CALGARY. Alberta, Dec. 02, 2019 (GLOBE NEWSWIRE) -- Pan Orient Energy Corp. (POE – TSXV), on behalf of its 71.8% owned subsidiary Andora Energy Corporation (“Andora”), is pleased to release the September 30, 2019 Contingent Bitumen Resources Report (“Resources Report”) which is a National Instrument 51-101 compliant resources evaluation for Andora’s oil sands interests at Sawn Lake Alberta, Canada, as evaluated by independent qualified reserves evaluator Sproule Associates Limited (“Sproule”). The evaluation included all of Andora’s Oil Sands Leases at Sawn Lake based on exploitation using Steam Assisted Gravity Drainage (“SAGD”).
Please note that unless otherwise stated, amounts are in Canadian dollars and volumes and financial amounts are net to Andora.
Highlights of Sawn Lake, Alberta Contingent Resources Report as at September 30, 2019
Resources Report
Sawn Lake SAGD Development
Andora holds interests in 78 sections (34.7 net sections) of heavy oilsands leases in Sawn Lake, within the central Alberta Peace River Oil Sands region. Andora is focused on developing the bitumen resources at Sawn Lake using SAGD development. Contingent resources have been assigned to the Sawn Lake Central and Sawn Lake South where Andora is the operator.
A SAGD demonstration project at the Sawn Lake Central block commenced in 2013 and consisted of one SAGD wellpair drilled to a depth of 650 meters and a horizontal length of 780 meters and a SAGD facility for steam generation, water handling and bitumen treating. Steam injection commenced in May 2014 and produced bitumen from September 2014 to February 2016. The demonstration project reached a steady state production level in February 2016 of 620 BOPD with an instantaneous steam-oil ratio (“ISOR”) of 2.1. The demonstration project successfully captured the key data associated with the objectives of the demonstration project and operations were suspended at the end of February 2016. The demonstration project proved that the SAGD process works in the Bluesky formation at Sawn Lake, established characteristics of ramp up through stabilization of SAGD performance, indicated the productive capability, ISOR, and provided critical information required for well and facility design associated with future commercial development. Production results to date are not necessarily indicative of long-term performance or of ultimate recovery and the Sawn Lake demonstration project has not yet proven that it is commercially viable.
The development plan for Sawn Lake Central and Sawn Lake South is for development in stages with five standardized “battery scale” SAGD facilities where growth is primarily funded by net operating income generated by the project. After tax cash flow in the Sproule evaluation is Andora’s share of revenue less royalty burden, operating expenses, abandonments, capital expenditures and income tax. The first stage is commercial expansion of the demonstration project SAGD facility to 1600 BOPD (3200 BOPD gross) with reactivation of the existing facility and wellpair, installation and testing of Andora’s PWB and drilling of an additional four wellpairs. Regulatory approval was received in December 2017 for commercial expansion of the existing Sawn Lake Central demonstration project to 1600 BOPD (3200 BOPD on a gross basis) using Andora’s PWB. The lead time to acquiring the necessary equipment and commencing operations would be approximately 18 months and another 6 months is required until the start of bitumen production (after development of the steam chamber). Further stages of development include expansion to 5000 BOPD of the first SAGD battery and then an additional four SAGD batteries which are located in the best parts of the reservoir. The timing of individual batteries is dependent on regulatory approval and after tax cash flow from existing operations for funding of new investment.
It is recognized that stable crude oil prices, and specifically Western Canada Select benchmark prices, will have a significant impact on project economics and financing, and on decisions regarding the timing and extent of future development.
Andora Sawn Lake, Alberta Interests at September 30, 2019 | |||
Gross Sections | Working Interest | Unrisked Best Estimate Contingent Resources - Company Gross (million barrels) | |
Central Block (Andora operated) | 11 | 50% | 149.6 |
South Block (Andora operated) | 16 | 100% | 78.2 |
North Block (Andora operated) | 9 | 100% | - |
North Block (non-operated) | 42 | 10% | - |
78 | 227.8 |
Summary of Contingent Bitumen Resources as of September 30, 2019 as provided by Sproule | ||
Marketable Resources - Company Gross (million barrels) | Andora | Pan Orient 71.8% |
Risked (evaluation assigned an 85% chance of development) | ||
Contingent - Low Estimate “1C” | 174.9 | 125.6 |
Contingent - Best Estimate “2C” | 193.6 | 139.0 |
Contingent - High Estimate “3C” | 228.2 | 163.8 |
Unrisked | ||
Contingent - Low Estimate “1C” | 205.7 | 147.7 |
Contingent - Best Estimate “2C” | 227.8 | 163.6 |
Contingent - High Estimate “3C” | 268.4 | 192.7 |
Sawn Lake Oil Sands Project | |||||
Summary of Net Present Values as of September 30, 2019 | |||||
Contingent Resources as provided by Sproule | |||||
Andora 100% (Cdn$ million) | |||||
Net Present Values Before Tax (Risked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 2,937 | 659 | 202 | 73 | |
Contingent - Best Estimate “2C” | 3,953 | 851 | 265 | 101 | |
Contingent - High Estimate “3C” | 6,020 | 1,113 | 325 | 122 | |
Net Present Values After Tax (Risked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 2,259 | 500 | 150 | 51 | |
Contingent - Best Estimate “2C” | 3,050 | 648 | 199 | 74 | |
Contingent - High Estimate “3C” | 4,642 | 850 | 245 | 89 | |
