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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| TSXV:NS | 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
Northern Spirit Resources Inc. ("Northern Spirit" or the "Company") (TSX
VENTURE:NS) is pleased to announce the results of its independent reserve
evaluation for the year ended December 31, 2013 as prepared by Deloitte LLP
("Deloitte"). The Company's annual audit of its financial statements is not yet
complete and accordingly all financial amounts referred to in this press release
are estimates and are subject to revision. Complete reserves disclosure will be
included in Northern Spirit's annual filings as required under National
Instrument 51-101 - Standard of Disclosure for Oil and Gas Activities ("NI
51-101") of the Canadian Securities Administrators, which is expected to be
filed in late February 2014.
Highlights
-- Northern Spirit's proved plus probable reserves (Company interest) as
evaluated by Deloitte as at December 31, 2013 increased 9.2% to 3,816.9
Mboe from 3,494.3 Mboe at December 31, 2012. The Company's proved
reserves (Company interest) as at December 31, 2013 increased 25.9% to
1,642.5 Mboe from 1,304.4 Mboe.
-- The net present value of Northern Spirit's estimated future net revenue
before income taxes from proved plus probable reserves as at December
31, 2013 and utilizing Deloitte's December 31, 2013 price forecast and
discounted at 10%, is $68.1 million and the net present value of total
proved reserves as at December 31, 2013 is $31.8 million.
-- Reserve replacement was 843% on proved reserves and 989% on proved plus
probable reserves.
-- Total future development capital for Northern Spirit's proved plus
probable reserves at December 31, 2013 is $26.9 million scheduled over
two years. Total future development capital for Northern Spirit's total
proved reserves at December 31, 2013 is $13.5 million scheduled over two
years.
-- Northern Spirit's proved plus probable (10% discount rate) net asset
value per share as at December 31, 2013 is calculated at $0.21 per share
(basic) including an internal land value of $2.7 million and $0.20 per
share (basic) excluding land value.
CORPORATE RESERVES
The reserves data set forth below is based upon an independent reserve
assessment and evaluation prepared by Deloitte with an effective date of
December 31, 2013 (the "Deloitte Report"). The following presentation summarizes
the Company's crude oil, natural gas liquids and natural gas reserves and the
net present values before income taxes of future net revenue for the Company's
reserves using forecast prices and costs based on the Deloitte Report. The
Deloitte Report has been prepared in accordance with the standards contained in
the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and the
reserve definitions contained in NI 51-101.
All evaluations and reviews of future net cash flows 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. It should not be assumed that the estimates of future net
revenues presented in the tables below and in the "Highlights" section above
represent the fair market value of the reserves. There is no assurance that the
forecast prices and cost assumptions will be attained and variances from these
assumptions could be material. The recovery and reserve estimates of our crude
oil, natural gas liquids and natural gas reserves provided herein are estimates
only and there is no guarantee that the estimated reserves will be recovered.
Actual crude oil, natural gas and natural gas liquids reserves may be greater
than or less than the estimates provided herein.
Reserves Summary
The Company's total proved plus probable reserves increased by 9.2% in fiscal
2013 to 3,816.9 Mboe. Proved reserves increased by 25.9% to 1,642.5 Mboe and
comprised 45.1% of the Company's total proved plus probable reserves. Proved
undeveloped reserves are 67.5% of the total proved reserves. The future capital
in the Deloitte Report (undiscounted) is $26.9 million for the proved and
probable reserves and is $13.4 million for total proved reserves. The future
capital is programmed over a two year time period for proved plus probable
reserves and two year time period for proved reserves.
The following table provides summary reserve information based upon the Deloitte
Report and using the published Deloitte (December 31, 2013) price forecast.
