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Enter Symbol
or Name
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Terra Energy Corp
Symbol TT
Shares Issued 106,663,422
Close 2015-03-31 C$ 0.085
Market Cap C$ 9,066,391
Recent Sedar Documents

Terra Energy ends 2014 with 14.78 mmboe P+P

2015-04-01 06:23 ET - News Release

Mr. Bud Love reports

TERRA ENERGY ANNOUNCES 2014 YEAR-END RESERVES EVALUATION AND RELATED METRICS

Terra Energy Corp. has released the results of its year-end reserves evaluation, as prepared by GLJ Petroleum Consultants Ltd., as at Dec. 31, 2014. This evaluation was performed in accordance with the requirements of National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities. In addition, the company has released the results of its independent valuation of undeveloped lands, as prepared by Seaton-Jordan & Associates Ltd. as at Dec. 31, 2014.

Summary

The rapid decline in commodity pricing experienced by the industry has had a significant impact on the valuation of the company reserves at Dec. 31, 2014, and the company's ability to replace those reserves during the year. The following are reserves evaluation highlights for year-end 2014, comparing results as at Dec. 31, 2014, and those as at Dec. 31, 2013:

  • Total proved and probable reserves decreased 2,579,000 barrels of oil equivalent or 15 per cent from 17.36 million barrels of oil equivalent to 14,781,000 barrels of oil equivalent, inclusive of 1,308,000 barrels of oil equivalent produced during the year.
  • Net present value (before tax) of total proved and probable reserves (NPV 10 per cent) decreased from $175.6-million as at Dec. 31, 2013, by 34 per cent to $115.4-million as at Dec. 31, 2014.
  • Total proved reserves decreased 18 per cent from 11,698,000 barrels of oil equivalent to 9,624,000 barrels of oil equivalent.
  • Reserve life index calculated at year-end 2014 is 7.4 years on total proved reserves and 11.3 years on total proved and probable reserves, using average daily production from the fourth quarter 2014 of 3,584 barrels of oil equivalent per day.
  • NAV per share as at Dec. 31, 2014, is estimated at approximately $1.11 basic and $1.05 diluted.

Oil and gas reserves

The tables summarize certain information contained in the GLJ report effective Dec. 31, 2014. Detailed reserves information as required under National Instrument 51-101 will be included in Terra's annual information form which has been be filed on SEDAR. Oil equivalent amounts have been calculated using a conversion rate of 6,000 cubic feet of natural gas to one barrel of oil.

                           RECONCILIATION SUMMARY
                                  (mboe)                 
                                                               Total proved 
                             Proved                Probable   plus probable 
                                                                            
Opening -- Dec. 31, 2013     11,697                   5,663          17,360 
Technical revisions            (631)                   (733)         (1,363)
Drilling extensions             260                     163             423 
Improved recovery                45                       7              51 
Acquisitions                      3                       -               3 
Economic factors               (443)                     56            (387)
Current year production      (1,308)                      -          (1,308)
                            --------                 -------        --------
Closing -- Dec. 31, 2014      9,624                   5,156          14,781 

                        SUMMARY OF RESERVES BY CATEGORY
                          
                       Dec. 31, 2013,             Dec. 31, 2014
                               total       Oil    Natural  Liquids    Total      
                               (mboe)    (mbbl) gas (mmcf)   (mbbl)   (mboe)  
                                                                      
Reserves category
Proved producing               7,781       863     29,540      538    6,324  
Proved non-producing           3,917       924     13,090      195    3,300  
                              ------     -----     ------    -----   ------
Total proved                  11,698     1,787     42,630      733    9,624  
Total probable                 5,663     1,275     21,338      325    5,156  
                              ------     -----     ------    -----   ------
Total proved plus probable    17,360     3,062     63,968    1,058   14,781  

The estimated future net revenues are presented before deducting future estimated site restoration costs and are reduced for future abandonment costs and estimated future capital for future development associated with non-producing, undeveloped and probable additional reserves.

SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE ($000S) 
             DISCOUNTED BEFORE INCOME TAXES

                                Dec. 31, 2013   Dec. 31, 2014        
                                  0%      10%       0%      10%     
Reserves category
Proved producing            $128,708 $ 84,713 $ 75,419 $ 47,337     
Proved non-producing          61,749   39,620   54,673   29,134     
                            -------- -------- -------- --------
Total proved                 190,457  124,332  130,091   76,470     
Total probable               108,231   51,290   91,863   38,965     
                            -------- -------- -------- --------
Total proved plus probable  $298,688 $175,622 $221,953 $115,435     

     FORECAST PRICES USED IN THE GLJ REPORT 

Year         Dec. 31, 2013,         Dec. 31, 2014,
                evaluation             evaluation           
AECO ($/mmBtu)
2015                 $4.03                  $3.31              
2016                 $4.26                  $3.77              
2017                 $4.50                  $4.02              
2018                 $4.74                  $4.27              
2019                 $4.97                  $4.53              
WTI (U.S.$/bbl)                                                                        
2015                $97.50                 $62.50             
2016                $97.50                 $75.00             
2017                $97.50                 $80.00             
2018                $97.50                 $85.00             
2019                $97.50                 $90.00             

Note: Inflation is accounted for at 2.0 per cent 
per year.

Land valuation

Terra's gross undeveloped landholdings decreased from 462,693 gross acres (311,921 net) as at Dec. 31, 2013, to 358,529 gross acres (217,905 net) as at Dec. 31, 2014, representing a decrease of 23 per cent (30 per cent net). The decrease was largely attributable to undeveloped land expiring and being sold by the company.

 SUMMARY OF THE COMPANY'S UNDEVELOPED LANDHOLDINGS BROKEN DOWN BY PROVINCE

                         Dec. 31, 2013                   Dec. 31, 2014          
                  Gross acreage    Net acreage  Gross acreage    Net acreage

Alberta                 206,191        159,764        122,675         83,822
British Columbia        256,095        152,117        235,327        133,938
Saskatchewan                406             40            527            145
                        -------        -------        -------        -------
Totals                  462,693        311,921        358,529        217,905

                                      Undeveloped land values                
                                          2013                          2014        

Alberta                       $     12,453,639              $      7,269,808        
British Columbia              $     20,909,598              $     19,163,427        
Saskatchewan                  $         15,403              $         44,181        
                              ----------------              ----------------        
Totals                        $     33,378,640              $     26,477,416        

The undeveloped landholdings of the company were evaluated as at Dec. 31, 2014, by Seaton-Jordan. The value of Terra's net undeveloped landholdings is estimated to be approximately $26.5-million as at Dec. 31, 2014. This valuation represents a decrease of 21 per cent compared with last year's valuation of undeveloped land as prepared by Seaton-Jordan.

                     NAV PER SHARE AS AT DEC. 31, 2014
             (in thousands of dollars, except per share amounts)

                                                     2013              2014 
                                                                            
P+P reserves (NPV 10%)                   $        175,622  $        115,436 
Undeveloped land (1)                     $         33,379  $         26,477 
Net debt                                 $        (20,982) $        (23,173)
Net asset value                          $        188,019  $        118,740 
Shares outstanding                                101,663           106,663 
Basic NAV per share                      $           1.85  $           1.11 
Option and warrant value                 $          4,316  $          2,573 
Option and warrant shares                           4,795             9,355 
                                         ----------------- -----------------
Diluted net asset value                  $        192,335  $        121,313 
Diluted shares outstanding                        106,458           116,018 
Fully diluted NAV per share              $           1.81  $           1.05 

(1) Based on Dec. 31, 2013 and 2014, Seaton-Jordan reports.

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