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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Pearl Explorati | LSE:0QB0 | London | Ordinary Share | SE0002060863 | PEARL EXPLORATION AND PRODUCTION GDR |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.18 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
CALGARY, ALBERTA – BlackPearl Resources Inc. (“we”, “our”, “us”, “BlackPearl” or the “Company”) (TSX: PXX) (NASDAQ Stockholm: PXXS) is pleased to provide a construction update on its Onion Lake thermal expansion project and Q4 2017 production information, as well as, announce the results of its 2017 independent year-end oil and gas reserve and resource evaluation.
Highlights and accomplishments included:
John Festival, President of BlackPearl, indicated that “we are very pleased with the progress of the Onion Lake expansion project. Due to our committed operations staff and favourable weather conditions we are going to complete the project well ahead of schedule. We expect to commence steam injection in February.
We are also pleased with the significant increase in proved reserves, which reflects the positive results of our Onion Lake thermal project. These results were one of the primary reasons we made a change in our strategic plan to accelerate the next expansion of Onion Lake before we tackle development of our Blackrod SAGD project. Full cycle economics of our Onion Lake thermal project are best in class compared to North American oil projects. The increased cash flow generated from an expanded Onion Lake project will put us in a better financial position to develop the large Blackrod project. The consequence of this shift in strategy is that regulatory rules necessitate the reclassification of the Blackrod reserves to resources, but we are still very committed to development of this large resource.”
Onion Lake Construction Update
We have made excellent progress over the last two months on the construction of the 6,000 barrel per day phase 2 thermal expansion at Onion Lake and construction is nearing completion, approximately five months ahead of our original estimate. Capital costs are trending toward the low end of our original estimates of $180- 185 million. We have started the commissioning of the central processing facilities and steam is expected to be delivered to the first pad of wells in February. Steam injection to the second pad of wells will occur approximately one month later. First oil is expected before the end of Q2 2018. We anticipate reaching peak production approximately 12 months after initial steam injection, a similar timeline to that achieved for phase 1.
Production Update
BlackPearl’s Q4 2017 oil and gas sales volumes were 10,600 boe per day, a 17% increase over production during the third quarter. The increase in fourth quarter production is mainly attributable to the successful restart of the Onion Lake thermal facilities after completion of a facility turnaround during the third quarter.
Three months ended December 31 | Year ended December 31 | |||
Production by Area (boe/d) | 2017 | 2016 | 2017 | 2016 |
Onion Lake - thermal | 6,204 | 6,119 | 5,686 | 5,520 |
Onion Lake - primary | 1,917 | 2,011 | 2,022 | 2,135 |
Mooney | 1,178 | 785 | 1,096 | 801 |
John Lake | 699 | 837 | 770 | 863 |
Blackrod | 481 | 523 | 490 | 556 |
Other | 121 | 204 | 135 | 202 |
Total production | 10,600 | 10,479 | 10,199 | 10,077 |
Oil and Gas Reserves
The following tables summarize certain information contained in the independent reserves report prepared by Sproule Associates Limited (“Sproule”) as of December 31, 2017. The report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserve information as required under NI 51-101 will be included in the Company’s Annual Information Form which is expected to be filed on SEDAR on February 22, 2018. It should not be assumed that the net present value of reserves estimated by Sproule represents the fair market value of these reserves.
