Frontera Announces 2022 Year End Reserves
2022 2P Gross Reserves Of 175 Million Boe,
2022 2P Gross RRI Of 77%, 3-Year Average RRI of 108%
2P Net Present Value Before Tax Discounted At 10% Of $3.7 Billion, Up 22% YOY
Increased Gross PDP Reserves Replacement Ratio To 150%
Grew CPE-6 2P Net Reserves To 41 Mmboe,
Passing Quifa For Most Net Reserves By Field In The Company
Increased Gross Gas And Natural Gas Liquids Reserves 11% To 21 Mmboe,
Diversifying Future Production Mix
Investing $170-$200 Million In 2023 On Exploration, Reloading Reserves Hopper For Future Growth
CALGARY, AB, Feb. 22, 2023 /CNW/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company") today announced the results of its annual independent reserves assessment conducted by DeGolyer and MacNaughton CORP ("D&M"). All dollar amounts in this news release and the Company's financial disclosures are in United States dollars, unless otherwise noted. All of the Company's booked reserves for the year ended December 31, 2022 are located in Colombia and Ecuador.
Orlando Cabrales, Chief Executive Officer, commented:
"I am pleased with Frontera's 2022 reserves results. We increased average daily production by over 9% to 41,370 Boe/d compared to 2021 while delivering 2P gross reserves of 175 mmboe with a NPV before taxes of $3.7 billion, an increase of 22% year over year. Importantly, we grew CPE-6 2P net reserves to 41 mmboe, while increasing annual average production to approximately 5,000 boe/d, demonstrating our success in increasing reserves from less developed fields and passing Quifa for the most reserves by block in the Company. We also increased gross gas and liquids reserves by 11% year-over-year to 21 mmboe, supporting our efforts to further diversify our future production mix. Over the last three years Frontera has averaged 16.6 mmboe gross 2P reserves additions, achieved 108% reserves replacement ratio and a 11.6 year reserve life index. Looking ahead, the Company will invest $170-$200 million in 2023 on its exciting lower risk and near field exploration portfolio in Colombia and Ecuador and high-impact Guyana exploration program, reloading the Company's reserves hopper for future growth."
For the year ended December 31, 2022 Frontera:
- Added 11.6 MMboe of 2P gross reserves, for total Company 2P gross reserves of 174.8 MMboe consisting of 64% heavy crude oil, 23% light and medium crude oil, 8% conventional natural gas and 4% natural gas liquids, compared to 178.3 MMboe at December 31, 2021.
- Added 3.8 MMboe of 3P gross reserves, for a total of 218.5 MMboe at December 31, 2022, compared to 229.8 MMboe at December 31, 2021.
- The Company's three-year average gross 1P Reserves Replacement Ratio is 95% including 52% in 2022, 175% in 2021 and 57% in 2020. The Company's three-year average gross 2P Reserves Replacement Ratio is 108% including 77% in 2022, 131% in 2021 and 116% in 2020.
- Delivered a 1P gross reserves life index of 7.4 years compared to 8.7 years at December 31, 2021, and a 2P reserves life index of 11.6 years compared to 13 years at December 31, 2021.
- The Net Present Value ("NPV") for the net 2P reserves, discounted at 10% before tax, is $3.7 billion at December 31, 2022, compared to $3 billion at December 31, 2021. The increase in NPV for the 2P reserves is primarily due to an increase in the forecast oil price used to calculate the NPV. See the Net Present Value After Tax summary table below for more information.
- Frontera's 2022 year-end gross 2P reserves of 174.8 mmboe include additions of 4.8 mmboe by technical revisions mainly in CPE-6 and VIM-1 blocks, extensions of 4 mmboe mainly from CPE-6 block, 2.4 mmboe from the Company's acquisition of the remaining 35% working interest ("W.I.") in Colombia's El Dificil block held by PCR Investments S.A. (a wholly-owned subsidiary of Petroquímica Comodoro Rivadavia S.A. ("PCR")), and 0.8 mmboe from exploration activities at Perico and Espejo blocks in Ecuador, offset by production of 15.1 mmboe and 1.1 mmboe in La Creciente block currently closed due to low production volumes and economics. See the reconciliation table below for more information.
