Press release from Marketwire
Storm Resources Ltd. Announces Reserves Associated With the Acquisition of Bellamont Exploration Ltd.
Thursday, April 12, 2012
Storm Resources Ltd. Announces Reserves Associated With the Acquisition of Bellamont Exploration Ltd.17:16 EDT Thursday, April 12, 2012CALGARY, ALBERTA--(Marketwire - April 12, 2012) -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. STORM RESOURCES LTD. ("Storm") (TSX VENTURE:SRX) announces the results of a reserves evaluation for the assets of Bellamont Exploration Ltd. ("Bellamont") which was completed by independent reserve evaluator InSite Petroleum Consultants Ltd. ("InSite"). Storm completed the acquisition of Bellamont on March 23, 2012. InSite's reserve evaluation is effective March 31, 2012 and was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and complies with National Instrument NI 51-101 - Standards of Disclosure for Oil and Gas Activities. The reserve evaluation was based on InSite's forecast pricing and foreign exchange rates at December 31, 2011 which are shown below. Storm's Reserves Committee did not formally review the evaluation completed by InSite.InSite has estimated that proved reserves total 4,611 Mboe and proved plus probable reserves total 8,340 Mboe. Future development costs ("FDC") were estimated to be $7.6 million on a proved basis and $42.4 million on a proved plus probable basis. Using the total purchase price of $95.8 million, the all-in cost to add proved reserves was $22.42 per Boe and for proved plus probable reserves was $16.57 per Boe. The all-in calculation assumes no value is assigned for undeveloped land and includes future development costs. Based on Bellamont's operating netback of $28.04 in 2011, the recycle ratio associated with acquiring Bellamont is 1.7 times on a proved plus probable basis (including FDC).Gross Bellamont Interest Reserves as at March 31, 2012(Before deduction of royalties payable, not including royalties receivable) Light Crude Oil (Mbbls) Sales Gas (MMcf) NGL (Mbbls) 6:1 Oil Equivalent (Mboe)Proved producing2,1689,9821974,028Proved non-producing16064715283Total proved developed2,32810,6292124,311Proved undeveloped30000300Total proved2,62810,6292124,611Probable additional1,57111,4052573,729Total proved plus probable4,19922,0344698,340Note: Numbers may not add due to rounding.Future Development CostsProvedGrimshaw3.0 net horizontals$7.5 millionOther$0.1 millionTotal proved FDC$7.6 millionProved Plus Probable AdditionalGrimshaw5.0 net horizontals$12.6 millionGrand Prairie Montney5.0 net horizontals$22.1 millionGrande Prairie Dunvegan3.0 net horizontals$6.1 millionOther$1.7 millionTotal proved plus probable additional FDC$42.4 millionNote: Numbers may not add due to rounding.Proved ExpendituresProved Plus Probable Additional Expenditures2012$7.6 million$14.3 million2013-$18.9 million2014-$4.7 million2015-$4.5 millionNet Present Value Summary (before tax) as at March 31, 2012InSite's price forecast at December 31, 2011 was used to determine all estimates of future net revenue (also referred to as net present value or NPV). No provision was made for interest, debt service charges and general and administrative expenses. It should not be assumed that the NPVs as estimated by InSite represent the fair market value of the reserves. The calculated NPVs include a deduction for estimated future well abandonment costs.Undiscounted (000s)Discounted at 5% (000s)Discounted at 10% (000s)Discounted at 15% (000s)Discounted at 20% (000s)Proved producing$131,297$98,946$80,199$67,977$59,373Proved non-producing9,5527,9666,8596,0525,440Total proved developed$140,849$106,912$87,058$74,029$64,813Proved undeveloped6,1834,0302,5271,433609Total proved$147,031$110,942$89,586$75,462$65,422Probable additional98,56958,71238,13025,99318,185Total proved plus probable$245,601$169,654$127,716$101,455$83,607Note: Numbers may not add due to rounding.InSite Escalating Price Forecast as at December 31, 2011In calculating net present values, reference prices are adjusted for the quality of the product and for transportation costs. WTI Crude Oil (US$/Bbl)Edmonton Light Crude Oil (Cdn$/Bbl)Henry Hub Natural Gas (US$/Mmbtu)AECO Natural Gas (Cdn$/Mmbtu) Propane (Cdn$/Bbl) Butane (Cdn$/Bbl)2012100.0098.003.903.4558.8073.502013101.0099.004.504.0459.4074.252014102.0099.965.004.5359.9874.972015103.00100.925.505.0260.5575.692016104.00101.886.005.5161.1376.41InSite Forecast Wellhead Prices and Actual 2011 Wellhead Prices(after deduction of transportation costs)Reflects actual wellhead price after adjusting for quality and for transportation costs.Crude Oil (Cdn$/Bbl)Natural Gas (Cdn$/mcf)Natural Gas Liquids (Cdn$/bbl)Per Boe (Cdn$/Boe)2011 actual86.033.8471.2952.132012 Apr-Dec forecast88.393.6573.2356.642013 forecast89.954.3672.8660.192014 forecast91.354.9273.3962.482015 forecast92.485.5073.6762.432016 forecast93.276.0674.5665.49Storm Resources Ltd. began operations in August 2010. Storm is headquartered in Calgary, Alberta and is active in the Horn River Basin and Umbach areas of north eastern British Columbia, and in the Grande Prairie area of north western Alberta.READER ADVISORIESBoe Presentation - For the purpose of calculating unit revenues and costs, natural gas is converted to a barrel of oil equivalent ("Boe") using six thousand cubic feet ("Mcf") of natural gas equal to one barrel of oil unless otherwise stated. Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of six Mcf to one barrel ("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. All Boe measurements and conversions in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Mboe means 1,000 Boe.Certain information in this press release contains forward-looking information that involves risk and uncertainty. For this purpose, any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Storm assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.FOR FURTHER INFORMATION PLEASE CONTACT: Brian LavergneStorm Resources Ltd.President and Chief Executive Officer(403) 817-6145ORDonald McLeanStorm Resources Ltd.Chief Financial Officer(403) 817-6145ORCarol KnudsenStorm Resources Ltd.Manager, Corporate Affairs(403) 817-6145www.stormresourcesltd.comNEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.