Summary of Oil and Gas Reserves
(Company interest, before royalties) | HeavyCrude Oil | Bitumen | NaturalGas | 2017Total | 2016Total |
(Mbbl) | (Mbbl) | (MMcf) | (MBoe) | (MBoe) | |
Proved developed producing | 18,378 | 426 | - | 18,804 | 19,125 |
Proved developed non-producing | 13,247 | - | 5 | 13,248 | 3,428 |
Proved undeveloped | 62,321 | - | 3 | 62,322 | 53,840 |
Total proved | 93,946 | 426 | 8 | 94,374 | 76,393 |
Probable | 68,038 | 21 | 7 | 68,060 | 235,186 |
Total proved plus probable | 161,984 | 447 | 15 | 162,434 | 311,579 |
Notes:1. BOE’s may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 Mcf: 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. |
Net Present Value of Reserves
Net Present Value of Future Net Revenue Discounted at %/year | ||||||||||
($000s) | 0 | % | 5 | % | 10 | % | 15 | % | 20 | % |
Before Tax | ||||||||||
Proved | ||||||||||
Developed producing | 455,399 | 402,162 | 354,620 | 314,838 | 282,110 | |||||
Developed non-producing | 272,154 | 239,688 | 208,828 | 181,899 | 159,021 | |||||
Undeveloped | 1,516,483 | 868,783 | 521,732 | 327,678 | 213,734 | |||||
Total proved | 2,244,035 | 1,510,633 | 1,085,180 | 824,416 | 654,865 | |||||
Probable | 3,143,580 | 1,619,000 | 932,438 | 588,985 | 399,242 | |||||
Total proved plus probable | 5,387,615 | 3,129,634 | 2,017,618 | 1,413,400 | 1,054,106 | |||||
After Tax | ||||||||||
Proved | ||||||||||
Developed producing | 455,399 | 402,162 | 354,620 | 314,838 | 282,110 | |||||
Developed non-producing | 265,751 | 235,301 | 205,765 | 179,725 | 157,453 | |||||
Undeveloped | 1,268,764 | 710,338 | 415,748 | 254,094 | 161,026 | |||||
Total proved | 1,989,914 | 1,347,801 | 976,134 | 748,657 | 600,589 | |||||
Probable | 2,594,909 | 1,295,166 | 725,135 | 447,556 | 297,872 | |||||
Total proved plus probable | 4,584,823 | 2,642,967 | 1,701,269 | 1,196,212 | 898,461 |
Notes:
1. Based on Sproule’s December 31, 2017 forecast prices.
2. Columns may not add due to rounding.
Estimated Future Development Capital
The following table summarizes the future development capital (“FDC”) Sproule estimates is required to bring total proved and total proved plus probable reserves on production.
($ Millions) | Total Proved | Total Proved + Probable |
2018 | 59.0 | 59.1 |
2019 | 36.5 | 86.6 |
2020 | 56.3 | 95.6 |
2021 | 29.4 | 42.0 |
2022 | 37.2 | 25.4 |
Remainder | 537.1 | 651.4 |
Total FDC undiscounted | 755.5 | 960.1 |
Total FDC discounted at 10% | 376.6 | 450.5 |
Reconciliation of Changes in Reserves
The following table summarizes the changes in Sproule’s evaluation of the Company’s share of oil and natural gas reserves (before royalties) from December 31, 2016 to December 31, 2017.
HeavyCrude Oil | Bitumen | NaturalGas | BOE | ||||||
(Mbbl) | (Mbbl) | (MMcf) | (MBOE) | ||||||
Proved | |||||||||
Balance, Dec 31, 2016 | 75,260 | 1,057 | 456 | 76,393 | |||||
Extensions and improved recovery | 18,284 | 8 | 18,285 | ||||||
Technical revisions | 3,931 | (452 | ) | (247 | ) | 3,438 | |||
Economic factors | (20 | ) | (20 | ) | |||||
Production | (3,509 | ) | (179 | ) | (209 | ) | (3,723 | ) | |
Balance, Dec 31, 2017 | 93,946 | 426 | 8 | 94,374 | |||||
Probable | |||||||||
Balance, Dec 31, 2016 | 56,374 | 178,742 | 421 | 235,186 | |||||
Extensions and improved recovery | 14,904 | 7 | 14,905 | ||||||
Technical revisions | (3,348 | ) | (178,721) (2) | (421 | ) | (182,139 | ) | ||
Economic factors | 108 | 108 | |||||||
Production | |||||||||
Balance, Dec 31, 2017 | 68,038 | 21 | 7 | 68,061 | |||||
Proved plus Probable | |||||||||
Balance, Dec 31, 2016 | 131,634 | 179,799 | 877 | 311,579 | |||||
Extensions and improved recovery | 33,188 | 15 | 33,191 | ||||||
Technical revisions | 583 | (179,173 | ) | (668 | ) | (178,700 | ) | ||
Economic factors | 88 | 88 | |||||||
Production | (3,509 | ) | (179 | ) | (209 | ) | (3,723 | ) | |
Balance, Dec 31, 2017 | 161,984 | 447 | 15 | 162,434 |
Note:
1. Columns may not add due to rounding
2. Includes technical revisions of bitumen associated with the Blackrod SAGD project that were reclassified to contingent resources
Pricing Assumptions
The pricing assumptions used in the Sproule evaluation are summarized below.
