Peace River Arch - Alberta
Natural Gas & Crude Oil exploration, development and production.
Message: Reserve Additions / Unaudited Financial Results and Operational Update
| February 12, 2009 | ||||
| Birchcliff Energy Ltd. Announces Significant 2008 Reserve Additions, Unaudited Financial Results and Operational Update | ||||
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CALGARY, ALBERTA--(Marketwire - Feb. 12, 2009) - THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. Birchcliff Energy Ltd. ("Birchcliff") (TSX:BIR) is pleased to provide the following update. Birchcliff's annual audit of its financial statements is not yet complete and accordingly all financial amounts referred to in this press release are management's best estimates which have not yet been audited. Birchcliff expects to issue its annual audited financial statements for 2008 in late March, 2009. The reserves contained herein are derived from the reserves evaluation effective December 31, 2008 prepared by AJM Petroleum Consultants ("AJM"). 2008 Highlights - Substantially increased proved and probable reserves to 98.5 million boe at December 31, 2008 from 56.6 million boe at December 31, 2007, an increase of 74%. - Substantially increased its proved reserves to 55.7 million boe at December 31, 2008 from 34.3 million boe at December 31, 2007, an increase of 62%. - Substantially increased its proved plus probable reserves per share at year end 2008 by 46% over December 31, 2007. - Increased its proved reserves per share at year end 2008 by 36% over December 31, 2007. - At December 31, 2008, the net present value of the future net revenue from its proved and probable reserves discounted at 10% before tax is $1.64 billion, a 59% increase from December 31, 2007. In each case calculated using the pre tax present value of proved and probable reserves discounted at 10% based on the then current forecast of commodity prices by AJM. - Estimated net asset value at December 31, 2008 amounted to $11.78 per diluted share, an increase of 54% over December 31, 2007, in each case determined using the net present value of all reserves calculated as above and deducting total debt and assuming exercise of all options and warrants and without including any value for Birchcliff's substantial high working interest, undeveloped land base. - Birchcliff's reserve life index on a proved and probable basis increased to 21.3 years which is an increase from the 2007 reserve life index of 15.5 years. - 2008 average production was 10,148 boe per day, a 51% increase over 2007 average production of 6,711 boe per day. - 2008 Finding, Development and Acquisition costs on a proved and probable basis were $5.17/boe excluding future development costs and $14.06/boe including future development costs. - 2008 Finding and Development costs excluding acquisitions on a proved and probable basis were $4.99/boe excluding future development costs and $13.98/boe including future development costs. - Based on 2008 Finding and Development costs, Birchcliff had a proved plus probable operating netback recycle ratio in 2008 of 8.5, excluding future capital and 3.1, including future capital as estimated by AJM Petroleum Consultants. - Birchcliff increased by 199% its Montney/Doig proved and probable reserves to 57.7 mmboe at December 31, 2008 from approximately 19.3 mmboe at December 31, 2007. - Birchcliff increased by 16% its Worsley Light Oil pool proved and probable reserves to 24.6 mmboe at December 31, 2008 from 21.2 mmboe at December 31, 2007. - From the effective date of its acquisition of the Worsley Light Oil pool at July 1, 2007 Birchcliff has increased the proved and probable reserves to 24.6 mmboe from 15.1 mmboe, a 63% increase. FOURTH QUARTER RESULTS - December 2008 average production was 13,043 boe per day an increase of 24% over December 2007 average production of 10,507 boe per day. - 2008 fourth quarter average production was 11,524 boe per day, a 24% increase over 2007 fourth quarter average production of 9,260 boe per day. - Drilling results for the fourth quarter included the drilling of 13 (10.61 net) wells, 7 (6.17 net) oil wells, 6 (4.44 net) gas wells with no dry holes. 2008 Reserves Evaluation and Finding and Development Costs Birchcliff has had its reserves evaluated effective December 31, 2008 by AJM Petroleum Consultants ("AJM"), an independent qualified reserves evaluator, in accordance with National Instrument 51-101. In its evaluation report dated February 10, 2009 (the "AJM Evaluation"), AJM has estimated that as at December 31, 2008, Birchcliff has 55,671 mboe of proved reserves and 98,521 mboe of proved and probable reserves, of which 30% is light oil and NGL's and 70% is natural gas. AJM relied upon its own forecast of commodity prices which can be found at www.ajmpetroleumconsultants.com. AJM's Evaluation estimates Birchcliff's reserves and pre-tax discounted future net revenues as follows (based on forecast prices and costs) (1): ----------------------------------------------------------------------------
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NPV 0% NPV 5% NPV 8% NPV 10%
Mboe (MM$) (MM$) (MM$) (MM$)
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Proved Developed Producing 19,066 777 603 534 497
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Total Proved 55,671 1,992 1,373 1,141 1,019
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Probable 42,850 1,876 1,008 744 620
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Total Proved and Probable 98,521 3,868 2,382 1,885 1,639
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(1) Note: NI 51-101 disclosure requires Birchcliff to provide the following
warning - The estimates of discounted future net revenues
disclosed in this table do not represent fair market values.
