Border Announces Initial Slave Point Well Results and Financials and Reserves Data
16 Julho 2012 - 5:42PM
Marketwired Canada
Border Petroleum Corp. ("Border" or the "Corporation") (TSX VENTURE:BOR) is
pleased to announce initial results from its first two Slave Point horizontal
wells in the Red Earth area. The wells were drilled to a vertical depth of 1,400
metres with minimum 500 metre horizontal legs and fracture stimulated utilizing
an average of 10 stages. The wells were drilled on 18,720 acres of Loon River
Cree Nation exploration rights (the "Loon Block") granted under a federal
government permit to Border on November 30, 2011. The two wells, which satisfied
Border's first year drilling requirements under the permit, were drilled in
proximity to infrastructure and into a gross pay thickness of 18 metres. Gross
pay thicknesses on the Loon Block reach up to approximately 30 metres.
To date, based on field reporting, the peak seven days of initial production
from these short leg horizontal wells averaged 159 bopd, with a single day peak
rate average of 175 bopd, and 30 days of initial production ("30 day IP")
averaging 102 bopd or 10 bopd per frac. 30 day IP and short-term rates are not
necessarily indicative of long-term performance or of ultimate recovery.
Slave Point horizontal wells in the Red Earth area typically reach their maximum
oil rates 30 - 120 production days after start-up (the "clean-up period").
During the clean-up period, rates fluctuate as fluid utilized in the fracture
stimulation process ("frac fluid") is recovered and inflow stabilizes. As frac
fluid is recovered, oil production typically increases. This trend is reflected
in Border's well results as illustrated in the following table:
---------------------------------------
Average Oil
Production Average
per Well Oil Cut
---------------------------------------
Day 1 0 bopd 0%
---------------------------------------
Day 15 56 bopd 27%
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Day 30 102 bopd 52%
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The above results have validated Border's strategy of utilizing short horizontal
wells to de-risk the Loon Block. Capital exposure and operational risk were
minimized while valuable information was obtained to assist in future
development. Having achieved a 30 day IP of 10 bopd per frac, Border now intends
to take advantage of the efficiencies related to drilling long leg horizontal
wells incorporating a minimum of 20 frac stages. In this regard, Border has
initiated licensing its first long leg horizontal well which it plans to
commence in the fall. The well will be funded by cash on hand and funds
generated by current assets.
SPROULE RESOURCE ASSESSMENT OF BORDER INTERESTS IN GREATER RED EARTH AREA
Border engaged Sproule Associates Ltd. ("Sproule") to conduct an assessment of
its Contingent Slave Point Oil Resources (the "Sproule Resource Assessment")
covering 20,000 gross (20,000 net) acres of the Corporation's interests in the
Greater Red Earth Area effective May 31, 2012. The Sproule Resource Assessment
was prepared in accordance with definitions, standards and procedures contained
in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI
51-101").
Sproule's estimate of Discovered Oil Initially in Place ("DOIIP") on Border's
Slave Point interests is 316 MMbbl (all volumes are net to Border). Sproule's
best estimate of Contingent Slave Point Oil Resources as of May 31, 2012 is 40.4
MMbbls with a low estimate of 21.5 MMbbls and a high estimate of 65.1 MMbbls.
The Sproule Resource Assessment is based on a development plan that consists of
one 1,400 metre long horizontal well per quarter section utilizing multi-stage
fracture stimulation completions, and does not assign any Contingent Resources
or reserves for secondary recovery schemes or down spacing of drill spacing
units.
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Summary of the Oil Initially-In-Place and Ultimate Recoverable Oil
of Border Petroleum Corp's Slave Point Oil Holdings
in the Greater Red Earth Area of Alberta (As of May 31, 2012)
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Company Gross
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Discovered
Oil Discovered Contingent
Initially- Ultimate Ultimate Oil
In-Place Recovery Recoverable Reserves Resources
(1)(2) Factor Oil (3) (4) (5)
Category (%) (MMbbl) (MMbbl) (MMbbl)
---------------------------------------------------------------------------
All Land Holdings
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Low Estimate (6) 316.2 7% 21.5 0.2 (1P) 21.3
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Best Estimate (6) 316.2 13% 40.4 1.5 (2P) 38.9
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High Estimate (6) 316.2 21% 65.1 1.9 (3P) 63.2
---------------------------------------------------------------------------
Notes:
(1) "Discovered Oil Initially in place" means that quantity of petroleum
that is estimated, as of a given date, to be contained in known
accumulations prior to production. The recoverable portion of discovered
petroleum initially in place includes production, reserves and contingent
resources. There is no certainty that it will be commercially viable to
produce any portion of these resources.
