CALGARY, Alberta, June 07, 2018 (GLOBE NEWSWIRE) -- Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its crude oil and natural gas reserves information for the year ended March 31, 2018.

March 31, 2018 Highlights:

  • Produced 2,101 barrels of oil equivalent per day (“boe/d”), a 215 percent increase from 665 boe/d for the year ended March 31, 2017. 
  • Increased total proved and total proved plus probable oil reserves by 19 percent and 20 percent, respectively, from a successful optimization and well workover program, the acquisition of a 50% working interest in the Windfall property and an improved future development program at the Company’s Wilson Creek property. 
  • Total proved and total proved plus probable reserve before tax value discounted at ten percent increased 13 percent and 19 percent, respectively.
  • Total proved plus probable natural gas reserves increased by 4 percent. Total proved natural gas reserves were negatively impacted by 23 percent because of the current forecast natural gas prices resulting in the shifting of reserves at the Company’s Northville property from the proved undeveloped reserve category to the probable reserve category.
  • Total proved producing reserves remained flat at approximately 5 million barrels of oil equivalent (“boe”) after having produced 766.8 thousand boe for the year ended March 31, 2018.

SUMMARY OF OIL AND NATURAL GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF MARCH 31, 2018
FORECAST PRICES AND COSTS

GLJ Petroleum Consultants Ltd. (“GLJ”), the Company’s independent petroleum engineering firm, has evaluated Clearview’s crude oil, natural gas and natural gas liquids reserves as at March 31, 2018 and prepared a reserves report (the “GLJ Report”) in accordance with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” and the “Canadian Oil and Gas Evaluation Handbook”. GLJ’s price forecast dated April 1, 2018 was used in the evaluation. Company gross reserves in the total proved and total proved plus probable categories decreased 14 percent and increased 6 percent, respectively, compared to March 31, 2017. The decrease in the total proved category was driven by the removal of gas weighted, proved undeveloped drilling locations at the Northville property. These reserves remain in the probable reserve category. This change in reserve booking category was driven primarily by the economics related to the current forecast natural gas prices. The increase in total proved plus probable reserve category was driven primarily by the Windfall property acquired January 4, 2018 (50% working interest).

The following is a summary of the Company’s gross reserves information detailed in the GLJ Report at March 31, 2018:

   
 RESERVES
 LIGHT AND
MEDIUM CRUDE
OIL

 CONVENTIONAL
NATURAL GAS
(1)
 NATURAL GAS
LIQUIDS

 OIL
EQUIVALENT(2)
BOE
RESERVES CATEGORYGross(3)
(Mbbls)
 Net(4)
(Mbbls)
 Gross
(MMcf)
 Net
(MMcf)
 Gross
(Mbbls)
 Net
(Mbbls)
 Gross
(Mboe)
 Net
(Mboe)
PROVED:               
Developed Producing1,224 1,220 16,862 16,671 1,026 1,018 5,061 5,016
Developed Non-Producing139 136 1,150 1,105 50 50 381 370
Undeveloped1,325 1,319 5,233 5,208 258 258 2,455 2,445
TOTAL PROVED2,689 2,675 23,244 22,984 1,334 1,325 7,897 7,831
PROBABLE1,371 1,365 27,981 27,823 1,662 1,655 7,697 7,657
TOTAL PROVED PLUS PROBABLE4,060 4,040 51,225 50,807 2,996 2,980 15,594 15,488
                


Notes:  
   
(1) Includes solution gas.
(2) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil (6:1).
(3) Company Gross Reserves are the Company’s working interest share of the remaining reserves plus royalty interest reserves, before deduction of any royalties.
(4) Company Net Reserves are the gross remaining reserves of the properties in which the Company has a working interest.
  Tables may not add due to rounding.
   

Net Present Value of Future Net Revenue

The estimated future net revenues associated with Clearview’s reserves at March 31, 2018, based on the GLJ April 1, 2018 price forecast, are summarized in the following table. The net present value of future net revenues, discounted at ten percent, from total proved and total proved plus probable reserves increased by 13 percent and 19 percent respectively, compared to March 31, 2017. The increase in net present value was driven mostly by the oil weighted Windfall property acquisition (50% working interest) and the Wilson Creek Cardium development program being modified to optimize the drilling of two-mile horizontal wells.