Total proved reserves grew by 62% to 55,671 mboe at December 31, 2008, which is an increase of 36% in reserves per share from 2007 using basic shares outstanding at each year end. Total proved plus probable reserves increased by 12.3 boe for each boe that was produced during 2008 (1,128% reserve replacement on a total proved plus probable basis). The proved reserves per basic share increased 36% at December 31, 2008 as compared to December 31, 2007. The proved plus probable reserves per basic share increased 46% at December 31, 2008 as compared to December 31, 2007. The net present value of total proved plus probable reserves, amounted to $1.6 billion, an increase of 59% year over year. The net present value of total proved reserves amounted to $1.0 billion, an increase of 45% year over year. Each of these amounts are calculated using the pre-tax present value of the reserves estimated by AJM discounted at 10% based on the then current forecast of commodity prices by AJM and without including any value for Birchcliff's substantial high working interest, undeveloped land base. During 2008, Birchcliff spent approximately $225.3 million on exploration and development and $10.4 million on net acquisitions. Birchcliff estimates its finding and development costs as follows: ----------------------------------------------------------------------------
Three
FD&A Costs Excluding Future Year
Development Capital 2008 2007 2006 Average
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F&D - Exploration and Development -
Proved $ 9.09 $ 6.92 $ 34.46 $ 10.36
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F&D - Exploration and Development -
Proved and Probable $ 4.99 $ 5.07 $ 10.57 $ 5.77
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Acquisitions - Proved $ 37.11 $ 24.12 $ 62.51 $ 24.49
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Acquisitions - Proved and Probable $ 21.59 $ 17.83 $ 47.28 $ 17.99
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FD&A - Total - Proved $ 9.40 $ 15.46 $ 35.05 $ 13.59
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FD&A - Total - Proved and Probable $ 5.17 $ 11.38 $ 10.72 $ 8.01
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FD&A Costs Including Future
Development Capital (1)
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F&D - Exploration and Development -
Proved $ 20.17 $ 17.04 $ 47.44 $ 21.30
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F&D - Exploration and Development -
Proved and Probable $ 13.98 $ 12.03 $ 20.39 $ 14.42
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Acquisitions - Proved $ 37.11 $ 26.44 $ 62.51 $ 26.76
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Acquisitions - Proved and Probable $ 21.59 $ 20.96 $ 47.28 $ 21.02
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FD&A - Total - Proved $ 20.36 $ 21.71 $ 48.11 $ 22.56
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FD&A - Total - Proved and Probable $ 14.06 $ 16.45 $ 20.56 $ 15.63
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(1) Includes the increase for 2008 of $405.3 million in future development
capital from the 2007 amount of $311.9 million.