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Light and Medium Natural Gas
Oil Heavy Oil Liquids
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Company Company Company
Interest Interest Interest
(1) Net (2) (1) Net(2) (1) Net (2)
(Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
Proved
Proved producing 273.9 237.0 3.9 3.7 7.3 4.9
Non-producing 37.5 34.9 8.3 7.9 8.9 6.0
Undeveloped 686.0 560.2 408.8 366.7 35.8 23.5
-----------------------------------------------------
Total proved 997.5 827.3 421.0 378.3 55.1 36.8
Probable 1,634.0 1,325.8 392.7 336.8 47.2 34.6
-----------------------------------------------------
Total proved & probable
(4) 2,640.5 2,153.1 813.7 715.1 102.3 71.4
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Total Barrels of Oil
Natural Gas Equivalent (3)
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Company Company
Interest (1) Net (2) Interest (1) Net (2)
(Mmcf) (Mmcf) (Mboe) (Mboe)
Proved
Proved producing 351.3 313.2 343.7 297.8
Non-producing 1,140.5 1,017.4 244.8 218.3
Undeveloped 907.5 726.9 1,281.8 1,071.6
----------------------------------------------
Total proved 2,773.0 2,399.0 1,935.7 1,642.5
Probable 3,165.1 2,865.3 2,610.6 2,174.4
----------------------------------------------
Total proved & probable (4) 5,938.1 5,264.3 4,546.3 3,816.9
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Notes:
1. "Company Interest" reserves means Northern Spirit's working interest
(operating and non-operating) share before deduction of royalties and
including any royalty interest of the Company.
2. "Net" reserves means Northern Spirit's working interest (operated and
non-operated) share after deduction of royalty obligations, plus
Northern Spirit's royalty interest in reserves.
3. Barrels of oil equivalent amounts have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel
of oil. BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one barrel
of oil is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency
at the wellhead. Given 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 mcf: 1 bbl, utilizing a conversion ratio of 6
mcf: 1 bbl may be a misleading indication of value.
4. May not add due to rounding.
Reserves Values
The estimated before tax net present value of future net revenues associated
with Northern Spirit's reserves effective December 31, 2013 and based on the
published Deloitte (December 31, 2013) future price forecast are summarized in
the following table:
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Discounted at
----------------------------------------------------------------------------
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Undiscounted 5% 10% 15% 20%
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(M$)
Proved
Proved producing 11,427.5 8,586.6 7,119.3 6,210.3 5,577.2
Non-producing 3,502.3 2,860.3 2,388.3 2,030.8 1,753.1
Undeveloped 36,521.1 27,749.7 22,098.0 18,127.4 15,173.2
------------------------------------------------
Total proved 51,932.9 39,520.9 31,829.6 26,526.1 22,615.7
Probable 91,186.8 52,784.8 36,253.0 27,044.9 20,850.8
------------------------------------------------
Total proved plus
probable(3) 143,119.7 92,305.7 68,082.6 53,571.0 43,766.5
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Notes:
1. The estimated future net revenues are stated before deducting future
estimated site restoration costs and are reduced for estimated future
abandonment costs and estimated capital for future development
associated with the reserves.
2. The net present value of future revenues does not represent fair market
value.
3. May not add due to rounding.
The following table sets forth development costs deducted in the estimation of
the future net revenue attributable to the reserve categories noted above.
