CALGARY, AB--(Marketwired - April 07, 2016) - Marquee Energy Ltd. ("Marquee" or the "Company") (TSX VENTURE: MQL) announces its fourth quarter operational results and financial results for the three and twelve months ended December 31, 2015. The Company's financial statements and Management's Discussion and Analysis ("MD&A") for the three months and twelve months ended December 31, 2015 are available on SEDAR at and on Marquee's website at


The Company's operational and financial highlights for the year and quarter ending December 31, 2015 include:

  • Continued consolidation efforts at Michichi with the completion of a $16.3 million strategic acquisition and a $12.7 million strategic acquisition;
  • Completed the sale of a production volume royalty on its Lloydminster property for proceeds of $20 Million;
  • Completed an infrastructure-based facility agreement for proceeds of $15 million;
  • Reduced net debt year-over-year by 20% to $50.3 million from $63.1 million in 2014;
  • Company recorded a 2015 impairment charge of $6.2 million on its heavy oil and non-core assets, while maintaining a significant surplus at its core Michichi asset;
  • Fourth quarter 2015 funds flow from operations were $2.5 million or $0.02 per share and contributed to full year 2015 funds flow from operations of $18.4 million or $0.15 per share;
  • Fourth quarter production volumes increased 5% over the third quarter, averaging 4,924 boe per day. Annual average production for 2015 increased 4% over 2014 to 5,068 boe per day;
  • Achieved G&A expenses of $2.30 per boe and $3.34 per boe for the three months and year ended December 31, 2015, respectively, representing a decrease of 31% and 10%, respectively, over the comparable 2014 periods;
  • Realized $4.64 per boe of gains on derivatives through the Company's hedging program during the fourth quarter. Annual average netbacks were $14.47 per boe;
  • Annual capital expenditures of $18.5 million reflecting $11.1 million related to the drilling, completion and tie in of 6 successful wells: 5 horizontal wells at Michichi and 1 vertical well at Lloydminster, $3.9 million in facility costs, $2.5 million in land and seismic, and $1.0 million in fixed assets;
  • The 5 well 2015 drilling program at Michichi achieved results above expectations and expanded the Banff play northward and southward; and
  • Raised $1,694,980 in proceeds through the issuance of 2,824,967 common shares issued on a Canadian Exploration Expense ("CEE") flow-through basis at a price of $0.60 per flow-through share representing a 58% premium to the trading price of Marquee's common shares before the announcement of the financing.


    Three months ended
December 31,
    Year ended
December 31,
    2015     2014     2015     2014  
Financial (000's except per share and per boe amounts)                                
Oil and natural gas sales (1)   $ 12,153     $ 20,697     $ 55,137     $ 89,645  
Funds flow from operations (2)   $ 2,471     $ 10,830     $ 18,402     $ 37,312  
  Per share - basic and diluted   $ 0.02     $ 0.09     $ 0.15     $ 0.34  
  Per boe   $ 5.45     $ 22.60     $ 9.95     $ 21.04  
Net income (loss)   $ (26,701 )   $ 2,295     $ (53,419 )   $ (12,810 )
  Per share - basic and diluted   $ (0.22 )   $ 0.02     $ (0.44 )   $ (0.12 )
Capital expenditures   $ 2,386     $ 17,914     $ 18,539     $ 58,275  
Asset acquisitions   $ -     $ 215     $ 27,049     $ 2,435  
Proceeds on dispositions   $ -     $ -     $ (38,653 )   $ (15,728 )
Net debt (2)   $ 50,279     $ 63,130     $ 50,279     $ 63,130  
Total Assets   $ 227,941     $ 281,976     $ 227,941     $ 281,976  
Weighted average basic and diluted shares outstanding     120,617,040       120,338,002       120,410,342       110,492,215  
Net wells drilled     -       8.0       6.0       22.0  
Daily sales volumes                                
  Oil (bbls per day)     1,691       1,658       1,646       1,425  
  Heavy Oil (bbls per day)     461       580       598       537  
  NGL's (bbls per day)     176       150       185       195  
  Natural Gas (mcf per day)     15,578       16,923       15,831       16,203  
  Total (boe per day)     4,924       5,209       5,068       4,858  
  % Oil and NGL's     47 %     46 %     48 %     44 %
Average realized prices                                
  Light Oil ($/bbl)   $ 42.76     $ 71.79     $ 46.60     $ 84.71  
  Heavy Oil ($/bbl)   $ 29.35     $ 61.73     $ 38.26     $ 72.54  
  NGL's ($/bbl)   $ 32.67     $ 47.32     $ 34.91     $ 56.85  
  Natural Gas ($/mcf)   $ 2.60     $ 3.73     $ 2.84     $ 4.62  
  Revenue ($/boe)   $ 26.83     $ 43.19     $ 29.81     $ 50.56  
  Royalties ($/boe)   $ (3.41 )   $ (3.64 )   $ (3.57 )   $ (5.71 )
  Operating and transportation costs ($/boe)   $ (18.64 )   $ (16.86 )   $ (16.74 )   $ (17.26 )
  Operating netbacks prior to hedging (2)   $ 4.78     $ 22.69     $ 9.50     $ 27.58  
  Realized hedging gain (loss) ($/boe)   $ 4.64     $ 3.16     $ 4.97     $ (0.91 )
  Operating netbacks ($/boe) (2)   $ 9.42     $ 25.85     $ 14.47     $ 26.67  
    (1) Before royalties
    (2) Defined under the Non-GAAP Measures section of this press release


