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Enter Symbol
or Name
USA
CA



Saturn Oil & Gas Inc
Symbol SOIL
Shares Issued 229,376,215
Close 2019-04-18 C$ 0.145
Market Cap C$ 33,259,551
Recent Sedar Documents

Saturn Oil's 2018 P+P reserves at 4,554.9 Mboe

2019-04-18 10:29 ET - News Release

Mr. John Jeffrey reports

SATURN OIL & GAS INC. ANNOUNCES 2018 YEAR-END RESERVES AND 492% INCREASE IN PROVED DEVELOPED PRODUCING RESERVES

Saturn Oil & Gas Inc. has provided results of its independent 2018 year-end reserves evaluation conducted by Ryder Scott Company LP, with an effective date of Dec. 31, 2018.

Throughout 2018, Saturn continued to execute its aggressive growth strategy focused within the prolific and highly economic Viking play in Saskatchewan. Its 2018 capital expenditures program totalled $20.7-million and was directed to the acquisition of 26.3 net sections of land and the drilling and completion of 18 (17 net) Viking light oil wells, including 15 extended reach horizontal (ERH) wells. The success of this program is demonstrated by the significant growth in its reserves base year over year and strong capital efficiencies, which has set the stage for continued expansion and value creation through 2019 and beyond.

Reserves highlights

Through 2018, Saturn achieved record growth in reserves at the fastest pace in the company's history. Following are key reserves highlights as at Dec. 31, 2018, across various reserves categories.

Proved developed producing:

  • 492-per-cent increase over 2017 to 557,100 barrels;
  • 320-per-cent increase on a per-share (basic) basis;
  • 853-per-cent growth in net present value discounted at 10 per cent (before tax) (NPV10) over 2017;
  • Replaced 497 per cent of 2018 annual production;
  • Achieved finding, development and acquisition costs of $44.78 per barrel, including change in future development capital (FDC);
  • Generated a recycle ratio of 0.94 times based on 2018 average operating netbacks of $42.18 per barrel.

Total proved:

  • 323-per-cent increase over 2017 to 2,190,600 barrels;
  • 200-per-cent increase on a per-share (basic) basis;
  • 769-per-cent growth in NPV10 before tax over 2017;
  • Replaced 1,795 per cent of 2018 annual production;
  • Achieved finding, development and acquisition cost of $21.17 per barrel, including change in FDC;
  • Generated a recycle ratio of 1.99 times based on 2018 average operating netbacks.

Total proved plus probable:

  • 467-per-cent increase over 2017 to 4,554,900 barrels;
  • 302-per-cent increase on a per-share (basic) basis;
  • 768-per-cent growth in NPV10 before tax over 2017;
  • Replaced 4,025 per cent of 2018 annual production;
  • Achieved finding, development and acquisition cost of $20.56 per barrel, including change in FDC;
  • Generated a recycle ratio of 2.05 times based on 2018 average operating netbacks.

"I am extremely proud of our achievements in 2018, delivering an unprecedented year of reserves growth across all categories," stated John Jeffrey, chairman and chief executive officer. "These results highlight the depth of our high-value, light oil Viking portfolio in Saskatchewan where we continue to expand our presence. With a strong balance sheet and excellent capital and operating efficiencies to support our inventory of development opportunities, Saturn is in a strong position to continue creating value for our shareholders in 2019 and beyond."

Reserves summary

Year-end 2018 reserves were evaluated by independent reserves evaluator Ryder Scott in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities). A reserves committee, comprising a majority of independent board members, reviews the qualifications and appointment of the independent reserves evaluator and reviews the procedures for providing information to the evaluators. The reserves evaluation was based on Ryder Scott forecast pricing and foreign exchange rates. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without inclusion of any royalty interests) unless noted otherwise. Additional reserves information will be included in Saturn's NI 51-101 forms regarding statement of reserves data and other oil and gas information which will be filed on SEDAR on or before April 30, 2019.

The attached tables outline Saturn's reserves as at Dec. 31, 2018. No provision for interest, risk management contracts, debt service charges, and general and administrative expenses have been made and it should not be assumed that the net present values of the reserves estimated by Ryder Scott represents the fair market value of the reserves.

