Cona’s reserves were independently evaluated by Ryder Scott Company-Canada (“Ryder Scott”) as at December 31, 2017 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, 2017.
Highlights of the 2017 reserves report
Cona has proved plus probable reserves of 129.4 MMboe at December 31, 2017. The reserves evaluation includes the following:
- Positive heavy oil technical revisions of 7.1 million bbl on 1P reserves and 2.5 million bbl on 2P reserves, largely attributed to the Cactus Lake property, are further recognition of Cona’s successful polymer flood;
- Positive heavy oil infill drilling revisions of 5.9 million bbl on 1P reserves and 5.2 million bbl on 2P reserves, focused on the Cactus Lake and Winter properties highlighting the performance and depth of Cona’s drilling inventory; and
- The disposition of the Silverdale property (92 Mboe).
Finding, development and acquisition (“FD&A”) costs were favorable for an oil weighted asset base at $3.54 per boe for 2P reserves, $7.01 per boe for 1P reserves and $6.58 per boe for PDP reserves, including future development capital (“FDC”).
Cona has a low risk reserves portfolio, as proved developed reserves represent 63% of proved reserves and 41% of proved plus probable reserves; proved reserves represent 64% of proved plus probable reserves.
Cona’s RLI at December 31, 2017 is 21.2 years based on 2P reserves and 13.5 years based on 1P reserves.
Reserves Effective December 31, 2017
The following table sets out the reserves of the Corporation at December 31, 2017 on a forecast pricing and cost, gross (before royalties) and net (after royalties) basis:
|Heavy Oil||Natural Gas||Oil Equivalent (1)|
|Gross (Mbbl)||Net (Mbbl)||Gross (MMcf)||Net (MMcf)
||Gross (Mboe)||Net (Mboe)|
|Total proved plus probable||128,253||115,597||6,616||6,070||129,356||116,609|
(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."