Marquee's year end reserves for 2015 are based on the Sproule & Associates Limited ("Sproule") independent evaluation of the Company's reserves dated effective December 31, 2015, which has been prepared in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Additional reserves information required under NI 51-101 will be included in Marquee's Annual Information Form to be filed on SEDAR.

Sproule is using a price forecast of US$45 WTI and US$60 WTI for light oil for 2016 and 2017, respectively, and $2.13 per GJ and $2.80 per GJ for AECO natural gas in 2016 and 2017, respectively.


  • Increased total proved ("1P") reserves by 19% to 15.3 mmboe (54% oil and NGLs), and proved plus probable ("2P") reserves by 13% to 22.6 mmboe (56% oil and NGLs);
  • Marquee's 2015 capital program added 1P reserves at a cost of $13.82 per boe, including future development capital ("FDC");
  • Finding, development and acquisition costs, including the increase in FDC, are $9.45 per boe on a 1P basis and $3.99 per boe on a 2P basis;
  • 1P reserves comprise 68% of the 2P reserves as at December 31, 2015; and
  • Michichi represents 92% of Marquee's 2P before tax NPV10.

Summary of Reserves

As at December 31, 2015(1)

    Gross Company Reserves (2)
Description   Light Crude Oil (Mbbl)   Heavy Crude Oil (Mbbl)   Conventional Natural Gas (MMcf)   Natural Gas Liquids (Mbbl)   Total (Mboe)
Proved producing   2,583   476   28,905   251   8,128
Proved non-producing   182   -   1,477   7   436
Proved undeveloped   3,919   605   11,523   243   6,688
Total proved   6,685   1,081   41,906   502   15,252
Probable   3,374   649   18,130   256   7,301
Total proved plus probable   10,058   1,730   60,036   758   22,552
    (1) Based on Sproule December 31, 2015 forecast prices
    (2) Gross Company reserves are the Company’s total working interest share before the deduction of royalties

Summary of Before Tax Net Present Values

As at December 31, 2015(1)

    Before Tax Net Present Value of Future Revenue ($M)
    Discount Rate
Description   0%   5%   8%   10%   12%
Proved producing   $84,321   $73,122   $67,030   $63,419   $60,156
Proved non-producing   $5,264   $3,745   $3,105   $2,757   $2,459
Proved undeveloped   $140,781   $101,439   $83,510   $73,494   $64,777
Total proved   $230,366   $178,306   $153,645   $139,670   $127,392
Probable   $190,844   $129,032   $105,093   $92,580   $82,127
Total proved plus probable   $421,211   $307,337   $258,738   $232,251   $209,520
Per Basic Share   $3.42   $2.49   $2.10   $1.89   $1.70
  (1) Based on Sproule December 31, 2015 forecast prices

Reconciliation of Reserves

    2015 Reserves Reconciliation
Description (mboe)   December 31, 2014   Acquired (Sold)   Production   Additions, revisions   December 31, 2015
Total proved   12,838   3,429   (1,855)   840   15,252
Probable   7,178   1,699   0   (1,576)   7,301
Proved plus probable   20,016   5,127   (1,855)   (736)   22,552

Finding, Development and Acquisition Costs

Marquee incurred capital expenditures of $18.5 million in 2015 (2014 - $59.6 million; 2013 - $33.3 million), of which $16.0 million (2014 - $51.4 million; 2013 – 28.1 million) was spent on exploration and development and $2.5 million (2014- $8.2 million; 2013 - $5.2 million) was spent on land and seismic. Costs related to reserve acquisitions in 2015 are $27.0 million (2014 - $11.8 million; 2013 – $34.8 million), and includes the announced purchase price of acquisitions including any estimated working capital deficit or surplus rather than the amounts allocated to property, plant and equipment for accounting purposes. The following table summarizes Marquee's Finding, Development and Acquisition costs including changes in Future Development Costs:

