CALGARY, ALBERTA--(Marketwired - Jan. 20, 2014) - Raging River Exploration Inc. ("Raging River" or the "Company") (TSX:RRX) is pleased to report that estimated daily production reached a record of 9,000 boe/d (96% oil) during the second half of December 2013. Further, based on field estimates the Company's fourth quarter 2013 average production increased 37% from the third quarter average to 7,700 boe/d (96% oil) which is 5% ahead of our previous fourth quarter guidance of 7,300-7,400 boe/d.
Raging River exited 2013 with 16 net wells awaiting completion and is off to a solid start in the first quarter with 17 gross (15.5 net) wells drilled since January 1, 2014. With production averaging above 9,000 boe/d in the first two weeks of January, we anticipate achieving our 2014 average production level of 9,500 boe/d in early February. Production is expected to be strong through the first quarter followed by a modest reduction in the second quarter due to breakup and we are reaffirming our average 2014 production guidance of 9,500 boe/d.
The Company is also pleased to report its 2013 year-end oil and gas reserves. 2013 proven plus probable reserves of 42.7 mmboe represent a 148% increase from 2012. Finding, development and acquisition costs were reduced by 26% from 2012 to $19.40/boe demonstrating the quality of the Company's continuously expanding drilling inventory.
Reserve Report Highlights:
The following tables summarize certain information contained in the independent reserves report prepared by Sproule Associates Ltd. ("Sproule") as of December 31, 2013. The report was prepared in accordance with definition, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR by March 31, 2014.
December 31, 2013 | ||||||
Reserves Category Gross Working Interest |
Oil Mbbl |
Gas MMcf |
Oil Equivalent mBOE |
BTAX PV 10% M$'s |
Future Development Capital M$'s |
Net Undeveloped Wells Booked |
Proved Developed Producing | 11,450 | 3,244 | 12,004 | 440,021 | - | - |
Proven Undeveloped | 18,653 | 3,948 | 19,372 | 403,879 | 481,851 | 525.8 |
Total Proven | 30,103 | 7,192 | 31,376 | 843,900 | 481,851 | 525.8 |
Probable Developed Producing | 4,673 | 1,336 | 4,904 | 138,715 | - | - |
Probable Undeveloped | 6,216 | 1,282 | 6,450 | 209,169 | 3,640 | 4.5 |
Total Proven Plus Probable | 40,993 | 9,810 | 42,729 | 1,191,785 | 485,491 | 530.3 |
Notes:
2013 FD&A Costs ($000's) | Proved | Proved plus Probable |
Development | 172,000 | 172,000 |
Net Acquisitions | 104,000 | 104,000 |
Change in FDC | 298,429 | 259,940 |
Total Capital | 574,429 | 535,940 |
2013 Reserve Additions Mboe | ||
Acquisitions | 3,492 | 4,726 |
Additions/Revisions | 18,359 | 22,893 |
Total | 21,851 | 27,619 |
2013 FD&A ($/boe) | 26.29 | 19.40 |
Operations Update
Raging River is in the midst of another active quarter in which we anticipate drilling 60 net horizontal wells. We currently have two drilling rigs operational and have drilled 17 gross (15.5 net) wells this quarter at a 100% success rate. With completion operations well under way a new well is being placed on production every day and it is expected that trend will continue throughout the quarter.
To date this quarter we have successfully tested four previously undrilled sections at Beadle with expectations that an additional 12-15 previously undrilled sections will be tested this quarter.
In the recently acquired Forgan area, the operations team has been actively working towards obtaining our first drilling licenses in the area and it is now expected that we will be able to drill up to four wells testing previously undrilled sections in this area during the first quarter.
Raging River continues to be active on adding additional lands in the Viking light oil fairway. Since early December 2013, 15 additional sections of land have been added in the greater Beadle area. Our total prospective Viking light oil land holdings are now in excess of 215 net sections.
Raging River's team remains dauntless in its pursuit of operational and executional excellence to continue delivering per share production, reserves and value growth to our shareholders while maintaining a pristine balance sheet.
Additional corporate information can be found on our website at www.rrexploration.com or on www.sedar.com.
FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains forward looking statements relating to: expectations as to drilling and completion activity in the first quarter of 2014, including the timing thereof, expectations of achieving certain production levels in the first quarter of 2014, expectations as to Raging River's drilling inventory, estimates of future development capital associated with the Company's reserves, expectations about drilling and testing plans in the Beadle and Forgan areas, and, Raging River's intent to deliver per share production, reserves and value growth to its shareholders while maintaining a pristine balance sheet . Statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. In addition, the use of any of the words "guidance", "initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate", "believe", "potential", "should", "unaudited", "forecast", "future", "continue", "may", "expect", "project", and similar expressions are intended to identify forward-looking statements.
The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including but not limited to the success of optimization and efficiency improvement projects, the availability of capital, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the ability of the Company to effectively manage price differentials, Raging River's growth strategy, general economic conditions, availability of required equipment and services and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements 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 risks. These include, but are not limited to, 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; as the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Refer to Raging River's most recent annual information form dated March 20, 2013 on SEDAR at www.sedar.com and risks contained therein.
The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Finding, Development and Acquisition ("FD&A") Costs: Finding and development costs including acquisitions and dispositions have been presented herein. While NI 51-101 requires that the effects of acquisitions and dispositions be excluded, FD&A costs have been presented because acquisitions and dispositions can have a significant impact on the Company's ongoing reserve replacement costs and excluding these amounts could result in an inaccurate portrayal of the Company's cost structure. The Company's finding and development costs, excluding the effects of acquisitions and dispositions, for 2013 were $25.62/boe on a proved basis and $18.87/boe on a proved plus probable basis. The Company's finding and development costs, excluding the effects of acquisitions and dispositions, for 2012 were $31.02/boe on a proved basis and $26.36/boe on a proved plus probable basis (the additions to reserves used for the 2012 finding and development costs represent a comparison to the opening reserves balance which were the reserves acquired from Wild Stream Exploration Inc. by Raging River on March 16, 2012). The average finding and development costs over the last three years have not been presented herein because the Company only began active operations in March 2012. 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 costs generally will not reflect total finding and development costs related to reserves additions for that year.
Net Asset Value per Share: Net asset value per share as presented herein is based on the PVBT10 of proven plus probable reserves as at December 31, 2013 of $1,192 million, an internal estimate of Raging River's undeveloped land value of $108 million, estimated 2013 year end net debt of $101 million, dilutive securities proceeds of $55 million for total net asset value of $1,254 million and with 195.2 million shares outstanding on a fully diluted basis a net asset value per share of $6.42/share
Meaning of Boe: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Non-IFRS Measures: The Company uses terms in this press release that are not measures recognized by International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS, including "net debt" and "operating netback". Therefore, they may not be comparable to performance measures presented by others. For additional information relating to these measures and how the Company calculates these measures, see management's discussion and analysis for the period ended September 30, 2013, which is available on the SEDAR website at www.sedar.com.
Contact Information: