CALGARY, Aug. 20, 2014
/CNW/ - PanTerra Resource Corp. ("PanTerra" or the
"Corporation") (TSX VENTURE:PRC) is pleased to announce that
it has entered into an arm's length purchase and sale agreement
dated August 19, 2014 (the
"Purchase and Sale Agreement") with a public Canadian oil
and gas company to acquire (the "Acquisition") certain
petroleum and natural gas assets located in several areas of the
Western Canadian foothills, including the Brown Creek, Stolberg,
Deanne, Burnt Timber, Moose, Jumping Pound, and Ricinus areas in
Alberta (collectively, the
"Assets"), effective as of July 1,
2014, for a purchase price of $24.0
million in cash, subject to adjustments. The
Acquisition is subject to standard industry closing conditions.
The Acquisition provides the Corporation an entrance into the
Central and Southern Alberta
foothills areas and includes a strategic working interest in the
production facilities at Stolberg and an ownership of the Ram River
gas plant. The Assets provide a stable production base, an
attractive decline rate of approximately 9-10% and a minority
working interest in approximately 49,350 gross (5,922 net) acres of
land. The Assets are currently producing approximately 1,280 BOE
per day (89% natural gas) and have an estimated lending value of
$17.0 million. The Corporation has,
to date, identified 18 gross unrisked and unbooked locations on the
Assets. The recognized upside on the undeveloped acreage provides
the Corporation with substantial running room to develop and
consolidate anumber ofpotential new core areas, subject to further
technical review. Targets identified to date consist of oil and
liquids rich natural gas opportunities in the Cretaceous aged
Cardium, Viking, Falher and Dalhousie zones.
The Assets are a key component that greatly expands PanTerra's
foothills production and undeveloped land footprint well beyond
that which has been realized through its previously announced
recent acquisitions. The following information relates to the
Acquisition and the Assets:
Production(1)
|
|
1,280 BOE/d
(89% natural gas)
|
|
$18,632/BOE/d
|
2013 Cash
flow(2)
|
|
$5.5
million
|
|
4.27 times cash
flow
|
Reserves
(PDP)(3)
|
|
4.56 million BOE (11%
liquids)
|
|
$5.26/BOE
|
Reserves
(Proven)(3)
|
|
4.56 million BOE (11%
liquids)
|
|
$5.26/BOE
|
Reserves
(P+P)(3)
|
|
5.18 million BOE (11%
liquids)
|
|
$4.63/BOE
|
NPV10% PDP
(3)
|
|
$33.4
million
|
|
72% of NPV10%
value
|
NPV10%
Proven(3)
|
|
$33.4
million
|
|
72% of NPV10%
value
|
NPV10%
P+P(3)
|
|
$36.11
million
|
|
66% of NPV10%
value
|
Notes:
(1)
Management's estimate of current production as at July 1,
2014.
|
(2) Net
operating income from the effective date of the Acquisition, ending
June 30, 2015, as forecast in the McDaniel Report.
|
(3) As
assigned by the McDaniel Report effective December 31,
2013.
|
Reserves Data for the Assets
The reserves data set forth below (the "Reserves Data")
is based upon an evaluation effective December 31, 2013 by McDaniel and Associates
Consultants Ltd. ("McDaniel"), an independent qualified
reserves evaluator, dated April 9,
2014. (the "McDaniel Report"). The Reserves Data
summarizes the oil, natural gas and NGL reserves associated with
the Assets and the net present values of future net revenue for
such reserves using forecast prices and costs, January 1, 2014 McDaniel forecast price deck. The
crude oil, natural gas and NGL reserve estimates presented in the
McDaniel Report are based on the guidelines contained in the
Canadian Oil and Gas Evaluation Handbook prepared jointly by the
Society of Petroleum Evaluation Engineers (Calgary Chapter) and the
Canadian Institute of Mining, Metallurgy & Petroleum Society
(the "COGE Handbook") and the reserve definitions contained
in both National Instrument 51-101 - Standards of Disclosure for
Oil and Gas Activities ("NI 51-101") and the COGE
Handbook.