        Including the Change in Future Development Costs(1)
Description   2015   2014   2013   3 Year Weighted Average
Total proved ($/boe)                
  F&D costs(4)   $13.82   $21.90   $23.03   $19.58
  FD&A costs(4)   $9.45   $14.76   $16.66   $13.62
  FDC(4)   $113 Million   $74 Million   $91 million    
Proved plus probable ($/boe)                
  F&D costs(4)   N/A(2)   $19.70   $24.60   $22.15(3)
  FD&A costs(4)   $3.99   $14.12   $14.21   $10.77
  FDC(4)   $166 million   $152 million   $133 million    
    (1) Future development costs excludes capitalized administration costs
    (2) The change in FDC (reduction in drilling costs) and the change in 2P reserves (Probable Reserves moved into the Proven category) are both negative, generating a 2P F&D number with no comparative value
    (3) 2 year average shown
    (4) See the “Additional Advisories” section of this press release for information pertaining to these oil and gas metrics


The resource evaluation was prepared by Sproule in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook ("COGEH") and includes the lands held by Marquee as of December 31, 2015 in the Michichi area of Alberta that have development potential for the presence of hydrocarbons within the Detrital and Banff zones (the "Sproule Resource Assessment").

All resource data disclosed herein is as set forth in the Sproule Resource Assessment and reflects only Marquee's working interest share of such resources for the acreage covered by the Sproule Resource Assessment ("Study Area").

Resource Information

The following table summarizes the results of the Sproule Resource Assessment of Marquee's Michichi assets as of December 31, 2015.

Category   (Mbbl) Discovered Petroleum Initially In Place   Ultimate Reserves*   Risked Contingent Resources
        Oil (Mbbl)   Oil (Mbbl)   Sales Gas (MMcf)   Natural Gas Liquids (Mbbl)
Best Estimate (2C)   370,864   12,130   13,073   38,436   811
  1. Contingent resources are those quantities of petroleum estimated to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.
  2. Contingent resources have been risked for chance of commerciality. A 10 percent chance of development risk factor has been applied.
  3. Contingent resources have been sub-classified as Development Pending.
  4. There is no certainty that it will be commercially viable to produce any portion of the resources.
  5. Numbers may not add due to rounding.
  6. The resource estimates are economic using the Sproule price forecast at December 31, 2015. Economics were run based on a development schedule beginning in 2020 with ~26 net wells per year (2 rigs, $1.7 MM per well), and values were discounted back to December 31, 2015.
  7. Ultimate Reserves includes produced oil volumes and remaining oil reserves, as reported in the December 31, 2015 reserves report.


Contingencies associated with contingent resource volumes include only commercial factors; there are no technical contingencies. Specific to this project, the key non-technical contingencies are the following:

  • Productivity of reservoir in areas with no tests or production;
  • Corporate commitment to develop these assets in a timely fashion;
  • Access to infrastructure required to deliver increasing volumes to market;
  • Topographical/surface restrictions limiting access; and
  • Economic conditions, including prices, capital costs, and operating costs.


Contingent resource volumes and the net present values have been risked with a chance of development based on the likelihood that the contingencies identified in the previous section will be resolved. A risk factor of 10% was applied.

Resource Classification and Categorization

The resources were classified in accordance with the Canadian Oil and Gas Evaluation Handbook (COGEH) definitions presented that are consistent with NI 51-101 and used by Sproule.

Petroleum Initially In Place on Company-interest lands were classified as discovered accumulations based on geologic interpretation using existing well data.

The reported DPIIP presented in the above table is a best estimate using deterministic methods. The DPIIP includes lands which have reserves assigned in the previous report titled "Evaluation of the P&NG Reserves of Marquee Energy Ltd. (As of December 31, 2015)," dated April 6, 2016 ("Reserves Report").

Contingent volumes in this evaluation have been sub classified as development pending, based on historic activity levels and the Company's commitment to developing this project.

Significant positive factors relevant to the estimates include:

  • Significant well control and offsetting production;
  • Repeated commercial success of horizontal wells across a greater areal extent of the Marquee's holdings;
  • Production data verifying the sustainability of economic production rates from horizontal wells in the Banff Sand, Banff Carbonate, and Detrital formations;
  • Corporate commitment to develop the asset over a reasonable time frame; and
  • Facilities access enabling full development of the Banff Sand, Banff Carbonate, and Detrital formations on Company-interest lands.