Net Present Values Before Tax (Unrisked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 3,455 | 775 | 238 | 86 | |
Contingent - Best Estimate “2C” | 4,649 | 1,000 | 311 | 119 | |
Contingent - High Estimate “3C” | 7,082 | 1,309 | 382 | 143 | |
Net Present Values After Tax (Unrisked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 2,656 | 586 | 175 | 60 | |
Contingent - Best Estimate “2C” | 3,585 | 761 | 232 | 86 | |
Contingent - High Estimate “3C” | 5,459 | 999 | 287 | 104 | |
1 | For risked resources and values, the evaluation assigned an 85% chance of development for Sawn Lake. | ||||
2 | Resources assessed at forecast crude oil reference prices and costs. | ||||
3 | Bitumen production is forecast to commence in 2022. | ||||
4 | The reference prices for heavy oil per barrel (Western Canada Select “WCS” 20.5 API in Canadian dollars) are $63.10 for 2022, $64.36 for 2023, $65.65 for 2024, $66.96 for 2025, $68.30 for 2026, $69.67 for 2027, $71.06 for 2028 and increase at 2% per year thereafter. | ||||
5 | Bitumen revenue per barrel for these resources is $15.85 less than the associated WCS reference price in 2022 and the differential increases between $0.23 to $0.29 per year until 2097. | ||||
6 | The reference prices for natural gas (AECO-C Spot price per MMBTU in Canadian dollars) are $2.81 for 2022, $2.89 for 2023, $2.98 for 2024, $3.06 for 2025, $3.15 for 2026, $3.24 for 2027, $3.33 for 2028, $3.42 for 2029 and increase at 2% per year thereafter. | ||||
7 | Future development costs (including inflation of 0% per annum for 2019 and 2% per annum thereafter) for Contingent Resources which have been deducted in calculating the before tax NPV: | ||||
▪Unrisked Low Estimate – CDN$3,108 million with the drilling of 358 gross well pairs and building facilities | |||||
▪Unrisked Best Estimate – CDN$3,094 million with the drilling of 358 gross well pairs and building facilities | |||||
▪Unrisked High Estimate – CDN$3,218 million with the drilling of 358 gross well pairs and building facilities | |||||
8 | The values disclosed may not represent fair market value. | ||||
9 | There is uncertainty that it will be commercially viable to produce any portion of the resources. |
Sawn Lake Oil Sands Project | |||||
Summary of Net Present Values as of September 30, 2019 | |||||
Contingent Resources as provided by Sproule | |||||
Pan Orient 71.8% Interest in Andora (Cdn$ million) | |||||
Net Present Values Before Tax (Risked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 2,109 | 473 | 145 | 52 | |
Contingent - Best Estimate “2C” | 2,837 | 611 | 190 | 73 | |
Contingent - High Estimate “3C” | 4,320 | 799 | 233 | 87 | |
Net Present Values After Tax (Risked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 1,622 | 359 | 107 | 37 | |
Contingent - Best Estimate “2C” | 2,189 | 465 | 143 | 53 | |
Contingent - High Estimate “3C” | 3,332 | 610 | 176 | 64 | |
Net Present Values Before Tax (Unrisked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 2,480 | 556 | 171 | 62 | |
Contingent - Best Estimate “2C” | 3,337 | 718 | 223 | 85 | |
Contingent - High Estimate “3C” | 5,083 | 940 | 274 | 103 | |
Net Present Values After Tax (Unrisked) | 0% | 5% | 10% | 15% | |
Contingent - Low Estimate “1C” | 1,906 | 421 | 126 | 43 | |
Contingent - Best Estimate “2C” | 2,573 | 546 | 167 | 61 | |
Contingent - High Estimate “3C” | 3,918 | 717 | 206 | 75 | |
1 | Results represent Pan Orient’s 71.8% interest in Andora. | ||||
2 | For risked resources and values, the evaluation assigned an 85% chance of development for Sawn Lake. | ||||
3 | Resources assessed at forecast crude oil reference prices and costs. | ||||
4 | Bitumen production is forecast to commence in 2022. | ||||
5 | The reference prices for heavy oil per barrel (Western Canada Select “WCS” 20.5 API in Canadian dollars) are $63.10 for 2022, $64.36 for 2023, $65.65 for 2024, $66.96 for 2025, $68.30 for 2026, $69.67 for 2027, $71.06 for 2028 and increase at 2% per year thereafter. | ||||
6 | Bitumen revenue per barrel for these resources is $15.85 less than the associated WCS reference price in 2022 and the differential increases between $0.23 to $0.29 per year until 2097. | ||||
7 | The reference prices for natural gas (AECO-C Spot price per MMBTU in Canadian dollars) are $2.81 for 2022, $2.89 for 2023, $2.98 for 2024, $3.06 for 2025, $3.15 for 2026, $3.24 for 2027, $3.33 for 2028, $3.42 for 2029 and increase at 2% per year thereafter. | ||||
8 | Future development costs (including inflation of 0% per annum for 2019 and 2% per annum thereafter) for Contingent Resources which have been deducted in calculating the before tax NPV: | ||||
▪Unrisked Low Estimate – CDN$2,232 million with the drilling of 358 gross well pairs and building facilities | |||||
▪Unrisked Best Estimate – CDN$2,221 million with the drilling of 358 gross well pairs and building facilities | |||||
▪Unrisked High Estimate – CDN$2,311 million with the drilling of 358 gross well pairs and building facilities | |||||
9 | The values disclosed may not represent fair market value. | ||||
10 | There is uncertainty that it will be commercially viable to produce any portion of the resources. |
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate”, "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of resources estimates and estimates of recoverable quantities of bitumen, obtaining and timing of regulatory approvals, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.
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.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Pan Orient Energy Corp.
Jeff Chisholm, President and CEO (located in Bangkok, Thailand)
Email: jeff@panorient.ca
- or -
Bill Ostlund, Vice President Finance and CFO
Telephone: (403) 294-1770