilling
|
-
|
-
|
-
|
15,338
|
2,556.3
|
Technical
Revisions
|
-
|
11.3
|
(70.8)
|
8,394
|
1,339.5
|
Acquisitions
|
-
|
-
|
-
|
-
|
-
|
Dispositions(1)
|
(55.0)
|
(121.8)
|
(111.9)
|
(2,738)
|
(745.0)
|
Economic
factors
|
(0.9)
|
-
|
-
|
(3,764)
|
(628.2)
|
Production
|
-
|
(11.3)
|
(49.3)
|
(14,801)
|
(2,527.5)
|
December 31,
2015
|
1.5
|
0.0
|
517.6
|
162,133
|
27,541.3
|
Notes:
|
|
(1)
|
Dispositions include
the sale of Ikkuma's non-core Deanne property and the sale of the
legacy central Alberta properties.
|
(2)
|
Columns may not add
due to rounding.
|
Finding and Development Costs
|
|
|
|
|
|
|
PDP
|
1P
|
2P
|
Expenditures
(1)($000's)
|
|
|
|
|
Exploration and
Development Expenditures
|
35,300
|
35,300
|
35,300
|
|
Acquisitions
(Dispositions)
|
(3,329)
|
(3,329)
|
(3,329)
|
|
|
31,971
|
31,971
|
31,971
|
Change in future
development capital
("FDC")(1) ($000's)
|
-
|
-
|
-
|
|
Exploration and
Development
|
5
|
8,520
|
754
|
|
Acquisitions
(Dispositions)
|
-
|
-
|
-
|
|
|
5
|
8,520
|
754
|
Reserve additions
with revisions and economic factors (mboe)
|
|
|
|
|
Exploration and
Development
|
2,584.1
|
4,893.7
|
4,962.1
|
|
Acquisitions
(Dispositions)
|
(500)
|
(500)
|
(745)
|
|
|
2,084.1
|
4,393.9
|
4,217.2
|
Finding &
Development Costs( "F&D")(2) ($ per
boe)
|
|
|
|
|
with revisions and
economic factors
|
13.66
|
8.95
|
7.27
|
Finding, Development
& Acquisition Costs ("FD&A")($ per boe)
|
|
|
|
|
with revisions and
economic factors
|
15.34
|
9.22
|
7.76
|
Notes:
|
|
(1)
|
The aggregate of the
exploration and development costs incurred in the most recent
financial year and the change during that year in estimated future
development capital generally will not reflect total finding and
development costs related to reserve additions for that
year.
|
(2)
|
The calculation of
F&D and FD&A costs incorporate the change in FDC required
to bring proved undeveloped and developed reserves into production.
In all cases, the F&D or DD&A number is calculated by
dividing the identified capital expenditures by the applicable
reserves additions after changes in FDC costs.
|
Net Asset Value
Ikkuma's net asset value per share at December 31, 2015 was $2.31 (P&NG reserves discounted at 10% BT)
and $2.19 on a fully diluted basis,
as set out in the following table:
NET ASSET VALUE
PER
SHARE
|
|
10% NPV of 2P
P&NG reserves, before tax ($000's)
|
$ 202,406
|
Undeveloped land
(1) ($000's)
|
15,337
|
2015 YE Estimated Net
Debt (Unaudited) ($000's)
|
(32,890)
|
Net asset value
($000's)
|
$ 184,853
|
Undiluted
common shares outstanding (000's)
|
80,159
|
Diluted common shares
outstanding (000's)
|
84,336
|
Net asset value per
share - undiluted
|
$
2.31
|
Net asset value per
share -fully diluted
|
$
2.19
|
Note:
|
(1)
|
Estimated at
$110/acre.
|
About Ikkuma Resources Corp.
Ikkuma Resources Corp. is a diversified junior public oil and
gas company listed on the TSX Venture Exchange under the symbol
"IKM", with holdings in both conventional and unconventional
projects in Western Canada. The technical team has worked
together for over a decade in the Foothills Region of Western Canada, through two successful,
publicly traded companies. The unique skills and repeat
success at exploiting a complex, potentially prolific play type are
fundamental ingredients for a successful growth-oriented company in
Western Canada. Corporate information can be found at:
www.ikkumarescorp.com.
Forward-Looking Statements and Information and Cautionary
Statements
This press release contains forward‑looking statements and
forward‑looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward‑looking
statements or information. In particular the press release
contains forward-looking statements and information relating to the
continuation of recompletion operations in 2016, using its 12 km
pipeline for six offset gas wells, Ikkuma's reserves and the
present value information relating thereto and the net asset value
of the Corporation's shares. Although Ikkuma believes that the
expectations and assumptions on which the forward‑looking
statements and information are based are reasonable, undue reliance
should not be placed on the forward‑looking statements and
information because Ikkuma cannot give any assurance that they will
prove to be correct. Since forward‑looking statements and
information address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risk. These include but are
not limited to the risks associated with the oil and gas industry
in general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; failure to obtain
necessary regulatory approvals for planned operations; health,
safety and environmental risks; uncertainties resulting from
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; volatility of
commodity prices, currency exchange rate fluctuations; imprecision
of reserve estimates; and competition from other explorers) as well
as general economic conditions, stock market volatility, and the
ability to access sufficient capital. We caution that the
foregoing list of risks and uncertainties is not exhaustive. The
recovery and reserve estimates contained in this press release are
estimates only and there is no guarantee that the estimated
reserves will be recovered.
In addition, the reader is cautioned that historical results
are not necessarily indicative of future performance. The
forward-looking statements and information contained in this press
release are made as of the date hereof and Ikkuma undertakes no
obligation to update publicly or revise any forward‑looking
statement or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
Certain information set out herein may be considered as
"financial outlook" within the meaning of applicable securities
laws. The purpose of this financial outlook is to provide
readers with disclosure regarding Ikkuma's reasonable expectations
as to the anticipated results of its proposed business activities
for the periods indicated. Readers are cautioned that the
financial outlook may not be appropriate for other
purposes.
Oil and Gas Advisory
In this press release, the abbreviation boe means a barrel of
oil equivalent derived by converting gas to oil in the ratio of 6
Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). 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. Given that
the value ratio based on the current price of crude oil as compared
to natural gas is significantly different from the energy
equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf
of gas to 1 bbl of oil basis may be misleading as an indication of
value.
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.
SOURCE Ikkuma Resources Corp.