Significant negative factors include:

  • Distance from existing economic production;
  • Potential for certain areas to not be economic with current operating and capital expenditures and product pricing;
  • A substantial amount of capital will be required to develop the resource; and
  • Potential for low commodity prices which could impact the economics of development.

Field Development

Development of the contingent resources is based on the development plan provided by Marquee. First commercial production of the contingent resources is expected to occur in 2020. The development for the Michichi area consists of drilling 28 wells in 2020, 32 wells in 2021, 30 wells in 2022, 32 wells per year from 2023 through 2027, and 14 wells in 2028. The contingent resource development schedule has been timed to begin in 2020, when the reserve inventory has been exhausted. The Company has indicated that the wells will be developed using horizontal multi-stage frac technology, and will be drilled on 160 acre spacing. The development plan is at an advanced stage and represents a continuation of the existing development program in these zones which currently have reserves attributed to them. Therefore, the level of development of the project is categorized as at the development study stage. In aggregate, the development pending contingent resources are considered economically viable using the best case scenario. Hydrocarbons produced in this area are expected to be processed by third party facilities and/or existing facilities operated by the Company. Third party and existing facilities are expected to have the capacity to accommodate the forecasted contingent resources. The Company estimates costs to drill, complete, and tie-in each well as $1.7 million.


Marquee has been focused for the past year on protecting its balance sheet while pursuing strategic opportunities for the long term benefit of its shareholders. In response to low commodity prices the Company reduced its capital budget for 2015. The Company's 5 well drilling program at Michichi achieved results above expectations and served to expand the Banff play northward and southward. Through increased efficiencies and reduced service costs the well costs on the core Michichi play fell from almost $3.0 million in 2013 to approximately $1.7 million by the end of 2015.

Marquee is transitioning from consolidation to the development phase of its long life light oil play at Michichi. The Company has established a drilling inventory in excess of 300 locations validated by an independent contingent resource assessment performed by Sproule. Through its operated land and infrastructure position, Marquee is able to control the pace and development of Michichi while continuing to lower both capital and operating costs.

In 2015 the Company focused on optimization and rationalization of operations and infrastructure. The corporate approach to continuous improvement identified opportunities through which Marquee could reduce overall field costs through comprehensive contracting processes and optimized operations. Savings have been achieved in labor, trucking, chemical, power and maintenance costs. The Company is projecting operating cost savings for 2016 of $6.7 million as compared to 2015. All aspects of the Company's operations will continue to be reviewed and optimized to further reduce operating costs and improve netbacks.

We also continue to actively manage Marquee's general and administrative ("G&A") budget. Savings in G&A expenses have been achieved in areas such as head office staff count, changes to employee benefits, reduction of corporate memberships, renegotiation of software licenses and technology contracts, a reduction of bank standby fees, and suspension of corporate sponsored functions. The Company has also re-negotiated its current office lease in order to take advantage of significantly lower priced office space in the current downtown office leasing market. The marked improvements in these costs can clearly be seen in Marquee's G&A expenses for the fourth quarter of 2015.

With the current uncertainty in oil and natural gas prices, Marquee believes the most prudent course of action is to limit capital spending to free corporate cashflow. The Company currently expects to spend between $3.5 and $5.0 million on capital costs in 2016. The Company evaluates its production on a regular basis and when warranted will shut-in non-economic wells to minimize losses. As such Marquee expects to average approximately 4,000 boed in 2016 dependent on the impact of prevailing commodity prices.

The Company continues to pursue opportunities to monetize non-core assets as a means to further reduce indebtedness. Through this focus on sustainability Marquee will be well positioned, when prices improve, to realize the value that has been delineated in Michichi. Our strengths at Michichi include large oil in place, extensive drilling inventory, strong economics at current oil prices, ownership and control of infrastructure, high working interest ownership and an improving cost structure.

The directors and management of Marquee will continue to monitor changes to commodity pricing and the current economic environment, as it affects both the Company's business and that of its suppliers. Any changes in capital spending will be dependent on projected cash flow and market conditions and are reviewed quarterly by the Board of Directors. The Company has a hedging program in place to provide a base level of revenue surety to protect its viability and any capital spending plans.

The management and board would like to thank our employees for their commitment and dedication to continuous improvement in trying times. The fruits of their labors are clear in the Company's operating and financial results. Marquee would also like to thank all of our shareholders for their continued support.