   
  NET PRESENT VALUES OF FUTURE NET REVENUE
BEFORE INCOME TAXES DISCOUNTED AT (%/year)
RESERVES CATEGORY 0%
($000s)
 5%
($000s)
 10%
($000s)
 15%
($000s)
 20%
($000s)
 Unit Value
$/boe (1)
PROVED:            
Developed Producing 67,365 54,227 44,984 38,381 33,513 8.99
Developed Non-Producing 6,290 4,860 3,860 3,144 2,616 10.43
Undeveloped 42,323 31,482 24,169 19,080 15,416 9.88
TOTAL PROVED 115,978 90,570 73,013 60,605 51,545 9.32
PROBABLE 105,055 68,350 47,112 34,019 25,433 6.15
TOTAL PROVED PLUS PROBABLE 221,033 158,919 120,125 94,624 76,978 7.76
             


Notes:  
   
(1) Unit values are before income tax discounted at 10% and based on net reserve values.
(2) Future net revenues are estimated using forecast prices, costs arising from the anticipated development and production of reserves, associated royalties, operating costs, development costs, and abandonment and reclamation costs. The estimated values disclosed do not necessarily represent fair market value.
   


 
TOTAL FUTURE NET REVENUE
(UNDISCOUNTED)
AS OF MARCH 31, 2018
FORECAST PRICES AND COSTS
 
RESERVES
CATEGORY
 REVENUE (1)
($MMs)
 ROYALTIES (2)
($MMs)
 OPERATING
COSTS

($MMs)
 FUTURE
DEVELOPMENT
COSTS (“FDC”)

($MMs)
 ABANDONMENT
AND
RECLAMATION
COSTS (3)

($MMs)
 FUTURE NET
REVENUE
BEFORE
INCOME TAXES

($MMs)
Total Proved 347 41 135 49 12 306
Total Proved plus Probable 632 69 241 93 16 563
             


Notes:  
   
(1) Includes all product revenues and other revenues as forecast.
(2) Royalties include Crown, freehold, overriding royalties, and freehold mineral taxes
   


 
SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS
FORECAST PRICES AND COSTS (1)
 
      WTI Edmonton
Light
 Bow River
Medium
 Ethane Butane Pentane AECO Spot
Year Inflation % USD/CAD USD/bbl CAD/bbl CAD/bbl CAD/bbl CAD/bbl CAD/bbl CAD/MMBtu
2018 Q2-Q4 0.0 0.7783 64.00 76.45 56.39 6.91 49.56 82.96 2.21
2019 2.0 0.7900 64.00 75.95 59.36 7.54 53.16 81.52 2.39
2020 2.0 0.8000 65.00 76.25 61.75 8.67 53.38 81.25 2.72
2021 2.0 0.8100 66.50 77.16 64.08 9.87 54.01 82.10 3.07
2022 2.0 0.8200 69.00 79.27 66.35 10.79 55.49 84.15 3.34
2023 2.0 0.8300 71.50 81.33 68.57 11.15 56.93 86.14 3.44
2024 2.0 0.8300 74.00 84.34 71.58 11.39 59.04 89.16 3.51
2025 2.0 0.8300 76.50 87.35 74.60 11.63 61.14 92.17 3.58
2026 2.0 0.8300 79.09 90.47 77.72 11.88 63.33 95.29 3.66
2027 2.0 0.8300 80.67 92.37 79.62 12.12 64.66 97.19 3.73
2028 2.0 0.8300 +2.0%/yr. +2.0%/yr. +2.0%/yr. +2.0%/yr. +2.0%/yr. +2.0%/yr. +2.0%/yr.
                   


Notes:  
   
(1) GLJ escalated price forecast as at April 1, 2018
(2) Inflation rate for costs.
(3) Exchange rate used to generate the benchmark reference prices in this table.
   


Reserves Reconciliation

The following reconciliation of Clearview’s reserves compares changes in the Company’s gross reserves at March 31, 2017 to the reserves at March 31, 2018, each evaluated in accordance with National Instrument 51-101 definitions.

     
Oil (Mbbls) Proved Producing
  Total Proved
  Total Proved + Probable 
March 31, 2017Opening Balance1,269.8  2,247.8  3,360.8 
 Acquisitions161.4  473.9  1,061.7 
 Technical Revisions(83.2) (0.9) (368.1)
 Infill31.2  113.8  145.0 
 Production(159.1) (159.1) (159.1)
March 31, 2018Closing Balance1,220.1  2,675.4  4,040.4 
          


     
Gas (MMcf) Proved Producing
  Total Proved
  Total Proved + Probable 
March 31, 2017Opening Balance16,661.3  30,010.7  48,628.9 
 Acquisitions794.7  2,672.8  6,184.7 
 Technical Revisions1,731.1  (7,326.2) (1,715.3)
 Infill96.6  239.6  321.1 
 Production(2,612.6) (2,612.6) (2,612.6)
March 31, 2018Closing Balance16,671.1  22,984.2  50,806.7 
          


     
NGL’s (Mbbls) Proved Producing
  Total Proved
  Total Proved + Probable 
March 31, 2017Opening Balance1,004.3  1,885.3  3,099.4 
 Acquisitions4.7  15.7  36.4 
 Technical Revisions176.6  (413.6) 3.3 
 Infill4.3  9.5  12.8 
 Production(172.2) (172.2) (172.2)
March 31, 2018Closing Balance1,017.6  1,324.7  2,979.6 
          


