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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Nuloch Resources | TSXV:NLR | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
Hot Features
Premium
Monetary amounts are in Canadian dollars unless otherwise indicated.
NuLoch Resources Inc. (TSX VENTURE:NLR) (OTCQX:NULCF) (NuLoch or the Company)
retained AJM Petroleum Consultants (AJM) to conduct the evaluation of the
Company's petroleum and natural gas reserves effective as at December 31, 2010.
AJM's report, dated February 15, 2011 was compiled pursuant to the guidelines of
National Instrument 51-101 and The Statement of Reserve Data and Other Oil and
Gas Information has been filed on www.sedar.ca.
Reserves Highlights
- Reserve value increased by 3.8 times to $152 million P+P BT PV10 (Proved and
probable, before taxes, discounted at 10%);
- Total company working interest reserves exceed 10,000,000 boe;
- Light and medium oil is 81% of total reserves (boe basis); and
- 43% of oil reserves are in Canada and 57% are in North Dakota
Estimates of reserves of petroleum and natural gas and associated future net
revenues as at December 31, 2010 are presented below.
Company Gross Future
Reserves(1)(2) Net Revenue(1)(3)
----------------------------------------------------------------------------
Light & Nat-
Medium Heavy ural ($ millions)
Oil Oil Gas NGL Total Discount Rate
Reserves Category Mbbl Mbbl MMcf Mbbl Mboe 0% 10% 15%
----------------------------------------------------------
CANADA
----------------------------------------------------------------------------
Proved
Developed
Producing 775 8 2,575 2 1,214 49 29 25
Developed Non-
producing 260 - 429 2 334 19 9 7
Undeveloped 1,217 - 4,085 - 1,898 68 20 11
----------------------------------------------------------
Total Proved 2,252 8 7,089 4 3,446 136 58 43
Probable 1,258 6 4,033 2 1,938 134 29 18
----------------------------------------------------------
Total Proved and
Probable 3,510 14 11,122 6 5,384 270 88 61
----------------------------------------------------------
----------------------------------------------------------
UNITED STATES
----------------------------------------------------------------------------
Proved
Developed
Producing 370 - 35 - 375 18 11 9
Developed Non-
producing 189 - - - 189 10 6 5
Undeveloped 2,282 - - - 2,282 78 21 11
----------------------------------------------------------
Total Proved 2,841 - 35 - 2,847 106 38 25
Probable 1,767 - 27 - 1,772 122 26 15
----------------------------------------------------------
Total Proved and
Probable 4,609 - 62 - 4,619 228 64 40
----------------------------------------------------------
----------------------------------------------------------
TOTAL
Proved
Developed
Producing 1,145 8 2,610 2 1,589 67 40 34
Developed Non-
producing 449 - 429 2 523 29 15 12
Undeveloped 3,499 - 4,085 - 4,181 146 42 22
----------------------------------------------------------
Total Proved 5,094 8 7,124 4 6,293 242 97 68
Probable 3,025 6 4,060 2 3,710 256 55 34
----------------------------------------------------------
Total Proved and
Probable 8,119 14 11,184 6 10,003 497 152 101
----------------------------------------------------------
----------------------------------------------------------
(1) Columns and rows may not add due to rounding
(2) Six mcf of natural gas is considered equivalent to 1 barrel of oil.
(see Advisories)
(3) Future net revenues do not represent fair market value
The following tables summarize the changes in the Company's working interest
reserves since December 31, 2009 based on forecast prices and costs.
Summary Analysis of Changes in Reserves (Company Working Interest)(1)
----------------------------------------------------------------------------
($ millions)
(Mboe) Future Net
------------------------------ Revenue
Before Tax
Proved Probable Total 10% DCF
--------------------------------------------
December 31, 2009 2,226 1,229 3,455 $ 40
Extensions 4,392 2,465 6,857
Technical revisions 14 7 21
Economic factors (24) 4 (20)
Acquisitions 17 9 26
Dispositions (7) (3) (10)
Production (325) - (325)
--------------------------------------------
December 31, 2010 6,293 3,710 10,003 $ 152
--------------------------------------------
--------------------------------------------
(1) Columns and rows may not add due to rounding
2010 Capital Expenditures
NuLoch invested approximately $58 million in its 2010 capital program with 44%
directed to North Dakota activities and 52% to Saskatchewan. The remaining 4%
went to Alberta and other capital purposes. Eighty percent of the budget was
allocated to drilling, completing and equipping oil wells.