2023 Exploration Activities
In 2023, Frontera intends to invest $170-$200 million on its Colombia, Ecuador, and Guyana exploration programs, reloading its reserves hopper for future growth.
Colombia and Ecuador: In 2023, the Company anticipates spending $50-$60 million on various exploration activities in Colombia and Ecuador including drilling the Chimi-1 well (spud on February 16, 2023), Winner-1 and Tubara South-1 exploration wells in VIM-22 block in Colombia and the Yin Sur-1 well in Ecuador; complete civil works on the VIM-1 block at the Hydra well location; carry out initial seismic activities at VIM-46 block; complete an 80-kilometre seismic acquisition program and begin civil works at the Sol Nor-1 and Sol Nor-2 locations at the LLA-119 block; and complete an 164-kilometre seismic acquisition program and Environmental Impact Assessment at LLA-99.
Guyana: On the Corentyne block, offshore Guyana, Frontera anticipates spending approximately $120-$140 million on the Wei-1 well. The Wei-1 well is located approximately 14 kilometres northwest of the Joint Venture's previous Kawa-1 light oil and condensate discovery and will target Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. The Wei-1 well will appraise both the Kawa-1 discovery as well as explore additional opportunities within the Corentyne block.
For the year ended December 31, 2022, the Company's reserves were evaluated by D&M, in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter) (the "COGE Handbook"), National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and CSA Staff Notice 51-324, and are based on the Reserves Report (as defined below).
2022 Year-End D&M Certified Gross Reserves Volumes(1)
Reserves Category |
December |
December 31, MBoe (2) |
Percentage Change |
Proved Developed Producing (PDP) |
39,287 |
31,778 |
24 % |
Proved Developed Non-Producing (PDNP) |
9,951 |
10,461 |
(5) % |
Proved Undeveloped (PUD) |
61,774 |
76,045 |
(19) % |
Total Proved (1P) |
111,013 |
118,284 |
(6) % |
Probable |
63,752 |
59,957 |
6 % |
Total Proved Plus Probable (2P) |
174,765 |
178,241 |
(2) % |
Possible (3) |
43,770 |
51,559 |
(15) % |
Total Proved Plus Probable Plus Possible (3P) |
218,535 |
229,799 |
(5) % |
(1) Gross reserves represent Frontera's W.I. before royalties. |
(2) See "Boe Conversion" section in the "Advisories", at the end of this press release. |
(3) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% |
2022 Year-End D&M Certified Net Reserves Volumes(1)
Reserves Category
|
December 31, Mboe (2) |
December 31, Mboe (2) |
Percentage Change |
Proved Developed Producing (PDP) |
34,625 |
29,640 |
17 % |
Proved Developed Non-Producing (PDNP) |
8,712 |
9,483 |
(8) % |
Proved Undeveloped (PUD) |
55,222 |
70,224 |
(21) % |
Total Proved (1P) |
98,559 |
109,346 |
(10) % |
Probable |
58,274 |
57,670 |
1 % |
Total Proved Plus Probable (2P) |
156,833 |
167,016 |
(6) % |
Possible (3) |
39,459 |
50,055 |
(21) % |
Total Proved Plus Probable Plus Possible (3P) |
196,293 |
217,071 |
(10) % |
(1) Net reserves represent Frontera's W.I. after royalties. |
(2) See "Boe Conversion" section in the "Advisories", at the end of this press release. |
(3) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability |
The following tables provide a summary of the Company's oil and natural gas reserves based on forecast prices and costs effective December 31, 2022, as applied in the Reserves Report. The Company's net reserves after royalties at December 31, 2022, incorporate all applicable royalties under Colombia and Ecuador fiscal legislations based on forecast pricing and production rates evaluated in the Reserves Report, including any additional participation interest related to the price of oil applicable to certain Colombian and Ecuadorian blocks, as at year-end 2022.