                                            SUMMARY OF CORPORATE RESERVES

Reserves category                Light and         Heavy    Natural gas     Conventional      Barrels of      Liquids
                                medium oil           oil        liquids      natural gas  oil equivalent        Ratio
                                      (bbl)         (bbl)          (bbl)            (Mcf)           (bbl)          (%)
               
Proved            
Developed producing                557,080            --             --               --         557,080          100
Developed non-producing                 --        63,598             --               --          63,598          100
Undeveloped                      1,285,293       284,632             --               --       1,569,925          100
Total proved                     1,842,373       348,231             --               --       2,190,603          100
Probable                         1,989,976       374,393             --               --       2,364,369          100
Total proved plus probable       3,832,348       722,624             --               --       4,554,972          100

                                       RECONCILIATION OF RESERVES 
 
Factors                                      Total proved      Total probable   Total proved plus probable
                                                     (bbl)               (bbl)                        (bbl)

As of Dec. 31, 2017                               517,800             285,700                      803,500
Acquisitions                                    1,568,430           1,854,600                     3,423030
Dispositions                                           --                  --                           --
Drilling (extensions and improved recovery)       487,000             355,300                      842,300
Discoveries                                            --                  --                           --
Technical revisions                              (330,678)           (132,531)                    (463,209)
Pricing (economic factors)                          2,300               1,300                        3,600
Production                                        (54,249)                  0                      (54,249)
As of Dec. 31, 2018                             2,190,603           2,364,369                    4,554,972

                     NET PRESENT VALUE OF FUTURE REVENUES BEFORE INCOME TAXES

Reserves category                     0%              5%             10%             15%             20%
                                    (000)           (000)           (000)           (000)           (000)
Proved                                                           
Developed producing              $31,354         $25,038         $21,039         $18,353         $16,440
Developed non-producing            2,231           1,810           1,516           1,307           1,152
Undeveloped                       52,767          35,637          24,793          17,598          12,576
Total proved                      86,352          62,485          47,348          37,258          30,169
Probable                         103,925          65,381          44,021          31,118          22,727
Total proved plus probable       190,276         127,866          91,369          68,376          52,896

 
                       FUTURE DEVELOPMENT CAPITAL

Future development costs (000)                    Total          Total proved
                                                 proved         plus probable

2019                                            $24,500               $31,475
2020                                             10,361                34,652
2021                                                549                10,992
2022                                                 --                    --
Remainder                                            --                    --
Total future development costs undiscounted      35,410                77,119

                                                  NET ASSET VALUE

                                                 Proved developed                  Total             Total proved
                                                        producing                 proved            plus probable

NPV10 before tax (000)                                    $21,039                $47,348                  $91,369
Estimated long-term debt, less cash
collateralized letters of credit (unaudited) (000)         (9,603)                (9,603)                  (9,603)
Net asset value (000)                                      11,436                 37,745                   81,766
Basic shares outstanding (000)                            227,963                227,963                  227,963 
Estimated net asset value per share                          0.05                   0.17                     0.36 

                                                  PRICE FORECAST

Year    Exchange rate   WTI at Cushing    Canadian Light Sweet 40 degree API   Western Canada Select 20.5 degree API
           ($Cdn/$U.S.)     ($U.S./bbl)                            ($Cdn/bbl)                              ($Cdn/bbl)

2019           $0.740           $55.50                                $68.24                                  $52.77
2020            0.776            63.00                                 74.72                                   58.84
2021            0.779            66.00                                 78.29                                   62.17
2022            0.783            70.00                                 82.99                                   66.58
2023            0.785            72.00                                 85.33                                   68.77

About Saturn Oil & Gas Inc.

Saturn Oil is a public energy company focused on the acquisition and development of undervalued, low-risk assets. Saturn is driven to build a strong portfolio of cash flowing assets with strategic land positions. Derisked assets and calculated execution will allow Saturn to achieve growth in reserves and production through retained earnings. Saturn's portfolio will become its key to growth and provide long-term stability to shareholders.

We seek Safe Harbor.

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