About PanTerra
PanTerra is a diversified junior public oil and gas company
listed on the TSX Venture Exchange under the symbol "PRC", 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.panterraresource.com.
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.
Abbreviations
The following abbreviations used in this news release have the
meanings set forth below.
bbl
|
Barrel
|
Mcf
|
Thousand cubic
feet
|
NGL
|
Natural gas
liquids
|
|
|
Caution Respecting Reserves Information
The determination of oil and gas reserves involves the
preparation of estimates that have an inherent degree of associated
uncertainty. Categories of proved and probable reserves have been
established to reflect the level of these uncertainties and to
provide an indication of the probability of recovery. The
estimation and classification of reserves requires the application
of professional judgment combined with geological and engineering
knowledge to assess whether or not specific reserves classification
criteria have been satisfied. Knowledge of concepts including
uncertainty and risk, probability and statistics, and deterministic
and probabilistic estimation methods is required to properly use
and apply reserves definitions.
It should not be assumed that the estimates of future net
revenues presented in the table set out above represent the fair
market value of the reserves. There are numerous uncertainties
inherent in estimating quantities of crude oil, NGL and natural gas
reserves and the future cash flows attributed to such reserves. The
reserve and associated cash flow information set forth above are
estimates only. The recovery and reserve estimates of the crude
oil, NGL 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 NGL reserves may be
greater than or less than the estimates provided herein. In
general, estimates of economically recoverable crude oil and
natural gas reserves and the future net cash flows therefrom are
based upon a number of variable factors and assumptions, such as
historical production from the properties, production rates,
ultimate reserve recovery, timing and amount of capital
expenditures, marketability of crude oil and natural gas, royalty
rates, the assumed effects of regulation by governmental agencies
and future operating costs, all of which may vary materially from
actual results. For those reasons, among others, estimates of the
economically recoverable crude oil and natural gas reserves
attributable to any particular group of properties, classification
of such reserves based on risk of recovery and estimates of future
net revenues associated with reserves may vary and such variations
may be material. The actual production, revenues, taxes and
development and operating expenditures with respect to the reserves
associated with the Assets may vary from the information presented
herein and such variations could be material.
The recovery and reserve estimates of oil, natural gas and NGL
reserves provided herein are estimates only. Actual reserves may be
greater than or less than the estimates provided herein. The
estimated future net revenue from the production of reserves from
the Assets does not represent the fair market value of such
reserves.
Caution Respecting BOE
In this news 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 conversation ratio on a 6 Mcf of gas to 1 bbl of
oil basis may be misleading as an indication of value.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains certain statements or disclosures
relating to PanTerra, the Acquisition and the Assets that are based
on the expectations of PanTerra as well as assumptions made by and
information currently available to PanTerra which may constitute
forward-looking information under applicable securities
laws. All such statements and disclosures, other than those of
historical fact, which address activities, events, outcomes,
results or developments that PanTerra anticipates or expects may,
or will occur in the future (in whole or in part) should be
considered forward-looking information. In some cases,
forward-looking information can be identified by terms such as
"forecast", "future", "may", "will", "expect", "anticipate",
"believe", "potential", "enable", "plan", "continue",
"contemplate", "pro-forma", or other comparable terminology. In
particular, this press release makes reference to the expected
completion of the Acquisition, including the ability of the
Corporation to satisfy all necessary conditions to the closing of
the Acquisition, the number of unrisked and unbooked locations and
the provision of substantial running room to develop and
consolidate potential new core areas. Readers are cautioned that
there is no assurance that the transaction referenced herein will
proceed. Many factors could cause the performance or achievement by
PanTerra to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive. The
forward-looking statements contained in this press release are
expressly qualified by this cautionary statement. The Corporation
is not under any duty to update any of the forward-looking
statements after the date of this press release or to conform such
statements to actual results or to changes in the Corporation's
expectations and the Corporation disclaims any intent or obligation
to update publicly any forward-looking statements, whether as a
result of new information, future events or results or otherwise,
other than as required by applicable securities laws.
SOURCE PanTerra Resource Corp.