Based on Birchcliff's estimated average 2008 operating netback of $42.65 per boe and including capital spent in 2008 ($235.7 million) for exploration, development and acquisition spending, Birchcliff has a proved plus probable recycle ratio of 8.3 excluding future capital and 3.0 including future capital. This recycle ratio is calculated in each case by dividing the average 2008 operating netback per boe by total finding, development and acquisition costs per boe. The recycle ratio calculated by dividing the average 2008 operating netback per boe by proved plus probable finding and development costs per boe relating to only exploration and development capital is 8.5, excluding future capital and 3.1, including future capital. The recycle ratio calculated by dividing the average 2008 cash flow of $35.40 per boe by proved plus probable finding and development costs per boe relating to only exploration and development capital is 7.1 excluding future capital and 2.5, including future capital. Birchcliff has a proved and probable reserve life index of 21.3 years versus 15.5 years in 2007 and a proved reserve life index of 12.0 years versus 9.4 years in 2007. This 2008 reserve life index was calculated by dividing the aggregate proved and probable reserves by an estimated average daily production rate of approximately 12,700 boe per day which is the estimated average daily production rate for January 2009. MONTNEY/DOIG NATURAL GAS RESOURCE PLAY RESERVE DETAILS Birchcliff increased by 199% its Montney/Doig reserves to 57.7 mmboe at December 31, 2008 from approximately 19.3 mmboe at December 31, 2007. The following table sets forth reserves data attributable to Birchcliff's horizontal wells on the Montney/Doig resource play, the horizontal wells to which reserves were attributed and the future capital associated with such reserves: ----------------------------------------------------------------------------
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Horizontal
Natural Well
Natural Gas Locations Net Future
Gas Liquids Total -------------- Capital
(Bcf) (mbbl) (mboe) Gross Net ($millions)
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Proved
Developed
Producing 27.2 253.1 4,779.7 17 14.9 0
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Total
Proved 157.6 1,441.0 27,707.8 104 86.4 354.6
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Proved and
Probable 314.3 2,848.1 55,225.0 145 120.7 525.4
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As at December 31, 2008, the Montney/Doig Play reserve bookings include 67.5 sections of land (56.7 net) and 128 gross horizontal locations (105.7 net), up from 35 gross horizontal locations (26.4 net) in 2007. The AJM Evaluation attributes to each of these 105.8 net future horizontal well locations on average, 2.8 Bcf of proved and probable natural gas reserves at an average gross capital cost of $5 million per well. However, Birchcliff believes that it will eventually drill an average of 4 horizontal wells per section assuming an interwell spacing of 400 metres. Birchcliff has in excess of 99.2 net sections of trend land for which no Montney/Doig reserves have been included in the AJM Evaluation. Assuming an average of 4 wells per section and that the Montney/Doig play extends under these lands, they will provide Birchcliff with an inventory of up to 396 Montney/Doig horizontal locations which over time Birchcliff believes will be assigned the same or greater reserve bookings as Birchcliff is receiving in the AJM Evaluation. Trend land is land which Birchcliff believes has a high likelihood of extending the Montney/Doig natural gas resource play based on technical information including geological and geophysical data. WORSLEY LIGHT OIL RESOURCE PLAY RESERVE DETAILS Birchcliff is pleased to report that the Worsley pool continues to prove itself as a grade A asset. Both the original oil in place and the estimated recoverable reserves for the pool continue to grow. As of December 31, 2008, reserves booked to the Worsley Light Oil pool are 6,395 mboe proved developed producing, 17,516 mboe proved, and 24,597 mboe proved plus probable. Comparable reserves booked at December 31, 2007 were 6,018 mboe proved developed producing, 15,043 mboe proved, and 21,189 mboe proved plus probable. This continues the growth trend for the Worsley reserves since the effective date of the acquisition on July 1, 2007, when the recoverable reserves were estimated at 11,300 mboe proved, and 15,100 mboe proved plus probable. At the time of the acquisition Birchcliff estimated the pool to have in excess of 124 million barrels of light oil in place. Largely as a result of the successful delineation drilling and additional geological work, our estimate now is in excess of 203 million barrels of original light oil in place. 2008 UNAUDITED FINANCIAL & OPERATING RESULTS ---------------------------------------------------------------------------- Summary Financial Data $ (millions) ---------------------------------------------------------------------------- 2008 Total Capital Expenditures $ 237.1 ---------------------------------------------------------------------------- 2008 Finding and Development Capital $ 225.3 ---------------------------------------------------------------------------- 2008 Net Acquisition Capital $ 10.4 ---------------------------------------------------------------------------- 2008 Administrative Assets $ 1.4 ---------------------------------------------------------------------------- 2008 Year End Bank Debt Not including working capital deficiency $ 211.6 ---------------------------------------------------------------------------- 2008 Year End Total Debt Including working