Year | WTICushing40° API | Canadian Light Sweet Crude40° API | WesternCanadian Select20.5° API | AlbertaAECO-CSpot | Inflation rate | Exchange rate |
(US$/bbl) | (CDN$/bbl) | (CDN$/bbl) | (CDN$/MMBtu) | (%/yr) | (US$/Cdn$) | |
2018 | 55.00 | 65.44 | 51.05 | 2.85 | 0.0 | 0.790 |
2019 | 65.00 | 74.51 | 59.61 | 3.11 | 2.0 | 0.820 |
2020 | 70.00 | 78.24 | 64.94 | 3.65 | 2.0 | 0.850 |
2021 | 73.00 | 82.45 | 68.43 | 3.80 | 2.0 | 0.850 |
2022 | 74.46 | 84.10 | 69.80 | 3.95 | 2.0 | 0.850 |
2023 | 75.95 | 85.78 | 71.20 | 4.05 | 2.0 | 0.850 |
2024 | 77.47 | 87.49 | 72.62 | 4.15 | 2.0 | 0.850 |
2025 | 79.02 | 89.24 | 74.07 | 4.25 | 2.0 | 0.850 |
2026 | 80.60 | 91.03 | 75.55 | 4.36 | 2.0 | 0.850 |
2027 | 82.21 | 92.85 | 77.06 | 4.46 | 2.0 | 0.850 |
2028 | 83.85 | 94.71 | 78.61 | 4.57 | 2.0 | 0.850 |
Escalation rate of 2.0% thereafter |
Notes:
1. The pricing assumptions were provided by Sproule.
2. None of the Company’s future production is subject to a fixed or contractually committed price.
Definitions:
Contingent Resources
In addition to the reserve evaluation discussed above, the Company also requested Sproule prepare resource evaluations for each of its core properties: Blackrod, Onion Lake and Mooney. The following tables summarize certain information contained in the contingent resource evaluations prepared by Sproule as of December 31, 2017. The reports were independently prepared in accordance with definitions, standards and procedures contained in the COGE Handbook.
It should not be assumed that the estimates of recovery, production, and net revenue presented in the tables below represent the fair market value of the Company’s contingent resources. There are certain contingencies which currently prevent the classification of these contingent resources as reserves. Information on these contingencies is provided in the footnotes to the tables below. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. Please refer to our Annual Information Form (to be filed on February 22, 2018) for a more detailed discussion of our contingent resources.
