RE: North Energy Capital8 Mar 2018 09:46
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2017 Year-end Reserve Report Highlights
� The Company increased proved reserves ("1P") by 20% or 1,756 Mbbl after production and increased proved plus probable reserves ("2P") by 18% or 2,837 Mbbl after production.
� The increase in reserves replaced production by 450% on a 1P basis and 665% on a 2P basis.
� The Company's December 31, 2017 net present value of future net revenues before tax (discounted at 10 percent) was $407.9 million ($210.5 million on a 1P basis).
� December 31, 2017 net present value of future net revenues after tax (discounted at 10 percent) was $156.7 million ($83.5 million on a 1P basis).
� Future development costs ("FDC") associated with a portion of the Company's internally identified drilling location inventory and portfolio of low risk recompletion projects totaled $57.8 million for 1P and $85.3 million for both 2P.
� Finding and development costs (including changes in FDC) were $7.66 for 1P and $6.33 for 2P. Using the Company's estimated 2017 operating netback of $24.23 per barrel, the 1P recycle ratio was 3.2 times, and the 2P recycle ratio was 3.8 times.
� The Company's asset base remains conservatively booked, with 1P assigned 62 drilling locations (30% of the Company's identified drilling inventory) and 2P assigned 90 drilling locations (43% of the Company's identified drilling inventory).
Paul Baay, President and Chief Executive Officer, commented:
"The updated reserves report confirms the large reserve base consolidated by the Company and the opportunity to significantly increase production over the near term. With 208 drilling locations identified by Management and only 90 locations booked in the report, the team remains conservative on the potential upside of the asset base. With the current drilling and recompletion program the Company expects to rapidly convert reserves into production, cash flows and earnings."
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