capital deficiency $ 249.9 ---------------------------------------------------------------------------- The 2008 average production rate was approximately 10,148 boe per day which represents an increase of approximately 51% over the 2007 average production rate of 6,711 boe per day. 2008 fourth quarter average production was 11,524 boe per day, which is a 15% increase from the 2008 third quarter average production of 10,000 boe per day and a 24% increase over the 2007 fourth quarter average production of 9,260 boe per day. 2008 fourth quarter average production per weighted average million shares was 102.5 boe per day, which is a 15% increase from the 2008 third quarter weighted average production per million shares of 89 boe per day and a 5% increase over the 2007 fourth quarter average production per million shares of 98 boe per day. December 2008 average production was 13,043 boe per day an increase of 24% over December 2007 average production of 10,507 boe per day. 2008 Cash Flow Cash flow for the fourth quarter 2008 was approximately $24.6 million or $0.22 per share. This is a 35% decrease compared to cash flow for the third quarter 2008 of $37.9 million or $0.34 per share and an increase of 24% over the fourth quarter 2007 cash flow of $19.9 million or $0.21 per share. Cash flow for the 2008 year was approximately $131.5 million or $1.21 per share. This represents a 134% increase over the 2007 cash flow of $56.2 million or $0.78 per share. For 2008, the operating netback was $65.36 per boe for oil, $32.13 per boe for natural gas and $52.11 per boe for natural gas liquids for an average of $42.65 per boe. All these net backs are calculated by subtracting royalty expense and allocated operating and transportation costs from net sales revenues plus royalty income for each product. 2008 Year End Debt and Capitalization At December 31, 2008, Birchcliff's bank credit facilities were drawn to approximately $211.6 million from available credit facilities of $240 million. Birchcliff's working capital deficiency was $38.3 million at December 31, 2008. Birchcliff is in compliance with all its covenants under its credit facilities and its working capital deficiency does not reduce what Birchcliff can draw under its credit facilities. With the addition of our significant year end reserves, Birchcliff has requested increased credit facilities from its bank syndicate which will provide Birchcliff with increased financial flexibility. We expect the bank syndicate to respond to this request by the end of March. In addition, as outlined below in light of industry conditions, Birchcliff will spend less than its currently estimated cash flow in the first half of 2009 and intends to further review its remaining 2009 capital spending programs in late May or June in light of then current economic conditions. Birchcliff's currently estimated cash flow for the first half of 2009 is based on its internally projected production profile and a US$ WTI oil price of $47.50 per barrel, a CAN$ AECO natural gas price of $6.25/mmbtu and US$ 0.85 Canadian dollar. At December 31, 2008, Birchcliff had 112,395,970 common shares outstanding and 121,659,923 diluted common shares. 2008 Drilling During 2008, Birchcliff drilled 59.0 (53.78 net) wells; all were cased except for 1 (1.0 net) dry hole. Birchcliff's 2008 drilling program, which offered a mixture of moderate to high impact development and exploration prospects focused on our two resource plays, the Montney/Doig natural gas resource play and the Worsley light oil resource play. Birchcliff successfully drilled and completed 15.0 (12.9 net Montney/Doig horizontal natural gas wells during 2008. On average, these wells continue to exceed Birchcliff's production and reserve expectations. Birchcliff has an inventory of up to 623 Montney/Doig horizontal natural gas well locations on approximately 155.9 net sections of land that is either proven or trend, assuming an average of 4 wells per section based on an inter-well spacing of 400 metres. It is noteworthy that 24 (20.76 net) wells of the 59.0 (53.78 net) wells Birchcliff drilled in 2008 were exploratory. Most notable were new pools discovered in the Montney and in the Doig. This has resulted in substantial proved and probable reserve additions and contributed to the significant increase in Birchcliff's net undeveloped land base. Birchcliff has aggressively acquired land around its exploration successes and this has provided Birchcliff with a large portfolio of additional drilling locations for 2009 and beyond. 2008 Land Birchcliff's undeveloped land base at December 31, 2008 consisted of 348,249 net undeveloped acres. This is a 30% increase over its 2007 year end net undeveloped land base of 266,966 net acres. Further, this is essentially a 464% increase over the 75,000 net undeveloped acres it acquired in the significant Peace River Arch area acquisition it completed on June 1, 2005. Birchcliff's land base consists of large contiguous blocks of high working interest acreage located near facilities owned and/or operated by Birchcliff or near third party infrastructure. A significant amount of the land purchased is a direct result of exploration and development success by Birchcliff in the Peace River Arch. Most of the new land has been purchased without partners at 100% working interest. Montney/Doig Natural Gas Resource Play Update Industry success in the Montney/Doig natural gas resource play continues to generate considerable attention and interest. Significant increases in estimates of original gas in place (OGIP), and technical advancements enhancing exploitation of unconventional gas resources have been reported by industry in general and specifically