     
BOE’s (Mbbls) Proved Producing
  Total Proved
  Total Proved + Probable 
March 31, 2017Opening Balance5,050.9  9,134.9  14,565.0 
 Acquisitions298.5  935.1  2,128.9 
 Technical Revisions381.9  (1,635.6) (650.7)
 Infill51.6  163.1  211.3 
 Production(766.8) (766.8) (766.8)
March 31, 2018Closing Balance5,016.1  7,830.7  15,487.8 
          

Finding and Development Costs

For the year ended March 31, 2018, Clearview conducted various optimization and well workover projects on its properties. The Company also closed the purchase of a 50% working interest in the Windfall property. Finding and development costs for proved producing, total proved and proved plus probable reserves for 2018 are presented below.

    
Capital ($ thousands)(2)Proved Producing
  Total Proved
  Total Proved plus
Probable

 
Exploration and Development (“E&D”) costs2,999  2,999  2,999 
Change in FDC related to E&D(17) (8,865) 2,636 
Total E&D Costs2,982  (5,866) 5,635 
Acquisition and Disposition (“A&D”) costs3,376  3,376  3,376 
Change in FDC related to A&D-  5,505  12,295 
Total A&D Costs3,376  8,881  15,671 
Total Costs6,358  3,015  21,306 
Reserves (mboe)   
Total Reserve Discoveries, Extensions & Revisions (3)433.1  (1,472.5) (439.4)
Total Acquisitions and Dispositions298.5  935.1  2,128.9 
Total Reserve Additions731.6  (537.4) 1,689.5 
         
E&D, including change in FDC related to E&D ("F&D")$6.88/boe  $3.98/boe  ($12.82)/boe 
E&D and A&D, including change in FDC ("F,D&A")$8.69/boe  ($5.61)/boe  $12.61/boe 
         


Notes:  
   
(1) Tables may not add due to rounding
(2)  All the production and capital values in this table are unaudited
(3) Includes extensions and improved recovery, technical revisions, discoveries and economic factors
(4) F&D and F,D&A are oil and gas metrics, please see the advisory section of this press release.
   

The F,D&A for the total proved reserve category and the F&D for the total proved plus probable category is not meaningful as the reserve additions are negative. The total proved revision was driven primarily by the removal of gas weighted, proved undeveloped drilling locations at the Northville property. These reserves remain in the probable reserve category. This change in reserve booking is due to the economics related to the current forecast natural gas prices.

The Company’s proved producing reserve life index (“RLI”) is 7.1 years and the total proved RLI is 10.5 years. The total proved plus probable RLI is 18.3 years.

Information regarding Clearview is available on Sedar at www.sedar.com. For further information contact Tony Angelidis, President & CEO of Clearview at 587-393-8502 tony@clearviewres.com or Brian Kohlhammer, Vice President Finance & CFO at 587-393-8504 brian@clearviewres.com.

ADVISORIES

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company’s plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results, industry conditions, commodity prices and business opportunities. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. 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 reserves described can be profitably produced in the future.

The forward-looking information is based on certain key expectations and assumptions made by our management, including expectations and assumptions concerning prevailing commodity prices and differentials, exchange rates, interest rates as set out in the appendices to this press release, also applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition and the ability to market oil and natural gas successfully and our ability to access capital. Although Clearview believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Clearview can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Our actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Oil and Gas Advisories

The reserves information contained in this press release has been prepared in accordance with NI 51-101. Reserves information with in the press release is dated as of March 30, 2018 and was prepared by GLJ Petroleum Consultants.

Listed below are cautionary statements applicable to the reserves information that are specifically required by NI 51-101: (i) individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation; and (ii) this press release contains estimates of the net present value of the future net revenue from the reserves to be acquired - such amounts do not represent the fair market value of such reserves.

Boe means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe's 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. In addition, 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, using a conversion on a 6: 1 basis may be misleading as an indication of value.

This press release contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons.  Such metrics have been included in this document to provide readers with additional measures to evaluate our performance however, such measures are not reliable indicators of our future performance and future performance may not compare to our performance in previous periods and therefore such metrics should not be unduly relied upon. Specifically, this press release contains the following metrics:

  • Reserve Life Index – calculated as total company interest reserves divided by annual production for the year indicated.
  • Finding, Development and Acquisition Cost – are calculated as the sum of capital expenditures  plus the change in future development capital for the period divided by the change in reserves that are characterized as development for the period. Finding, development and acquisition costs incurred in the financial year and changes during that year in estimated future development costs generally will not reflect total finding, developing and acquisitions costs related to reserves additions for that year.