Cona’s reserves were independently evaluated by Ryder Scott Company-Canada (“Ryder Scott”) as at December 31, 2016 in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserves disclosure is included in the Company’s AIF for the year ended December 31, 2016.
Highlights of the 2016 reserves report
Cona has proved plus probable reserves of 127.7 MMboe at December 31, 2016. The reserves evaluation includes the following:
Positive technical revisions for the Cactus Lake field of 13.6 MMboe as a result of the ongoing success of the polymer flood project;
An extended timeline for the development of the Cactus Lake SAGD project which resulted in the reclassification of probable reserves of 13.4 MMboe; and
The disposition of the Coleville and Smiley properties (16.5 MMboe).
2016 F&D costs for the Company’s assets with proved plus probable reserves at December 31, 2016 (i.e. normalized for the dispositions and the reclassification of the reserves associated with Cactus Lake SAGD) are $5.91/boe on a proved basis and $6.02/boe on a proved plus probable basis. F&D costs are reported inclusive of future development costs.
Cona has a low risk reserves portfolio, as proved developed reserves represent 68% of proved reserves and 40% of proved plus probable reserves; proved reserves represent 59% of proved plus probable reserves.
Cona’s proved and proved plus probable reserves life indices are 12.0 years and 20.3 years, respectively (using Q1/17 production of 17,201 boe/d).
Reserves Effective December 31, 2016
The following table sets out the reserves of the Corporation at December 31, 2016 on a forecast pricing and cost, gross (before royalties) and net (after royalties) basis:
|Heavy Oil||Light and Medium Crude||Natural Gas||Oil Equivalent (1)|
|Gross (Mbbl)||Net (Mbbl)||Gross (Mbbl)||Net (Mbbl)||Gross (MMcf)||Net (MMcf)
||Gross (Mboe)||Net (Mboe)|
|Total proved plus probable||125,774||113,345||-||-||11,308||10,380||127,658||115,075|
(1) Figures may not add due to rounding
"Cona has adopted the standard of 6 Mcf:1 bbl when converting natural gas to oil equivalent. Boe conversions 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value."