2022 Year-End D&M Certified Reserves Volumes by Product Type and Country(6)
Reserves at December 31, 2022 (MMboe) (1)(5) |
||||||||
Country |
Field |
Proved (1P) |
Probable |
Proved plus |
Hydrocarbon Type |
|||
Gross |
Net |
Gross |
Net |
Gross |
Net |
|||
Colombia |
Quifa SW field |
42.4 |
35.0 |
6.5 |
5.3 |
48.9 |
40.3 |
Heavy crude oil |
CPE-6 block |
21.9 |
21.9 |
19.2 |
19.2 |
41.1 |
41.1 |
Heavy crude oil |
|
Other heavy oil blocks (2) |
14.0 |
12.3 |
7.9 |
7.3 |
21.8 |
19.6 |
Heavy crude oil |
|
Light/medium oil blocks (3) |
20.7 |
17.3 |
20.1 |
16.5 |
40.8 |
33.8 |
Light and medium crude oil |
|
Natural gas blocks (4) |
8.8 |
8.8 |
5.0 |
5.0 |
13.8 |
13.8 |
Conventional natural gas |
|
Natural gas blocks (4) |
3.0 |
3.0 |
4.5 |
4.5 |
7.5 |
7.5 |
Natural gas liquids |
|
Sub-Total |
110.7 |
98.3 |
63.1 |
57.8 |
173.8 |
156.0 |
||
Ecuador |
Light/medium oil blocks (5) |
0.3 |
0.2 |
0.6 |
0.5 |
0.9 |
0.7 |
Light and medium crude oil |
Heavy oil blocks(5) |
0.1 |
0.0 |
0.0 |
0.0 |
0.1 |
0.0 |
Heavy crude oil |
|
Sub-Total |
0.4 |
0.3 |
0.6 |
0.5 |
1.0 |
0.8 |
||
Total Dec. 31, 2022 |
111.0 |
98.6 |
63.8 |
58.3 |
174.8 |
156.8 |
||
Total Dec. 31, 2021 |
118.3 |
109.3 |
60.0 |
57.7 |
178.2 |
167.0 |
||
Difference |
(7.3) |
(10.8) |
3.8 |
0.6 |
(3.5) |
(10.2) |
||
2022 Production(7) |
15.1 |
12.9 |
Total |
11.6 |
2.7 |
|||
(1) See "Boe Conversion" section in the "Advisories", at the end of this press release. |
(2) Includes Cajua and Jaspe fields in the Quifa block and the Sabanero block. |
(3) Includes the Cubiro, Cravoviejo, Canaguaro, Guatiquia, Casimena, Corcel, Neiva, Cachicamo and other producing blocks. |
(4) Includes the VIM-1 and El Difícil blocks. |
(5) Includes the Espejo and Perico blocks, which are currently in early evaluation period to better quantify resources. |
(6) Gross refers to Frontera's W.I. before royalties. Net refers to Frontera's W.I. after royalties. |
(7) Gross production distribution: light & medium crude oil 6.2 mmboe, heavy crude oil 7.9 mmboe, conventional natural gas 0.6 |
(8) All of the Company's booked reserves are located in Colombia and Ecuador. |
2022 2P Reserves Reconciliation
Oil Equivalent |
|
December 31, 2021 |
178.2 |
Discoveries(3) |
0.8 |
Extensions & Improved Recovery(4) |
4.0 |
Technical Revisions(5) |
4.8 |
Acquisitions(6) |
2.4 |
Dispositions(7) |
(1.1) |
Economic Factors |
0.7 |
Production(8) |
(15.1) |
December 31, 2022 |
174.8 |
(1) See "Boe Conversion" section in the "Advisories", at the end of this press release. |
(2) Gross refers to Frontera's W.I. before royalties. Net refers to Frontera's W.I. after royalties. |
(3) Includes discovery of the Tui and Pashuri fields (in the Perico and Espejo blocks in Ecuador). |
(4) Mainly associated to extensions in the Hamaca field (in the CPE-6 block in Colombia). |
(5) Includes technical revisions mainly in the Hamaca field (in the CPE-6 block) and the La Belleza field (in the VIM-1 block) |
(6) Acquisition of 35% working interest in El Difícil field. |
(7) Associated with La Creciente block which is currently closed due to low production volumes and economics. |
(8) Production represents the Company's production for the twelve-month period ended December 31, 2022 for assets with associated |
Five Year Crude Oil Price Forecast - D&M Reserves Reports (1)
(US$/bbl) |
2023 |
2024 |
2025 |
2026 |
2027 |
Brent Oil Price Forecast 2021 |
71.46 |
69.62 |
71.01 |
72.44 |
73.88 |
Brent Oil Price Forecast 2022 |
84.67 |
82.69 |
81.03 |
81.39 |
82.65 |
(1) The Reserves Report and the Company's December 31, 2021 reserves report (the "2021 Reserves Report") used the average Brent |
Gross Reserve Life Index ("RLI")(1)
(US$/bbl) |
December 31, 2021(2) |
December 31, 2022(3) |
Total Proved (1P) |
8.7 years |
7.4 years |
Total Proved Plus Probable (2P) |
13.0 years |
11.6 years |
Total Proved Plus Probable Plus Possible (3P) |
16.8 years |
14.5 years |
(1) RLI does not have a standardized meaning and may not be comparable to similar measures presented by other companies, and |
(2) Calculated by dividing the total relevant net reserves category by the 2021 production of 13.7 MMboe. |
(3) Calculated by dividing the total relevant net reserves category by the 2022 production of 15.1 MMboe. |
Net Present Value of Future Net Revenue Before Tax Summary - D&M Reserves Report (2022 Brent Forecast)(1)
Reserves Category |
December 31, |
December 31, |
December 31, |
$ (000's), except per share data |