Summary of Best Estimate Contingent Resource Volumes – By Property (1)(2)
Unrisked Volumes | Risked Volumes(4) | ||||||||||
Heavy Crude Oil | Bitumen | Heavy Crude Oil | Bitumen | ||||||||
Project | MaturitySubclass (3) | Chance of Development(4) | Gross(5) | Net (5) | Gross(5) | Net (5) | Gross(5) | Net | Gross(5) | Net (5) | |
Blackrod (6) | (Mbbl) | (Mbbl) | (Mbbl) | (Mbbl) | |||||||
First phase | Development/ pending | 94 | % | 179,294 | 141,971 | 168,536 | 133,453 | ||||
Future phases | Development/ on hold | 77 | % | 566,135 | 461,358 | 435,924 | 355,246 | ||||
Onion Lake (7) | |||||||||||
Thermal | Development/ pending | 85 | % | 27,035 | 21,356 | 22,980 | 18,153 | ||||
Primary | Development/ pending | 90 | % | 1,154 | 851 | 1,038 | 766 | ||||
Mooney (8) | Development/ on hold | 71 | % | 15,904 | 13,791 | 11,292 | 9,792 |
Summary of Net Present Value of Future Net Revenue of Development Pending Contingent Resources
The following table sets forth the net present value of BlackPearl’s best estimate risked contingent resources in the development pending project maturity sub-class at December 31, 2017.
An estimate of risked net present value of future net revenues of the “development pending” contingent resources subclass is preliminary in nature and is provided to assist the reader in reaching an opinion on the merit and likelihood of the Company proceeding with the required investment. It includes contingent resources that are considered too uncertain with respect to the chance of development to be classified as reserves. There is uncertainty that the risked net present value of future net revenue will be realized. The other subclass of resources (development on hold) is not included in this net present value amount, and therefore, this is not reflective of the value of the resources base.
Net Present Values of Future Net Revenue Before Income Taxes | ||||||||||||
Discounted at (%/year) | ||||||||||||
0 | % | 5 | % | 10 | % | 15 | % | 20 | % | |||
Project | ($M) | |||||||||||
Blackrod (6)(first phase) | 4,110,612 | 1,470,349 | 554,602 | 200,879 | 53,197 | |||||||
Onion Lake (7)(thermal) | 746,710 | 322,153 | 151,364 | 76,040 | 39,853 | |||||||
Onion Lake (7)(primary) | 13,247 | 9,349 | 6,643 | 4,762 | 3,446 |
Notes:
(a) Development pending is where resolution of the final conditions of development are being actively pursued, indicating there is a high chance of development.(b) Development on hold is where there is a reasonable chance of development, but there are major non-technical contingencies to be resolved that are usually beyond the control of the operator.
Other
The Company is planning to release its 2017 year-end financial and operating results on February 22, 2018.At December 31, 2017, the Company had 336,267,235 common shares outstanding.
Forward-Looking Statements
This release contains certain forward-looking statements and forward-looking information (collectively referred to as “forward-looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of historic fact are forward-looking statements. Forward-looking statements are typically identified by such words as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "potential", "targeting", "intend", "could", "might", "should", "believe" or similar words suggesting future events or future performance. In particular, this release contains the following forward-looking statements:
The forward-looking information is based on, among other things, expectations and assumptions by management regarding its future growth, future production levels, future oil and natural gas prices, continuation of existing tax, royalty and regulatory regimes, foreign exchange rates, estimates of future operating costs, timing and amount of capital expenditures, performance of existing and future wells, recoverability of the Company’s reserves and contingent resources, the ability to obtain financing on acceptable terms, availability of skilled labour and drilling and related equipment on a timely and cost efficient basis, continuance of current general economic and financial market conditions, environment matters and the ability to market oil and natural gas successfully to current and new customers. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
By their nature, forward-looking statements involve numerous known and unknown risks and uncertainties that contribute to the possibility that actual results will differ from those anticipated in the forward-looking statements. Further information regarding these risk factors may be found under “Risk Factors” in the Annual Information Form, which can be accessed on SEDAR at www.sedar.com.
Undue reliance should not be placed on these forward-looking statements. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will be realized. Actual results will differ, and the differences may be material and adverse to the Company and its shareholders. Furthermore, the forward-looking statements contained in this release are made as of the date hereof, and the Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
This is information that BlackPearl Resources Inc. is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication at 3:00 p.m. Mountain Time on January 30, 2018.
http://prlibrary-eu.nasdaq.com/Resource/Download/606f1e96-f518-4b11-bc38-5e698f005708
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