Annual General Meeting of Shareholders

The Company's Annual General Meeting of Shareholders is scheduled for 2:00 PM on Wednesday May 25, 2016 in the Altius Building, Second Floor, 500 4th Avenue SW, Calgary, AB.


Marquee Energy Ltd. is a Calgary based, junior energy company focused on high rate of return oil development and production. Marquee is committed to growing the company through exploitation of existing opportunities and continued consolidation within its core area at Michichi. The Company's shares are traded on the Toronto Stock Exchange under the trading symbol "MQL" and on the OTCQX marketplace under the symbol "MQLXF". An updated presentation and additional information about Marquee may be found on its website and in its continuous disclosure documents filed with Canadian securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at


Certain statements included or incorporated by reference in this news release may constitute forward-looking statements under applicable securities legislation. Such forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release may include, but are not limited to: reserves and resources estimates and the net present value of the future net reserves related thereto; the number and quality of future potential drilling and development opportunities; anticipated capital budgets and expenditures; the development plan, including the anticipated time and costs, for the Company's contingent resources and the petroleum and natural gas sales; the size and extent of the Michichi oil fairway.

Such forward-looking statements or information are based on a number of assumptions all or any of which may prove to be incorrect. In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment, services and supplies in a timely manner to carry out its activities; the ability of the Company to market crude oil, natural gas liquids and natural gas successfully to current and new customers; the ability to secure adequate product transportation; the timely receipt of required regulatory approvals; the ability of the Company to obtain financing on acceptable terms; interest rates; regulatory framework regarding taxes, royalties and environmental matters; future crude oil, natural gas liquids and natural gas prices; the ability to successfully integrate acquisitions into Marquee's business and management's expectations relating to the timing and results of development activities.

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking information. Material risk factors affecting the Company and its business are contained in Marquee's Annual Information Form, which is available under Marquee's issuer profile on SEDAR at

The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.


This press release discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and probable locations are derived from the Company's most recent independent reserves report prepared by Sproule as at December 31, 2015 and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal estimates based on the Company's prospective acreage and assumptions as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves. Of the 300 (net) Michichi drilling locations identified herein, 57 are proved locations, 25 are probable locations, and the remaining 218 are unbooked locations. Unbooked locations have been identified by management as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves or production. The drilling locations on which the Company will actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves or production.


This press release contains the term "operating netbacks prior to hedging" and "operating netbacks" which do not have standardized meanings prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures by other companies. Marquee uses operating netbacks to analyze operating performance. Marquee believes this benchmark is a key measure of profitability and overall sustainability for the Company and this term is commonly used in the oil and natural gas industry. Operating netbacks are not intended to represent operating profits, net earnings or other measures of financial performance calculated in accordance with IFRS.

Operating netbacks prior to hedging are calculated by subtracting royalties, production, and operating and transportation expenses from revenues before other income/losses. Operating netbacks include realized hedging gain (loss).

This press release also contains the term "funds flow from operations" which should not be considered an alternative to, or more meaningful than "cash flow from operating activities", as determined in accordance with IFRS, as an indicator of the Company's performance. Therefore reference to funds flow from operations or funds flow from operations per share may not be comparable with the calculation of similar measures for other entities. Management uses funds flow from operations to analyze operating performance and leverage and considers funds flow from operations to be a key measure as it demonstrates the Company's ability to generate cash necessary to fund future capital investments and to repay debt. Funds flow from operations per share is calculated using the weighted average number of shares for the period.

In addition, the press release contains the term "net debt". Net debt is calculated as net debt, defined as current assets less current liabilities (excluding fair value of commodity contracts and flow-through share premiums). Management considers net debt as an important additional measure to monitor debt repayment requirements and track the financial viability of the Company.


Boes are presented on the basis of one boe for six Mcf of natural gas. Disclosure provided herein in respect of boe 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 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

This press release contains disclosure in respect of F&D costs and FD&A costs, which are considered oil and gas metrics within the meaning of NI 51-101. F&D costs are calculated as the sum of development capital plus the change in future development capital for the period divided by the reserves additions for the period. FD&A costs are calculated as the sum of development capital plus the change in future development capital and acquisition costs for the period divided by the reserves. Management uses F&D costs as a measure to assess the performance of the Company's resources required to locate and extract new hydrocarbon reservoirs. 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. FD&A and F&D costs used by Marquee may not be comparable to similar measures used by other issuers.

Neither the 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.

Contact Information:

Richard Thompson
President & Chief Executive Officer
(403) 817-5561
or visit the Company's website at