Forecast Prices and Costs
--------------------------------------------------
Proved Plus Probable
Proved Reserves Reserves
--------------------------------------------------
Year (M$) (M$)
----------------------------------------------------------------------------
2014 13,205.8 26,398.2
2015 245.3 500.3
2016 - -
2017 - -
2018 - -
Remainder - -
--------------------------------------------------
Total Undiscounted (all
years) 13,451.1 26,898.2
--------------------------------------------------
Total discounted 10% 12,667.1 25,389.0
--------------------------------------------------
--------------------------------------------------
Price Forecast
The Deloitte December 31, 2013 price forecast is summarized as follows:
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$US/$Cdn Edmonton Hardisty
Exchange WTI @ City gate Bow River Heavy 12 Natural Gas
Year Rate Cushing crude 25 API API at AECO-C
----------------------------------------------------------------------------
(US$/bbl) (C$/bbl) ($Cdn/bbl) (C$/bbl) (C$/MMbtu)
2014 0.94 95.00 95.75 80.00 68.75 3.45
2015 0.94 91.80 92.30 76.30 66.30 3.70
2016 0.94 91.55 95.20 77.35 68.20 3.85
2017 0.94 91.25 94.80 76.80 68.80 4.05
2018 0.94 92.00 95.60 75.65 68.60 4.30
2019 0.94 93.85 97.50 76.50 70.50 4.60
2020 0.94 95.70 99.45 78.45 72.45 5.00
2021 0.94 97.65 101.45 79.45 73.45 5.45
2022 0.94 99.60 103.45 81.45 75.45 5.85
2023 0.94 101.60 105.55 83.55 77.55 6.20
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Note:
1. Inflation is accounted for at 2.0% per year
Net Asset Value
The following table provides a calculation of Northern Spirit's estimated net
asset value and net asset value per share as at December 31, 2013 based on the
estimated future net revenues associated with Northern Spirit's proved plus
probable reserves discounted at 10% as presented in the Deloitte Report.
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Forecast Prices and Costs before tax ($ millions)
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Proved plus probable reserves - discounted at 10% 68.0
Undeveloped land (1) 2.7
Working capital as at December 31, 2013 (2)(3) 2.0
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Net asset value 72.7
Common shares outstanding at December 31, 2013 (thousands) -
Basic 343,276
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Net asset value per share - basic 0.21
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Net asset value per share - basic (excluding land value) 0.20
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Notes:
1. Internally estimated value.
2. Fiscal 2013 figures include information based on estimated unaudited
financial results that may change on the completion of the audited
financial statements.
3. Working capital includes an estimate of the Company's cash, cash
equivalents, accounts receivable less accounts payable and accrued
liabilities as at December 31, 2013.
About Northern Spirit Resources Inc.
Northern Spirit Resources Inc. is a public oil and gas company active in the
exploration and development of oil and natural gas in East Central, Alberta.
This press release shall not constitute an offer to sell or a solicitation of an
offer to buy the securities in any jurisdiction. The common shares of Northern
Spirit will not be and have not been registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold in the United
States, or to a U.S. person, absent registration or applicable exemption
therefrom.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
Cautionary Statements
Unaudited financial information
Certain financial and operating information included in this press release for
the year ended December 31, 2013, such as finding and development costs,
production information, and net asset value, are based on estimated unaudited
financial results for the quarter and year then ended, and are subject to the
same limitations as discussed under the heading "Special Note Regarding
Forward-Looking Information" set out below. These estimated amounts may change
upon the completion of audited financial statements for the year ended December
31, 2013 and changes could be material.
Special Note Regarding Forward-Looking Information
Certain information regarding Northern Spirit set forth in this document,
including estimates of the quantities of the Company's reserves, expected
operating activities in the East Central, Alberta and those matters set forth
under the heading "Outlook", may constitute forward-looking statements under
applicable securities laws and necessarily involve substantial known and unknown
risks and uncertainties. These forward-looking statements are subject to
numerous risks and uncertainties, certain of which are beyond Northern Spirit's
control, including without limitation, risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices, environmental
risks, inability to obtain drilling rigs or other services, capital expenditure
costs, including drilling, completion and facility costs, unexpected decline
rates in wells, wells not performing as expected, delays resulting from or
inability to obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources, the impact of general
economic conditions in Canada, the United States and overseas, industry
conditions, changes in laws and regulations (including the adoption of new
environmental laws and regulations) and changes in how they are interpreted and
enforced, increased competition, the lack of availability of qualified personnel
or management, fluctuations in foreign exchange or interest rates, and the
uncertainty of estimates and projections of production, costs and expenses. The
recovery and reserve estimates of Northern Spirit's reserves provided herein are
estimates only and there is no guarantee that the estimated reserves will be
recovered.
