SkyWest Energy Corp Significantly Increases Year End Reserves and Net Asset Value
16 Marzo 2011 - 6:11PM
Marketwired Canada
SkyWest Energy Corp ("SkyWest" or the "Company") (TSX VENTURE:SKW) is pleased to
provide our 2010 year end reserves. The following results highlight the success
of our 2010 capital program and exceptional growth of the Company.
Highlights:
-- Increased proved plus probable reserves to 10.96 MMboe (52 percent oil
and NGL's) and proved reserves to 4.81 MMboe (56 percent oil and NGL's).
-- The net present value ("NPV") of SkyWest's year end 2010 total proved
plus probable reserves, at 10% discounted value before tax, is $126
million.
-- SkyWest estimated net asset value is $0.62 per basic share using
(PVBT10) values on proved plus probable reserves.
-- Maintained a long reserve life index of 15.0 years based on our 2010
exit production rate of 2,000 boe/d.
-- Developed an internally estimated undrilled oil weighted net Cardium
horizontal inventory of approximately 130 wells, of which
approximately100 net Cardium horizontal locations (77 percent) remain
unbooked.
-- Finding, development and acquisition costs, including future development
capital, of $16.61 per boe on proved plus probable reserve additions and
$26.32 per boe on total proved reserve additions.
-- Excluding changes in future development costsof $96.3 million, finding,
development and acquisition costs would be $7.88 per boe and $17.73 per
boe, respectively.
-- Finding and development costs, including future development capital, of
$26.10 per boe on proved plus probable reserve additionsand $31.42 per
boe on total proved reserve additions.
-- Excluding changes in future development costs of $96.3 million, finding
and development costs were $6.76 per boe and $13.95 per boe,
respectively.
The Company's reserves were independently evaluated by Sproule Associates Ltd.
("Sproule") as at December 31, 2010. The forecasts of product prices used in
this evaluation were based on Sproule's December 31, 2010 price forecasts as
detailed below:
Summary of Selected Price Forecasts
(Effective December 31, 2010)
----------------------------------------------------------------------------
Edmonton Par
WTI Cushing Price 40 Alberta AECO-
Oklahoma degrees API C Spot Henry Hub
Forecast Year ($US/bbl) ($Cdn/bbl) ($Cdn/MMBtu) ($US/MMBtu)
----------------------------------------------------------------------------
2011 88.40 93.08 4.04 4.44
2012 89.14 93.85 4.66 5.01
2013 88.77 93.43 4.99 5.32
2014 88.88 93.54 6.58 6.80
2015 90.22 94.95 6.69 6.90
2016 91.57 96.38 6.80 7.00
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WTI Cushing Oklahoma for 40 degrees API, 0.4% Sulphur
Summary of Company Gross Reserves (Forecast Pricing)(1)
----------------------------------------------------------------------------
As at December
As at December 31, 2010(2) 31, 2009(3)(4)
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Oil Gas NGL Total Total
(Mbbls) (MMscf) (Mbbls) (Mboe) (Mboe)
----------------------------------------------------------------------------
Proved Producing 733.1 4,887.6 115.5 1,663.3 -
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Proved Non-
Producing 207.9 1,323.7 49.4 477.9 34.4
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Proved Undeveloped 1,332.9 6,622.0 230.9 2,667.5 -
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Total Proved 2,273.9 12,833.3 395.8 4,808.6 34.4
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Probable 2,490.8 18,478.6 583.9 6,154.5 34.5
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Total Proved Plus
Probable 4,764.8 31,311.9 979.7 10,963.1 68.9
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Summary of Before Tax Net Present Values (Forecast Pricing) ($M)(5)
----------------------------------------------------------------------------
As at
December 31,
As at December 31, 2010(2) 2009 (3)(4)
----------------------------------------------------------------------------
0% 5% 10% 10%
----------------------------------------------------------------------------
Proved producing 58,110 44,954 37,486 -
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Proved non-producing 18,120 13,562 11,142 777
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Proved Undeveloped 78,042 47,142 30,903 -
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Total proved 154,272 105,659 79,531 777
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Probable 216,064 90,990 46,703 718
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Total proved plus
probable 370,335 196,649 126,233 1,495
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Notes:
1. Gross Company reserves are the Company's total interest share before the
deduction of any royalties and without including any royalty interest of
the Company.
2. Based on Sproule's December 31, 2009 escalated price forecast.
3. Based on Paddock Lindstrom & Associates Ltd. December31, 2009 escalated
price forecast.
4. SkyWest is the resulting entity following the amalgamation of SkyWest
and EMM Energy Inc. on June21, 2010. In accordance with GAAP, SkyWest
was deemed to be the acquirer of EMM and therefore, the December 31,
2009 reserves information set forth above and elsewhere in this press
release reflects SkyWest's reserves as at December 31, 2009.
5. The net present values of future net revenue do not represent fair
market value.
6. Calculation of finding and development costs is based on estimates of
capital spent in the field during the year ended December 31, 2010 and
is unaudited and therefore subject to change.
Information Regarding SkyWest
SkyWest Energy Corp. is a Cardium focused public oil and gas exploration and
Development Company, located in Calgary, Alberta with operations in Alberta.
SkyWest currently trades on the TSX Venture Exchange (TSXV) under the Symbol
"SKW".
Statements herein that are not historical facts may be considered forward
looking statements including management's assessment of future plans and
operations, growth expectations within the Corporation, expected initial
production rates from certain new wells, timing of completion of wells and of
production additions, expected size of various plays, construction or expansion
of facilities and the timing thereof and expected costs and the effects thereof,
drilling plans and the effects thereof. These forward-looking statements
sometimes include words to the effect that management believes or expects a
stated condition or result. All estimates and statements that describe the
Corporation's objectives, goals or future plans are forward-looking statements.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties including, without
limitation, oil and gas exploration, development, exploitation, production,
marketing and transportation, loss of markets, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, failure to realize the anticipated benefits of acquisitions, delays
resulting from or inability to obtain required regulatory approvals and ability
to access sufficient capital from internal and external sources. As a
consequence, SkyWest's actual results may differ materially from those expressed
in, or implied by, the forward-looking statements.
Forward-looking statements or information are based on a number of factors and
assumptions which have been used to develop such statements and information but
which may prove to be incorrect. Although SkyWest believes that the expectations
reflected in such forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking statements because
SkyWest can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in this
document, assumptions have been made regarding, among other things: the impact
of increasing competition; the ability of SkyWest to obtain equipment and
services in a timely and cost efficient manner; drilling results; the ability of
the operator of the projects which SkyWest has an interest in to operate the
field in a safe, efficient and effective manner; field production rates and
decline rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development or exploration; the timing and costs of
pipeline, storage and facility construction and expansion; future oil and
natural gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, taxes and environmental matters in the
jurisdictions in which SkyWest operates; and the ability of SkyWest to
successfully market its oil and natural gas products.
Readers are cautioned that the foregoing list of factors and assumptions is not
exhaustive. Additional information on these and other factors that could affect
SkyWest's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking statements contained
in this news release are made as at the date of this news release and SkyWest
does not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities
laws.
BOEs
Disclosure provided herein in respect of barrels of oil equivalent (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.
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