Wells Drilled in 2010
----------------------------------------------------------------------------
Natural
Oil gas Pending Dry Total
--------------------------------------------------
Gross 26 - 18 3 47
Net 6.2 - 4.4 1.3 11.9
The following table summarizes well drilling operations in 2010.
Spud Completed Standing Drilling
in 2010 in 2010 12/31/10 12/31/10
----------------------------------------------------------------------------
North Dakota Gross 36 22 11 4
Net 3.5 2.0 1.3 0.4
Saskatchewan Gross 11 9 2 1
Net 8.4 6.4 2.0 0.7
----------------------------------------------------------------------------
Total Gross 47 31 13 5
Net 11.9 8.4 3.3 1.1
Future Development Costs
The following table sets forth the future development costs which have been
deducted in determining future net revenue attributable to the reserves
categories noted below.
Forecast Prices and Costs
($ millions)
----------------------------------------
Canada United States
----------------------------------------
Proved Proved
and and
Year Proved Probable Proved Probable
----------------------------------------------------------------------------
2011 31 33 29 34
2012 7 9 21 26
2013 - - 1 3
2014 8 8 - -
Remaining - - - -
----------------------------------------------------------------------------
Total (undiscounted) 46 51 51 63
----------------------------------------
----------------------------------------
Virtually all of the 2011 and 2012 expenditures are forecast to be undertaken in
the Williston Basin of Saskatchewan and North Dakota.
Future prices used in the forecast of net revenue are based on those estimated
by AJM as at December 31, 2010. The first five years of forecast prices for
certain benchmarks are summarized below:
Five-Year Forecast of Future Prices
----------------------------------------------------------------------------
Oil Oil Natural gas
WTI Edmonton AECO average
Year ($US/bbl) ($CDN/bbl) ($CDN/Mcf)
----------------------------------------------------------------------------
2011 85.00 82.80 4.10
2012 89.25 88.80 4.60
2013 91.55 94.05 5.20
2014 95.50 98.15 5.50
2015 102.85 105.80 5.75
Operations Update
Recent notable results in North Dakota have been obtained from the Three
Forks Sanish formation in the following 2-mile (1280 acre) wells:
Well Name WI% Comments
----------------------------------------------------------------------------
Almos 1-12-162-99 10.0% Average 536 bopd over first 15 days
Hansen 6-7-162-99 10.0% Average 356 bopd over first 18 days
Hansen 18-19-162-99 10.0% Average 367 bopd over first 15 days
In particular, the Almos Farms well achieved a one-day rate in excess of 1,000
boe/d during its initial flowback period.
During 2010, NuLoch participated in the drilling of 47 wells (11.9 net) in the
Williston Basin of Saskatchewan and North Dakota. The pace of well completions
was slowed during the fourth quarter as harsh weather and service shortages
affected operations. At year end, 13 of those wells (3.3 net) were awaiting
completion. The Company was working through the completion inventory during
January and five of the wells (2.3 net) were fracture stimulated. Six rigs are
currently operational drilling 1.5 net wells.
NuLoch's horizontal long-lateral wells are fracture stimulated in up to 30
stages with up to 75 tons of sand per stage. Wells typically flow for a few
weeks or months and are then shut-in, cleaned out with coiled tubing or a
service rig and ultimately equipped for production. Corporate daily production
rates fluctuate with these completion activities. Current productive capability
is 1,550 boe/d (87% crude oil) from producing and completed wells. Additionally,
630 bopd (IP30 basis, net to NuLoch's working interest) is behind pipe in wells
standing cased or currently drilling.
At Tableland, Saskatchewan, we are constructing a centralized processing and
water disposal facility with first oil shipments planned for early March.
Initially five oil wells will be gathered to this facility. Inlet capacity will
be approximately 3,000 barrels of fluid per day that will allow for expansion of
the gathering system to accommodate the 2011 drilling program. It is anticipated
that, once completed, this facility will improve well up-time, reduce operating
costs through elimination of trucking and third party water disposal, and lower
capital costs my minimizing the use of single-well batteries.