for the Montney/Doig play. Furthermore, industry operators have reported operational and economic successes related to the "shales" of the Montney/Doig, including the organic rich Doig Phosphate. These advancements and successes have lead to increased OGIP assessments, increased productivity, reserves and improved project economics. The Montney/Doig natural gas resource play consists of reservoirs in tight sands, siltstones and shales. Birchcliff continues to evaluate the resource and reserve potential of these reservoirs on its lands and areas of interest. Birchcliff is continuing to conduct a number of integrated studies including, hydrodynamics, rock properties, fracture treatment modeling, micro-seismic, petrophysics and geochemistry. Birchcliff believes that this work coupled with state of the art drilling, completions and production practices has the potential to significantly increase Birchcliff's production and ultimate reserves from this complex Montney/Doig resource play. We are pleased to announce that, through Crown land sales, drilling and completion results, and updated evaluation, Birchcliff has increased its proven and trend acreage on the Montney/Doig natural gas resource play. Since December 31, 2007 we have increased our proven land to 56.7 net sections from 28.8 net sections, (proven land being land to which AJM has allocated reserves for the Montney/Doig resource play) and increased our trend land to 99.2 net sections from 20.0 net sections, (trend land being lands Birchcliff believes has a high likelihood of extending the Montney/Doig natural gas resource play based on technical information including geological and geophysical data). Assuming an average of 4 wells per section based on an inter-well spacing of 400 metres, that represents an inventory in excess of 623 net potential horizontal drilling locations (up from 195 net at December 31, 2007) of which 17 (14.9 net) horizontal wells have been drilled to date. Most of our capital and efforts on the Montney/Doig have been focused on the Basal Doig and Upper Montney zones. In a continued effort to expand the stratigraphic potential of the Montney/Doig interval on Birchcliff lands in 2008, Birchcliff has drilled 2 vertical and 2 horizontal wells in the Middle/Lower Montney stratigraphic interval. Both of these horizontal wells in the Middle/Lower Montney are now on production and continue to meet our expectations. Birchcliff and other industry competitors believe that the Middle/Lower Montney reservoir characteristics are similar to the Basal Doig and Upper Montney producing zones, including the potential for 4 horizontal gas wells per stratigraphic section for each section of land based on an inter-well spacing of 400 metres. These successful wells in these stratigraphic zones have increased the scope and depth of drilling opportunities on Birchcliff lands. Worsley Light Oil Resource Play Update Birchcliff has drilled 31 gross (31.0 net) light oil wells at Worsley during 2008. Of the wells drilled, 23 were vertical and 8 were horizontal, all of which were cased. In addition to the infill drilling, our drilling program was very successful in delineating extensions to the pool to the south and the north which increased Birchcliff's estimate of original oil in place. Recently Birchcliff completed a 15 square mile 3-D seismic program. The 3-D program has multiple purposes, including, increasing the knowledge of the geometry of the pool, identifying infill and delineation drilling locations as well as evaluating a number of geological exploration prospects of new stratigraphic intervals. Since purchasing the Worsley asset Birchcliff has significantly expanded the waterflood drilling one for-purpose injection well and converting seven other producers to injectors. Activities bring about a third of the total Birchcliff owned portion of the Worsley light oil pool under waterflood. To date the waterflood response has exceeded expectations and Birchcliff is committed to further expansion of the waterflood. 2009 Capital Budget Birchcliff's 2009 capital budget has initially been set at $80 million, the majority of which is focused on the continued development of its Montney/Doig natural gas resource play. Birchcliff expects to spend approximately $27.2 million in the first six months of 2009, which is less than currently estimated cash flow and only 34% of its 2009 capital budget. This capital program is designed to extend the tenure of expiring land so that Birchcliff will not lose any lands to which it allocates significant value. Birchcliff is expecting to reduce its debt in the first half of the year assuming an average AECO natural gas price of CDN $6.25/mmbtu, a WTI oil price of US$47.50 per barrel and a Canadian dollar at US$0.85. Birchcliff will re-evaluate its 2009 second half capital spending late in the second quarter of 2009. As noted above, in 2009, Birchcliff plans to continue with its strategy of expanding the Montney/Doig play and building out the infrastructure, with significant capital going to vertical and horizontal wells on lands to which no reserves have yet been attributed in the AJM Evaluation. This will result in the addition of new low cost reserves and continued growth for the company during 2009. The 2009, $80 million capital budget envisages drilling 14 (12.2 net) wells with the related infrastructure. A significant percentage of the capital will be allocated to the Montney/Doig natural gas resource program including 9 (7.8 net) horizontal wells and 3 (2.4 net) vertical exploration wells. Budget plans for our second resource play, the Worsley light oil program, include capital to prove further development and exploitation potential of the pool by drilling 2 (2.0 net) horizontal wells in 2009 as well as capital to support expansion of the waterflood. The third major component of the budget is land and seismic seed capital that will be used to secure future growth of our drilling opportunities. Birchcliff has also budgeted to perform a number of re-entry and recompletions of bypassed pay in existing wells, in an effort to optimize production and infrastructure. 