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."
2022 Reserves Report Key
Points:
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.
About The Reserves
Evaluation
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
31, 2022 Mboe(2)
|
December 31,
2021
MBoe
(2)
|
Percentage
Change
2022 versus 2021
|
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%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible
reserves.
|
|
2022 Year-End D&M Certified Net Reserves
Volumes(1)
Reserves
Category
|
December 31,
2022
Mboe
(2)
|
December 31,
2021
Mboe
(2)
|
Percentage
Change
2022 versus 2021
|
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
that the quantities actually recovered will equal or exceed the sum
of proved plus probable plus possible reserves.
|
|
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
Probable (2P)
|
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
Reserves
Incorporated
|
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
mmboe, natural gas liquids 0.3 mmboe
|
(8) All
of the Company's booked reserves are located in Colombia and
Ecuador.
|
|
2022 2P Reserves Reconciliation
|
Oil Equivalent
Gross 2P
Reserves
(MMboe) (1)(2)
|
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)
in Colombia.
|
(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
reserves. Production associated with exploration and evaluation
assets are included in production volumes for financial
reporting
purposes.
|
|
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
projected price of three major international independent auditors:
GLJ Ltd. ("GLJ"), McDaniel and Associates Consultants
Ltd.
("McDaniel") and Sproule Associates Ltd. ("Sproule").
The 2021 price forecast reflects prices used in the Company's 2021
Reserves
Report and the 2022 price forecast reflects prices used in the
Reserves Report.
|
|
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
therefore should not be used to make such comparisons.
|
(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,
2021
|
December 31,
2022
|
December 31,
2022
|
$ (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
international independent auditors: GLJ, McDaniel and
Sproule. The full January 1, 2022 price forecast will be
included in the Reserves
Report. The January 1, 2021 price forecast is included in the 2021
Reserves Report.
|
(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
USD:CAD foreign exchange rate of 1.3549. Per share valuations do
not attribute any value to the Company's material ownership in
midstream and infrastructure assets as well as any equity value for
its ownership in CGX Energy Inc. (TSXV:OYL)
("CGX").
|
(5) 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.
|
|
Net Present Value of Future Net Revenue After Tax Summary -
D&M Reserves Report (2022 Brent
Forecast)(1)(2)
Reserves
Category
|
December 31,
2021
|
December 31,
2022
|
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
international independent auditors: GLJ, McDaniel and Sproule. The
full January 1, 2022 price forecast will be included in the
Reserves
Report. The January 1, 2021 price forecast is included in the
2021 Reserves Report.
|
(2) 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.
|
(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 $1,541
million for 2P.
|
(5)
Calculated by dividing the December 31, 2022 NPV10 value by
85,592,075 shares outstanding as at December 31, 2022 and a
USD:CAD foreign exchange rate of 1.3549. Per share valuations do
not attribute any value to the Company's material ownership in
midstream and infrastructure assets as well as any equity value for
its ownership in CGX .
|
(6) Possible
reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10 percent
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible
reserves.
|
|
Future Development Costs (FDC) - Based on Forecast Prices and
Costs(1)
Colombia ($
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.
|
|
About Frontera's 2022 Year-End
Estimated Reserves
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.
About Frontera
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.
If you would like to receive News Releases via email as soon as
they are published, please subscribe here:
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Corporate Presentation
See Frontera's corporate
presentations at:
https://www.fronteraenergy.ca/reports-presentations/
Social Media
Follow Frontera Energy social media channels at the following
links:
Twitter: https://twitter.com/fronteraenergy?lang=en
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LinkedIn: https://co.linkedin.com/company/frontera-energy-corp.
Advisories:
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
royalties and without including any royalty interests of the
Company
|
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
obligations, plus the Company's royalty interests in production or
reserves
|
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.
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content:https://www.prnewswire.com/news-releases/frontera-announces-2022-year-end-reserves-301753909.html
SOURCE Frontera Energy Corporation