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Share Name | Share Symbol | Market | Type |
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Seaview Energy Inc. Class B | TSXV:CVU.B | TSX Venture | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS. Seaview Energy Inc. (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) ("Seaview" or the "Company") is pleased to provide an update on the Company's corporate developments. In the Company's first 10 months of operations, Seaview has enjoyed significant early success in executing its balanced strategy of acquiring, exploiting and exploring for high quality natural gas and light oil assets in Western Canada. Through a combination of four strategic acquisitions and early exploration success, management has established Seaview as an emerging high-growth, junior exploration and production company. The Company is pleased to report that with the acquisition of the light oil properties in Southeast Saskatchewan, which closed on June 26, 2008, the acquisition of C3 Resources Ltd., which closed on July 24, 2008, and the Company's ongoing successful drilling program, the reserves evaluation of Seaview's reserves, has increased materially relative to the year end December 31, 2007 results. The independent reserves evaluation was completed by Sproule and Associates Limited ("Spoule") with an effective date of June 30, 2008, in a National Instrument 51-101 ("NI 51-101") compliant report entitled "Evaluation of the P&NG Reserves of Seaview Energy Inc." - Total Proven reserves have increased by 899% (304% per share) since December 31, 2007 to 4,104 Mboe. - Total Proven plus Probable reserves increased by 710% (227% per share) during the same period to 5,733 Mboe. - Net asset value of $2.68 per Class A share of Seaview, using a before tax 10% discount rate increased 114% relative to December 31, 2007. RESERVES Seaview has a reserves committee comprised of independent board members, which reviews the qualifications and appointment of the independent reserve evaluators. The Committee also reviews the processes and technical data used to determine the reserves booked. The Company has filed its Annual Information Form which includes Seaview's reserves data and other oil and gas information for the year ended December 31, 2007 as mandated by National Instrument 51-101 Standards for Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. Subsequent to year end, the Company has successfully closed four acquisitions and completed a successful drilling program in the first half of 2008. As a result, the reserves and value of the Company have changed relative to year end and the following update is provided to account for the increases from year end 2007. The June 30, 2008, evaluation was prepared by Sproule utilizing the methodology and definitions as set NI 51-101. The reserves presented herein include the total Company's working interest reserves (Gross Reserves) before deduction of royalties and exclude royalty interest reserves as at June 30, 2008. The pricing sensitivity report used the following pricing, exchange rate and inflation rate assumptions as of June 30, 2008 in estimating Seaview's reserves data using forecast prices and costs. Table 1 NI 51-101 Summary of Oil and Gas Reserves as of June 30, 2008 Forecast Prices and Costs Gross Reserves Net Reserves ----------------------------- ------------------------------ Light Light and and Medium Natural Medium Natural Crude Heavy Gas Natural Crude Heavy Gas Natural Oil Crude Liquids Gas Oil Crude Liquids Gas ------- ----- ------- -------- ------ ----- ------- -------- Mbbls Mbbls Mbbls Mmcf Mbbls Mbbls Mbbls Mmcf ------- ----- ------- -------- ------ ----- ------- -------- Proved Developed 893.2 0 54.0 15,915 787.7 0 38.8 12,247 Producing Developed 151.7 0 1.2 1,142 140.6 0 0.8 915 Non-Producing Undeveloped 54.0 0 0.9 634 47.5 0 0.6 456 Total Proved 1,098.9 0 56.1 17,692 975.8 0 40.3 13,798 Probable 432.1 0 17.4 7,076 382.6 0 12.6 5,572 Total Proved plus Probable 1,531.0 0 73.5 24,768 1,358.4 0 52.8 19,370 Table 2 NI 51-101 Summary of Net Present Values of Future Net Revenue as of June 30, 2008 Forecast Prices and Costs Unit Value Before Income Tax Before Future Income Tax Expenses Discounted and Discounted at at --------------------------------------------- ----------- 0% 5% 10% 15% 20% 10%/year --------- -------- -------- -------- -------- ----------- (M$) (M$) (M$) (M$) (M$) ($/boe) --------- -------- -------- -------- -------- ----------- Proved Developed Producing 148,318 116,386 97,949 85,798 77,077 33.80 Developed Non-Producing 13,845 11,804 10,313 9,185 8,303 35.09 Undeveloped 6,919 5,841 5,056 4,462 3,997 40.74 Total Proved 169,082 134,031 113,318 94,445 89,377 34.18 Probable 66,614 42,192 30,936 24,507 20,355 