NPV10 ($ 000's)(2) |
NPV10 ($ 000's)(3) |
NPV10 (C$/share)(4) |
Proved Developed Producing (PDP) |
773,686 |
1,118,382 |
17.70 |
Proved Developed Non-Producing (PDNP) |
235,503 |
288,281 |
4.56 |
Proved Undeveloped |
1,100,986 |
1,029,911 |
16.30 |
Total Proved (1P) |
2,110,176 |
2,436,575 |
38.57 |
Probable |
926,177 |
1,277,388 |
20.22 |
Total Proved Plus Probable (2P) |
3,036,353 |
3,713,962 |
58.79 |
Possible (5) |
894,668 |
1,064,195 |
16.85 |
Total Proved Plus Probable Plus Possible (3P) |
3,931,021 |
4,778,157 |
75.64 |
(1) See "Advisories" at the end of this press release. The Reserves Report used the average Brent projected price of three major |
(2) Includes future development costs ("FDC") as at December 31, 2021, of $792 million for 1P and $1,269 million for 2P. |
(3) Includes FDC as at December 31, 2022, of $945 million for 1P and $1,541 million for 2P. |
(4) Calculated by dividing the December 31, 2022 NPV10 value by 85,592,075 shares outstanding as at December 31, 2022 and a |
(5) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent |
Net Present Value of Future Net Revenue After Tax Summary - D&M Reserves Report (2022 Brent Forecast)(1)(2)
Reserves Category |
December 31, |
December 31, |
December 31, 2022 |
$ (000's), except per share data |
NPV10 ($ 000's)(3) |
NPV10 ($ 000's)(4) |
NPV10 (C$/share)(5) |
Proved Developed Producing (PDP) |
608,715 |
766,261 |
12.13 |
Proved Developed Non-Producing (PDNP) |
187,470 |
197,023 |
3.12 |
Proved Undeveloped |
862,350 |
699,663 |
11.08 |
Total Proved (1P) |
1,658,535 |
1,662,947 |
26.32 |
Probable |
589,523 |
753,966 |
11.94 |
Total Proved Plus Probable (2P) |
2,248,058 |
2,416,913 |
38.26 |
Possible (6) |
570,597 |
660,271 |
10.45 |
Total Proved Plus Probable Plus Possible (3P) |
2,818,655 |
3,077,184 |
48.71 |
(1) See "Advisories" at the end of this press release. The Reserves Report used the average Brent projected price of three major |
(2) The tax calculations used in the preparation of the Reserves Report are done at the field level in accordance with standard practice, |
(3) Includes FDC as at December 31, 2021, of $792 million for 1P and $1,269 million for 2P. |
(4) Includes FDC as at December 31, 2022, of $945 million for 1P and $1,541 million for 2P. |
(5) Calculated by dividing the December 31, 2022 NPV10 value by 85,592,075 shares outstanding as at December 31, 2022 and a |
(6) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent |
Future Development Costs (FDC) - Based on Forecast Prices and Costs(1)
Colombia ($ 000's) |
Total Proved (1P) |
Total Proved Plus Probable (2P) |
2023 |
147,757 |
181,951 |
2024 |
174,636 |
254,771 |
2025 |
178,302 |
260,127 |
2026 |
171,409 |
287,429 |
2027 |
150,668 |
250,514 |
Beyond 2027 |
117,661 |
301,463 |
Total undiscounted |
940,433 |
1,532,897 |
(1) Does not include $8.009 million in FDC from Ecuador. |
The Company's 2022 year-end estimated reserves were evaluated by D&M in their report dated February 15, 2023, with an effective date of December 31, 2022 (the "Reserves Report"), in accordance with the definitions, standards and procedures contained in the COGE Handbook , NI 51-101 and CSA Staff Notice 51-324. D&M is an independent qualified reserves evaluator as defined in NI 51-101.
Additional reserves information as required under NI 51-101 will be included in the Company's statement of reserves data and other oil and gas information on Form 51-101F1, which is expected to be filed on SEDAR on March 1, 2023. See "Advisory Note Regarding Oil and Gas Information" section in the "Advisories", at the end of this news release.
Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 32 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.
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Cautionary Note Concerning Forward-Looking Information
This news release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to activities, events or developments that the Company believes, expects or anticipates will or may occur in the future. Forward-looking information in this news release includes, without limitation, statements regarding the Company's statement of reserves data and other oil and gas information on Form 51-101F1, which is expected to be filed on SEDAR on March 1, 2023, information relating to reserves and resources, including reserves estimates, the size of and future net revenues from the Company's oil and natural gas reserves, reserve life index, reserve replacement ratio, projections of market prices, and future development costs; statements relating to the Company's expectations regarding the Company's operational and financial progress throughout the year; the Company's guidance for 2023 (including capital expenditures); and the Company's exploration activities and objectives, including with respect to drilling plans, seismic activities, civil works and environmental impact assessments.. All information other than historical fact is forward-looking information.