2009 Production Notwithstanding severe weather conditions, and the associated down time of wells and gas plants, production averaged approximately 12,700 boe per day in January, 2009, a 28% increase from January 2008. Current production is approximately 12,860 boe per day. In light of our capital spending program, Birchcliff expects to maintain a relatively flat production profile, averaging approximately 12,000 BOE per day in 2009 which would be an 18% increase over average production for 2008. 2009 First Quarter Operations Update Birchcliff is continuing to develop the Worsley waterflood by tying in a number of injector wells that were drilled or converted from producers in 2008. To date in 2009, Birchcliff has drilled and cased 1.0 (0.7 net) successful Montney/Doig horizontal well which is standing waiting on completion. Currently, Birchcliff has 1 drilling rig working, drilling a vertical Montney/Doig exploration well. Birchcliff plans to drill in total 2 (1.4 net) horizontal Montney/Doig natural gas wells and 3 (2.4 net) vertical Montney/Doig exploration wells in the first half of the year. Outlook Birchcliff has established two low cost resource plays. The 2008 reserve additions prove that Birchcliff has the ability to add low cost reserves and production on a repeatable basis. We have a reserve life index on a proved and probable basis of 21.3 years. In the short term Birchcliff is facing very weak commodity prices and we will have to manage our capital carefully and ensure that the capital spending does not exceed its cash flow. In general we intend to be patient and to conservatively manage our way through a difficult time in the oil and gas business with a longer term view of maximizing value for all of our stakeholders. Advisory Unaudited Numbers: Birchcliff's annual audit of its financial statements is not yet complete and accordingly all financial amounts referred to in this press release are management's best estimates which have not yet been audited. Finding and Development Costs: With respect to disclosure of finding and development costs disclosed above: (a) The amounts of 2008 finding and development and/or acquisition costs contained in the table set forth above are calculated by dividing the total of the particular costs noted in each line incurred during 2008 by the amounts of additions to proved reserves and proved and probable reserves during 2008 that resulted from the expenditure of such costs during 2008 which are based upon the AJM Evaluation. (b) In calculating the amounts of finding and development and/ or acquisition costs, the change during the year in estimated future development costs is based upon the evaluations of Birchcliff's reserves prepared by AJM Petroleum Consultants effective December 31, 2007, and December 31, 2008; and (c) National Instrument 51-101 requires the inclusion of the following warning statement: The aggregate of the exploration and development costs incurred in the most recent financial year and any change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. Reserves For Portion of Properties: With respect to the disclosure of reserves contained herein relating to portions of Birchcliff's properties, the estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenues for all properties due to the effects of aggregation. BOE Conversions: The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent ("6:1"). A boe conversion ratio of 6:1 is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Forward Looking Statements: This document contains forward-looking statements regarding the business and operations of Birchcliff Energy Ltd. All statements other than statements of historical fact contained here are forward-looking statements under applicable securities law. In particular statements as to recoverable reserves volumes and associated future net revenues and numbers of future wells that may be drilled are forward looking statements. These forward looking statements are based upon various assumptions as to future commodity prices, currency exchange rates, inflation rates, future well production rates, well drainage areas, success rates of future well drilling and future costs and availability of labour and services. With respect to estimates of reserves volumes and associated future net revenues and numbers of future wells to be drilled a key assumption is the validity of the commodity prices, currency exchange rates, future capital and operating costs and well production rates forecast by AJM in the AJM Evaluation. With respect to the number of future wells to be drilled another key assumption is the validity of the geological and other technical interpretations that have been performed by Birchcliff's technical staff and which indicate that commercially economic reserves can be recovered from Birchcliff's lands as a result of drilling such future wells. There can be no assurance that the plan, intentions or expectations upon which these forward looking statements are based on will occur. In addition, all such forward-looking information necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Birchcliff is a publicly traded company that trades on the TSX Exchange under the symbol "BIR". |
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