With respect to forward-looking statements contained in this document, Northern
Spirit has made a number of assumptions. The key assumptions underlying the
aforementioned forward-looking statements include assumptions regarding (among
other things): the impact of increasing competition; the general stability of
the economic and political environment in which the Company operates; the timely
receipt of any required regulatory approvals; the ability of the Company to
obtain qualified staff, equipment and services in a timely and cost efficient
manner; drilling results; the ability of the operator of the projects which the
Company has an interest in operating the field in a safe, efficient and
effective manner; the ability of the Company to obtain financing on acceptable
terms; field production rates and decline rates; the ability to replace and
expand oil and natural gas reserves through acquisition, development of
exploration; the timing and costs of pipeline, storage and facility construction
and expansion and the ability of the Company to secure adequate product
transportation; future commodity prices; currency, exchange and interest rates;
the regulatory framework regarding royalties, taxes and environmental matters in
the jurisdictions in which the Company operates; and the ability of the Company
to successfully market its oil and natural gas production. Certain or all of the
forgoing assumptions may prove to be untrue.
Northern Spirit's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these forward-looking
statements and, accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any
of them do so, what benefits, including the amount of proceeds, that the Company
will derive therefrom. All subsequent forward-looking statements, whether
written or oral, attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these cautionary statements. Additional
information on these and other factors that could affect Northern Spirit'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) or Northern Spirit's website (www.northernspiritres.com).
The forward-looking statements contained in this document are made as at the
date of this news release and Northern Spirit 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.
BOE Equivalency
Barrel of oil equivalents or BOEs 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. Given 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 mcf: 1 bbl, utilizing a conversion
ratio of 6 mcf: 1 bbl may be a misleading indication of value.
Internal Estimates
Certain information contained herein, such as the estimated fair value of the
Company's land holdings, are based on estimated values the Company believes to
be reasonable and are subject to the same limitations as discussed under
"Special Note Regarding Forward-Looking Information" above.
Oil and Gas Advisory
The reserves information contained in this press release has been prepared in
accordance with NI 51-101. Complete NI 51- 101 reserves disclosure will be
included in Northern Spirit's annual filings as required under NI 51-101, which
is expected to be filed in February 2014. Listed below are cautionary statements
applicable to our reserves information that are specifically required by NI
51-101:
-- Individual properties may not reflect the same confidence level as
estimates of reserves for all properties due to the effects of
aggregation.
-- With respect to finding and development costs, the aggregate of the
exploration and development costs incurred in the most recent financial
year and the change during that year in estimated future development
costs generally will not reflect total finding and development costs
related to reserve additions for that year.
-- This press release contains estimates of the net present value of our
future net revenue from our reserves. Such amounts do not represent the
fair market value of our reserves.
-- Reserves included herein are stated on a company interest basis (before
royalty burdens and including royalty interests) unless noted otherwise
as well as on a gross and net basis as defined in NI 51-101. "Company
interest" is not a term defined by NI 51-101 and as such the estimates
of Company interest reserves herein may not be comparable to estimates
of "gross" reserves prepared in accordance with NI 51-101 or to other
issuers' estimates of company interest reserves.
Selected Definitions
The following terms used in this press release have the meanings set forth below:
"AECO" refers to a natural gas storage facility located at Suffield, Alberta
"API" means American Petroleum Institute
"bbl" means barrel
"boe" means barrel of oil equivalent of natural gas and crude oil on the
basis of 1 boe for six thousand cubic feet of natural gas (this conversion
factor is and industry accepted norm and is not based on either energy
content or current prices)
"Mbbl" means thousand barrels
"Mboe" means 1,000 barrels of oil equivalent
"Mcf" means one thousand cubic feet
"Mmcf" means one million cubic feet
"MMbtu" means million British Thermal Units
"$M" means thousands of dollars
FOR FURTHER INFORMATION PLEASE CONTACT:
Northern Spirit Resources Inc.
Kevin R. Baker Q.C.
President & Chief Executive Officer
(403) 476-7010
(403) 269-1715 (FAX)
Northern Spirit Resources Inc.
John H. Cassels
Vice President Finance, Chief Financial Officer & Secretary
(403) 476-7008
(403) 269-1715 (FAX)
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