Forward-looking information reflects the current expectations, assumptions and beliefs of the Company based on information currently available to it and considers the Company's experience and its perception of historical trends, including expectations and assumptions relating to commodity prices and interest and foreign exchange rates; the outlook for general economic trends and industry trends; the current and potential adverse impacts of the COVID-19 pandemic, including the status of the pandemic and future waves and any associated policies around current business restrictions; reserves estimates; the integrity and reliability of the Company's assets; the performance of assets and equipment; the sufficiency of budgeted capital expenditures in carrying out planned activities; the Company's ability to generate sufficient cash flow from operations and access to credit facilities and capital markets and the costs of raising capital; the availability and cost of labour, services and infrastructure; the development and execution of projects; and the governmental, regulatory and legal environment.
Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be placed on such information. Forward-looking information is subject to a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to the Company. The actual results of the Company may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: volatility in market prices for oil and natural gas; the duration and spread of the COVID-19 pandemic and its severity, the success of the Company's program to manage COVID-19; the Russia-Ukraine conflict; uncertainties associated with estimating and establishing oil and natural gas reserves and resources; liabilities inherent with the exploration, development, exploitation and reclamation of oil and natural gas; uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; increases or changes to transportation costs; expectations regarding the Company's ability to raise capital and to continually add reserves through acquisition and development; the Company's ability to access additional financing; the ability of the Company to maintain its credit ratings; the ability of the Company to: meet its financial obligations and minimum commitments, fund capital expenditures and comply with covenants contained in the agreements that govern indebtedness; political developments in the countries where the Company operates; the uncertainties involved in interpreting drilling results and other geological data; geological, technical, drilling and processing problems; timing on receipt of government approvals; fluctuations in foreign exchange or interest rates; and stock market volatility. The Company's annual information form dated March 2, 2022, its annual management's discussion and analysis for the year ended December 31, 2021, and other documents it files from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available without charge by referring to the company's profile on SEDAR at www.sedar.com. All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
Certain information included in this news release may constitute future oriented financial information and financial outlook information (collectively, "FOFI") within the meaning of applicable Canadian securities laws. The FOFI has been prepared by management to provide an outlook of the Company's activities and results and may not be appropriate for other purposes. Management believes that the FOFI has been prepared on a reasonable basis, reflecting management's reasonable estimates and judgments; however, actual results of the Company's operations and the resulting financial outcome may vary from the amounts set forth herein. Any FOFI speaks only as of the date on which it was made, and the Company disclaims any intent or obligation to update any FOFI, whether as a result of new information, future events or otherwise, unless required by applicable laws.