Recent NuLoch North Dakota Completions - Gross Well Production and Rates
(bopd)(1)(2)
Cumulative
Zone IP30 IP60 Current bbls oil
Well Name (3) DSU WI% IP Date bopd bopd bopd (4)
----------------------------------------------------------------------------
Goldal 16-10-161-98 TFS 640 10.0% 2009-08 334 282 65 53,174
Moe 9-162-98 TFS 640 10.0% 2009-09 188 152 40 30,190
Vassen 27-163-99 TFS 640 10.0% 2009-11 453 396 165 78,935
Fuhrman 36-162-99 TFS 640 10.0% 2009-12 106 108 31 16,518
Torgeson 3-30 -163-99 TFS 1280 0.6% 2010-01 312 304 176 76,889
Torgeson 14-19-163-99 TFS 1280 1.2% 2010-01 394 459 214 84,343
Sparks 8-162-98-2 TFS 640 10.0% 2010-02 447 348 104 41,022
Jacobsen 15-161-98 TFS 640 10.0% 2010-04 168 148 40 23,049
Ness 29-32-163-98 TFS 1280 10.0% 2010-05 413 399 169 62,781
Enerson 4-29-163-99 TFS 1280 4.5% 2010-05 175 177 111 38,204
Meyers 2-162-99 TFS 640 10.0% 2010-04 306 247 135 34,657
Radenic 14-20-163-99 TFS 1280 0.6% 2010-06 416 478 211 65,050
Hansen 13-162-99 TFS 640 10.0% 2010-06 228 167 116 25,882
Hall 3-161-98 TFS 640 10.0% 2010-06 246 261 116 32,435
Antonson 1-12-163-95 BK 1280 10.0% 2010-08 120 121 130 18,528
Sorenson 14-162-99 TFS 640 10.0% 2010-08 144 129 101 14,141
Lindsey 4-161-98 TFS 640 10.0% 2010-09 92 94 61 8,436
Grundstad 5-162-99H TFS 640 10.0% 2010-10 190 - 212 6,075
Gustafson 29-32-161-99 BK 1280 18.8% 2010-10 471 - 327 23,270
Larson 3-162-99H TFS 640 10.0% 2010-11 287 - 200 14,115
Hansen 17-20-163-98 TFS 1280 10.0% 2010-11 188 - 160 8,625
Hauganoe 15-162-99H TFS 640 10.0% 2010-11 145 3,413
Haugland 4-162-99 TFS 640 10.0% 2010-12 240 3,705
Aarestad 4-34-160-97 BK 1280 1.0% On Flowback
Impala 23-14-163-98 TFS 1280 16.0% Rig Released
Almos 1-12-162-99 TFS 1280 10.0% 2010-12 Shut in 13,885
Hansen 18-19-162-99 TFS 1280 10.0% 2011-01 350 2,645
Eagle 22-15-163-95 BK 1280 21.6% Rig Released
Aarestad 4-27-160-97 BK 1280 2.7% On Flowback
Haugland 9-162-99 TFS 640 10.0% 2010-12 Shut in 3,345
Nova 4-9-163-98H TFS 1280 10.0% 2011-01
Malibu 26-35-163-98H TFS 1280 16.0% Rig Released
Woodpeckr 27-34-163-95 TFS 1280 16.0% Rig Released
Hansen 6-7-162-99 TFS 1280 10.0% 2011-01 320 2,891
Larson 8-162-99H TFS 640 7.0% Rig Released
Peters 11-1-160-93 BK 1280 9.3% Rig Released
Dahl 13-24-162-100 TFS 1280 9.4% Rig Released
Barracuda 27-34-163-98 TFS 1280 10.0% Rig Released
Denali 13-24-163-98 TFS 1280 10.0% Rig Released
Grundstad 10-162-99 TFS 640 10.0% Rig Released
Recent Saskatchewan Completions - Gross Well Production and Rates (bopd)
(1)(2)
Cumulative
Zone IP30 IP60 Current bbls oil
Well Name (3) DSU WI% IP Date bopd bopd bopd (4)
----------------------------------------------------------------------------
91/05-02-001-10W2 TFS 320 100% 2009-12 205 147 19 20,713
91/12-12-001-10W2 TFS 640 70% 2010-04 186 148 14 17,531
91/16-06-001-09W2 TFS 640 70% 2010-05 72 67 15 8,950
91/01-22-001-10W2 TFS 640 70% 2010-05 204 166 40 19,067
91/08-04-001-09W2 TFS 640 70% 2010-08 69 61 11 5,316
91/04-10-001-10W2 TFS 640 70% 2010-10 123 88 40 6,492
91/01-04-002-10W2 TFS 640 50% 2012-01 - - - -
91/01-06-001-10W2 TFS 640 100% 2010-12 125 629
92/05-16-001-10W2 TFS 640 100% 2011-01 188 1,257
91/16-02-001-10W2 TFS 320 100% 2011-02 101 -
91/01-11-001-10W2 TFS 320 70% RigReleased
(1) See Advisories - Initial Production (IP) Rates
(2) All rates are barrels of oil per day and do not include solution natural
gas
(3) TFS is the Three Forks Sanish formation and BK is the Bakken formation
(4) Cumulative to January 31, 2011
Financial Position
Production during the fourth quarter of 2010 averaged 917 boe/d (75% oil).