23.37 Total Proved plus Probable 235,696 176,223 144,255 123,952 109,733 31.09 After Future Income Tax Expenses and Discounted at --------------------------------------------- 0% 5% 10% 15% 20% --------- -------- -------- -------- -------- (M$) (M$) (M$) (M$) (M$) --------- -------- -------- -------- -------- Proved Developed Producing 119,796 94,545 79,941 70,303 63,380 Developed Non-Producing 9,870 8,377 7,286 6,459 5,813 Undeveloped 5,019 4,196 3,598 3,147 2,796 Total Proved 134,685 107,118 90,825 79,910 71,989 Probable 48,902 30,775 22,413 17,634 14,550 Total Proved plus Probable 183,587 137,893 113,238 97,544 86,450 Table 3 NI 51-101 Total Future Net Revenue Undiscounted as of June 30, 2008 Forecast Prices and Costs Operating Development Revenue Royalties Costs Costs ----------------------------------------------------------- (M$) (M$) (M$) (M$) ----------------------------------------------------------- Total Proved 306,099 54,469 74,583 1,856 Reserves Total Proved 431,012 75,539 108,059 4,255 plus Probable Future Net Revenue Abandonment and Before Future Net Reclamation Income Income Revenue After Costs Taxes Taxes Income Taxes ----------------------------------------------------------- (M$) (M$) (M$) (M$) ----------------------------------------------------------- Total Proved 6,109 169,082 34,397 134,685 Reserves Total Proved 7,462 235,696 52,109 183,587 plus Probable Table 4 NI 51-101 Net Present Value of Future Net Revenue By Production Group as of June 30, 2008 Forecast Prices and Costs Future Net Revenue Before Unit Value Before Income Taxes Income Taxes and (Discounted (Discounted at at 10%/Year) 10%/Year) ----------------- ------------------- (M$) ($/boe) ----------------- ------------------- Proved Light and Medium Crude Oil 44,157 41.51 (including solution gas and associated by-products) Heavy Crude Oil 0 0 (including solution gas and associated by-products) Natural Gas 69,161 30.71 (including associated by products) Proved plus Probable Light and Medium Crude Oil 58,904 39.54 (including solution gas and associated by-products) Heavy Crude Oil 0 0 (including solution gas and associated by-products) Natural Gas 85,351 27.10 (including associated by products) Table 5 NI 51-101 Summary of Pricing and Inflation Rate Assumptions as at June 30, 2008 - Forecast Prices and Costs The Reserves Report used the following pricing, exchange rate and inflation rate assumptions as of June 30, 2008 in estimating Seaview's reserves data using forecast prices and costs. NATURAL CRUDE OIL GAS -------------------------------------------------- ------------- Edmonton Cromer WTI Par Price Medium Alberta Crude 40 Degrees API 29.3 Degrees API AECO Gas Year Oil Crude Oil Crude Oil Price ----- ---------- ---------------- ------------------ ------------- ($US/Bbl) ($Cdn/Bbl) ($Cdn/Bbl) ($Cdn/mmbtu) ---------- ---------------- ------------------ ------------- (1) (2) (3) ---------- ---------------- ------------------ Forecast 2008 132.01 130.59 114.92 11.87 2009 131.09 129.66 114.10 10.77 2010 129.78 128.32 112.92 9.63 2011 109.86 108.39 95.38 8.95 2012 92.01 90.51 79.65 8.69 Thereafter Various Escalation Rates NATURAL GAS LIQUIDS ------------------------------- Pentanes Butanes Plus FOB US/CAN FOB Field Field Exchange Year Gate Gate Inflation Rate ---------------------------------- ---------- ------------ ---------- ($Cdn/Bbl) ($Cdn/Bbl) (%) ($US/Cdn) ------------- ---------- ------------ ---------- Forecast 2008 133.75 102.20 2.5 1.000 2009 132.79 96.64 5.0 1.000 2010 131.42 95.64 4.0 1.000 2011 111.00 80.79 3.0 1.000 2012 92.69 67.46 2.0 1.000 Thereafter Various Escalation Rates Notes: (1) West Texas Intermediate at Cushing Oklahoma 40 degrees API, 0.5% sulphur (2) Edmonton Light Sweet 40 degrees API, 0.3% sulphur (3) Comer Medium (29.3 degrees API Heavy stream) Net Asset Value per Share Information Based on Sproule Reserves Evaluation as at June 30, 2008 ---------------------------------------------------------------------------- ($M except share amounts) Before Tax Before Tax 5% Discount 10% Discount ---------------------------------------------------------------------------- Value of Total Proven plus Probable Reserves 176,223 144,255 Undeveloped Land (24,008 acres at $150 per acre) 3,601 3,601 Estimated Proforma Net Debt as at June 30, 2008 (21,900) (21,900) ---------------------------------------------------------------------------- Total Net Assets 157,924 125,956 Class A shares Outstanding (MM) as at September 29, 2008 47.0 47.0 Estimated Net Asset Value per Class A share $3.36 $2.68 ---------------------------------------------------------------------------- SENSITIVITY TO COMMODITY PRICE ASSUMPTIONS Sproule has provided the Company with a sensitivity analysis using its September 1, 2008 commodity price