Non-Standardized Measures
This news release includes non-standardized measures, including reserves life index and reserves replacement ratio. Reserves life index is calculated as the net reserves in the referenced category divided by the net production of the last year. It is a measure of how long the booked reserves will last if the production rate is maintained and no additional reserves are added. Reserves replacement ratio is calculated as the net reserves added in the referenced category divided by the net production of the last year. It is a measure of the capacity to replace the production. These measures should not be construed as alternative measures of financial performance. Such measures have been included to provide readers with additional means to evaluate the Company's performance, but these non-standardized measures are not reliable indicators of the Company's future performance and therefore must not be relied upon unduly. The Company's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Readers are cautioned that the information provided or derived by these measures should not be relied upon for investment purposes.
Advisory Note Regarding Oil and Gas Information
The reserves information contained in this press release has been prepared in accordance with NI 51-101, but only presents a portion of the disclosure required thereunder. Complete reserves disclosure required in accordance with NI 51-101 will be available on SEDAR at www.sedar.com on or around March 1, 2023. Actual oil and natural gas reserves and future production may be greater than or less than the estimates provided in this news release. There is no assurance that forecast prices and costs assumed in the Reserves Report, and presented in this news release, will be attained and variances from such forecast prices and costs could be material. The estimated future net revenue from the production of the disclosed oil and natural gas reserves in this news release does not represent the fair market value of these reserves.
The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.
There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. 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 oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, 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 prepared by different engineers, or by the same engineers at different times, may vary.
The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. All evaluations and reviews of future net revenue are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. The tax calculations used in the preparation of the Reserves Report are done at the field level in accordance with standard practice, and do not reflect the actual tax position at the corporate level which may be significantly different.
Boe Conversion
The term "boe" is used in this news release. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of cubic feet to barrels 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 this news release, boe has been expressed using the Colombian conversion standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of Mines and Energy. In addition, as the value ratio between oil and natural gas based on current market values is significantly different from the energy equivalency of 5.7:1, utilizing a conversion of 5.7:1 may be misleading as an indication of value.
Definitions: |
|
1P |
Proved reserves |
2P |
Proved plus probable reserves |
3P |
Proved plus probable plus Possible reserves |
bbl(s) |
Barrel(s) of oil |
boe |
Refer to "Boe Conversion" disclosure above |
boe/d |
Barrel of oil equivalent per day |
Gross Production |
Refers to means working interest (operating or non-operating) share before deduction of |
Mboe |
Thousand barrels of oil equivalent |
MMboe |
Million barrels of oil equivalent |
Mcf |
Thousand cubic feet |
Net Production |
Refers to working interest (operating or non-operating) share after deduction of royalty |
W.I. |
Working interest |
- "Proved Developed Producing Reserves" are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been in production, and the date of resumption of production must be known with reasonable certainty.
- "Proved Developed Non-Producing Reserves" are those reserves that either have not been on production or have previously been on production but are shut-in and the date of resumption of production is unknown.
- "Proved Undeveloped Reserves" are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g. when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.
- "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
- "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
- "Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.
SOURCE Frontera Energy Corporation
please contact Brent Anderson, Director, Investor Relations, at 1 403 705 8827, [email protected], www.fronteraenergy.ca
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