Approximately $5 million of NuLoch's 2010 capital expenditure budget was
deferred into 2011 due to delays in the field and the total that was invested in
2010 is now estimated at $58 million. The working capital deficiency at December
31, 2010 totalled $2.1 million net of $9.7 million in cash and cash equivalents.
NuLoch has a $25 million line of credit with a Canadian chartered bank that is
currently undrawn.
Corporate Transaction
On January 19, 2010 NuLoch announced that it entered into a definitive agreement
to be acquired by Magnum Hunter Resources Corporation (NYSE:MHR), a Houston,
Texas based oil and gas company focused on unconventional shale plays. Under the
terms of the agreement, each holder of common shares of NuLoch will receive
either: (i) 0.3304 of a share of common stock of Magnum Hunter or (ii) in
certain circumstances, 0.3304 of an exchangeable share of a Canadian subsidiary
of Magnum Hunter for each NuLoch share held. The transaction will be completed
pursuant to a statutory plan of arrangement pursuant to the Business
Corporations Act (Alberta). Complete details regarding the transaction are set
out in the arrangement agreement, which can be found on SEDAR (www.sedar.com).
ADVISORIES
Use of Barrels of Oil Equivalent (boe)
Disclosure provided herein in respect of boe units may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 mcf of natural
gas to 1 bbl of crude oil is based on an energy equivalency conversion method
primarily applicable at the burner tip and may not represent a value equivalency
at the wellhead.
Reserves Disclosure and Use of Estimates
Reserves information presented relates to NuLoch's working interest share of
reserves and present values as at December 31, 2010. The net present value of
future net revenue attributable to the Company's reserves is stated without
provision for interest costs and general and administrative costs, but after
providing for estimated royalties, production costs, development costs, other
income, future capital expenditures, and well abandonment costs for only those
wells assigned reserves by AJM. The estimates of reserves and future net revenue
for individual properties may not reflect the same confidence level as estimates
of reserves and future net revenue for all properties, due to effects of
aggregation. Actual recoveries may be greater than or less than the estimates
provided herein and there is no guarantee that the estimated reserves will be
recovered. It should not be assumed that the values of future net revenue
attributable to the Company's reserves represent the fair market value of those
reserves.
Forward-Looking Statements
Certain statements in this document or incorporated herein by reference
constitute "forward-looking statements". These forward-looking statements can
generally be identified as such because of the context of the statements,
including words indicating that the Company "believes", "anticipates",
"expects", "plans" or words of a similar nature. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions which will, among other things, impact demand for and market prices
of the Company's products; industry capacity; the ability of the Company to
implement its business strategy, including exploration and development
activities; the ability of the Company to complete its capital programs;
successful negotiations with bankers and other third parties; the success of
exploration and development activities; production levels; government
regulations and the expenditures required to comply with them (especially safety
and environmental laws and regulations); asset retirement obligations; and other
circumstances affecting revenues and expenses.
Class A common shares outstanding: 122,332,907
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