forecast. With this lower price forecast the estimated value of the Total Proven plus Probable Reserves is reduced by 11.7% to $127.4 million dollars using before tax 10% discount rate with an effective date of June 30, 2008. Accordingly the estimated net asset value per Class "A" share of Seaview is reduced 12.3% to $2.32 per share at the revised pricing assumptions. For comparison purposes, the price assumptions used in the revised sensitivity runs are as follows: Summary of Pricing and Inflation Rate Assumptions as at August 31, 2008 - Forecast Prices and Costs (NTD: Sproule to provide) The pricing sensitivity report used the following pricing, exchange rate and inflation rate assumptions as of June 30, 2008 in estimating Seaview's reserves data using forecast prices and costs. CRUDE OIL ------------------------------------------ Edmonton Cromer Par Price Medium WTI 40 Degrees 29.3 Degrees Crude API API Year Oil Crude Oil Crude Oil ----- ---------- ------------ ------------- ($US/Bbl) ($Cdn/Bbl) ($Cdn/Bbl) ---------- ------------ ------------- (1) (2) (3) ---------- ------------ ------------- Forecast 2008 119.31 117.90 103.75 2009 119.85 118.41 104.20 2010 118.31 116.85 102.83 2011 108.25 106.77 93.96 2012 92.01 90.51 79.65 Thereafter Various Escalation Rates NATURAL NATURAL GAS GAS LIQUIDS ------------- ---------------------- Pentanes Butanes Alberta Plus FOB US/CAN AECO Gas FOB Field Field Exchange Year Price Gate Gate Inflation Rate ----- ------------- ----------- --------- ---------- --------- ($Cdn/mmbtu) ($Cdn/Bbl) ($Cdn/Bbl) (%)($US/Cdn) ----- ------------- ----------- --------- ---------- --------- Forecast 2008 7.70 120.75 92.27 2.5 1.000 2009 8.22 121.27 88.26 5.0 1.000 2010 8.23 119.67 87.09 4.0 1.000 2011 8.14 109.35 79.58 3.0 1.000 2012 8.69 92.69 67.46 2.0 1.000 Thereafter Various Escalation Rates Notes: (1) West Texas Intermediate at Cushing Oklahoma 40 degrees API, 0.5% sulphur (2) Edmonton Light Sweet 40 degrees API, 0.3% sulphur (3) Comer Medium (29.3 ae degrees API Heavy stream) OUTLOOK; 2008 GUIDANCE Seaview's management team has aggressively positioned the Company for solid future growth per share through the successful execution of the Company's business strategy. With the execution of three strategic corporate acquisitions and one property acquisition, combined with a very successful 2008 drilling program, Seaview has the following corporate characteristics: -Total Proven reserves of 4,104 Mboe, and Total Proven plus Probable reserves of 5,733 Mboe, effective June 30, 2008, as evaluated by Sproule utilizing NI 51-101 reserve definitions. - Reserve life index of 10.1 years based on Total Proven plus Probable reserves and the Company's December 2008 exit production rate of 1,550 boe/d. - Total Proven reserves value of $113.3 million, based on before tax net present value at a 10% discount rate ("BTAX NPV10%"). Total Proven plus Probable reserves value of $144.3 million at BTAX NPV10%. - Net asset value of $3.36 and $2.68 per Class A share, using a BTAX 5% and 10% discount rate respectively, including value of undeveloped land. - Forecasted 2008 average daily production estimate of more than 1050 Boe/d, and 2008 production exit rate target of more than 1,550 Boe/d. - Expanding land position of 116,916 gross acres (48,143 net acres), including 24,008 net acres of undeveloped lands. - Extensive drilling inventory of more than 90 locations, including over 70 prospects targeting multi-zone conventional targets and an expanding inventory of light oil prospects in Southeast Saskatchewan. - Seaview's prospect inventory is not currently reflected in the Company's independent reserve evaluation and therefore provides for significant long-term growth potential. - Exposure to Montney resource play in Pouce Coupe with 3.9 net sections of land in this exciting Montney tight gas play. Seaview is currently participating in drilling the Company's first horizontal test with potentially 16 net horizontal follow-up locations. - Forecast debt to fourth quarter annualized cash flow ratio of 1.0 times. - Seaview's available bank line is currently $34 million. - 47.1 million Class A shares and 1.054 million Class B shares outstanding. Seaview is a Calgary, Alberta based company engaged in the exploration, development and production of conventional crude oil and natural gas reserves in Canada. Seaview's strategy is to build shareholder value through a balance of exploration and development drilling complemented by a focused acquisition program. Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies. This press release may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The estimated values disclosed in this press release do not represent fair market values.
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