(2) All DOIIP other than cumulative production, reserves and contingent
resources have been categorized as unrecoverable.
(3) "Discovered Ultimate Recoverable Oil" equals Contingent Oil Resources
plus Ultimate Reserves.
(4) "Ultimate Reserves" are technical volumes and are shown as produced oil
volumes plus remaining oil reserves, as reported in the March 31, 2012
Sproule Reserves Report. Note that 3P reserves were not included in the
Sproule Reserves Report, but were estimated for the purposes of the Sproule
Resources Assessment.
(5) "Contingent Oil Resources" are those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from known accumulations
using established technology or technology under development, but which are
not currently considered to be commercially recoverable due to one or more
contingencies. Contingencies may include factors such as distance from
existing production, economic, legal, environmental, political, and
regulatory matters or a lack of markets. It is also appropriate to classify
as contingent resources the estimated discovered recoverable quantities
associated with a project in the early evaluation stage.
(6) "Uncertainty Ranges" as are described by the COGEH as low, best, and
high estimates for reserves and resources as follows:
Low Estimate: This is considered to be a conservative estimate of the
quantity that will actually be recovered. It is likely that the actual
remaining quantities recovered will exceed the low estimate. If
probabilistic methods are used, there should be at least a 90 percent
probability (P90) that the quantities actually recovered will equal or
exceed the low estimate.
Best Estimate: This is considered to be the best estimate of the quantity
that will actually be recovered. It is equally likely that the actual
remaining quantities recovered will be greater or less than the best
estimate. If probabilistic methods are used, there should be at least a 50
percent probability (P50) that the quantities actually recovered will equal
or exceed the best estimate.
High Estimate: This is considered to be an optimistic estimate of the
quantity that will actually be recovered. It is unlikely that the actual
remaining quantities recovered will exceed the high estimate. If
probabilistic methods are used, there should be at least a 10 percent
probability (P10) that the quantities actually recovered will equal or
exceed the high estimate.
FILING OF FINANCIALS, ANNUAL INFORMATION FORM AND RESERVES DATA
Border is also pleased to report its financial results for the year ended March
31, 2012. The audited financial statements and Management's Discussion &
Analysis ("MD&A") were filed on SEDAR on July 16, 2012. The Corporation is also
pleased to announce that pursuant to NI 51-101 it has filed its Form 51-101F1
Statement of Reserves Data and Other Oil and Gas Information, Form 51-101F2
Report on Reserves Data by Independent Qualified Reserves Evaluator and Form
51-101F3 Report of Management and Directors on Oil and Gas Disclosure. Border's
Annual Information Form for the year ended March 31, 2012 has also been filed on
SEDAR on July 16, 2012. A copy of the annual and NI 51-101 filings of the
Corporation are available for viewing at www.sedar.com.
HIGHLIGHTS OF THE YEAR ENDED MARCH 31, 2012
The following are the highlights of Border's operations for the year ended March
31, 2012:
-- Entered a new joint venture (the "Joint Venture") with the wholly-owned
energy company of the Loon River Cree Nation (the "Nation") to develop
up to 17,120 net acres in the Slave Point light oil play in the Red
Earth area of northwest Alberta;
-- Joint Venture with the Loon River Cree Nation succeeded by the issuance
of a permit to Border by Indian Oil and Gas Canada, with the approval of
Border and the Nation, covering an expanded 29 1/4 sections (18,720
acres) of Slave Point rights incorporating the Alberta Horizontal Oil
New Well Royalty Rate with a 10% minimum;
-- Closed a $25,561,500 bought deal equity financing in the Corporation's
third quarter for the issuance of 93,150,000 common shares of the
Corporation at a price of $0.21 per common share and 24,000,000 flow-
through shares of the Corporation at a price of $0.25 per flow-through
share (resulting in approximately 224.5 million shares currently
outstanding);
-- Appointed Peter Fridrich, P.Geol., as Vice President, Exploration
(formerly Senior Geologist, NW Alberta District, with Penn West
Exploration); and
-- Border commenced drilling its first two Slave Point horizontal wells in
the Red Earth area.
FINANCIAL OVERVIEW
Certain selected financial and operational information for the year ended March
31, 2012 is set out below and should be read in conjunction with the
Corporation's audited consolidated financial statements and related MD&A. The
following table provides a summary of key financial results.
THREE MONTHS ENDED
Financial MARCH 31 YEARS ENDED MARCH 31
2012 2011 2012 2011
---------------------------------------------------------
Petroleum and
natural gas
revenues $ 707,901 $ 277,191 $ 3,324,944 $ 858,750
Funds flow from
operations $ (833,877) $ (510,921) $ (1,841,348) $ (889,484)
per share - basic
and diluted $ (0.00) $ (0.01) $ (0.01) $ (0.03)
Net loss $ (10,758,266) $ (717,162) $ (12,836,158) $ (1,301,488)
per share - basic
and diluted $ (0.05) $ (0.01) $ (0.09) $ (0.05)
Capital
expenditures $ 8,661,986 $ 861,860 $ 34,377,339 $ 3,394,827
Weighted average
shares outstanding
basic and diluted 224,492,821 70,586,293 135,394,501 27,785,400
Operational
Production
Oil and
liquids (bbls/d) 73 36 79 31
Natural
gas (mcf/d) 1,190 25 891 32
Oil
equiavlent (boe/d) 272 40 227 36
Sales price per
unit
Oil and
liquids ($/bbl) 69.42 83.38 80.25 72.43
Natural
gas ($/mcf) 2.27 4.14 3.10 4.16
Oil
equiavlent ($/boe) 28.65 77.34 39.97 65.40
Reserves (Proved
plus probable)
Oil and
liquids (mbbls) 1,820 706
Natural
gas (mmcf) 2,523 33
Oil
equiavlent (mboe) 2,240 712
OUTLOOK
Border has assembled one of the largest contiguous land interests in the
developing Slave Point play with its 18,720 acre permit on the Loon Block. The
Loon Block contains approximately 120 potential locations based on quarter
section spacing which Border operates 100 percent.
Based on the initial results of its first two Slave Point wells as detailed
above, Border is moving forward with its development plan focused exclusively on
its Slave Point light oil opportunities at Red Earth. In this regard, Border
plans to drill one to two more wells over the balance of the year with its next
well planned for this fall. Capital expenditures with respect to the next phase
of development are expected to be funded by cash and funds generated from
current assets.
ANNUAL GENERAL MEETING
Border's Annual General and Special Meeting is scheduled for 10:00 am on
September 13, 2012 at the offices of Burstall Winger LLP, located at 1600, 333 -
7th Avenue S.W., Calgary, Alberta.
Forward-Looking Statements
The forward-looking statements contained in this document are based on certain
key expectations and assumptions made by Border. Although Border believes that
the expectations and assumptions on which the forward-looking statements are
based are reasonable, undue reliance should not be placed on the forward-looking
statements because Border can give no assurance that they will prove to be
correct.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of factors
and risks. These include, but are not limited to, the failure to obtain
necessary regulatory approvals, risks associated with the oil and gas industry
in general (e.g., operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and expenses, and
health, safety and environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or changes in
plans with respect to exploration or development projects or capital
expenditures. A description of assumptions used to develop such forward-looking
information and a description of risk factors that may cause actual results to
differ materially from forward-looking information can be found in Border's
disclosure documents on the SEDAR website at www.sedar.com.
The forward-looking statements contained in this document are made as of the
date hereof and Border undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
BOE
BOEs 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.
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