CALGARY, AB, Feb. 13, 2025 /CNW/ - Bonterra Energy Corp. (TSX: BNE) ("Bonterra" or the "Company") is pleased to announce the summary results of its independent reserve report (the "Sproule Report") prepared by Sproule Associates Limited ("Sproule") with an effective date of December 31, 2024. The Company has not released its audited 2024 financial results, and therefore the financial figures provided herein are unaudited estimates.
Bonterra Energy logo (CNW Group/Bonterra Energy Corp.)
The Sproule Report reflects the success of the 2024 capital program driven by the integration of the Company's new core area in the Charlie Lake and its emerging Montney resource play. Strong performance across the Company's asset base led to barrel-of-oil-equivalent ("BOE") reserve growth across all major reserves categories. The efficiency of the capital program is evident in lower finding and development ("F&D") costs per BOE compared to 2023, contributing to stronger recycle ratios despite lower commodity prices. These achievements underscore Bonterra's focus on disciplined, returns-focused capital allocation through its strong and predictable Cardium assets as well as its high impact Charlie Lake and Montney plays.
The following provides a summary of specific details from the Sproule Report, which was prepared following the guidelines, criteria, and methodologies outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Further reserves-related information, as mandated by NI 51-101, will be incorporated into Bonterra's Annual Information Form, to be filed on the Company's profile at www.sedarplus.ca no later than March 31, 2025.
2024 RESERVES HIGHLIGHTS
Replaced130 percent of 2024 production on a PDP basis, 189 percent on a 1P basis and 198 percent on a 2P basis
Reserves increased across all categories:
5% increase - Proved Developed Producing ("PDP") reserves of 34.4 million BOE
6% increase - Total Proved ("TP") reserves of 84.9 million BOE
5% increase - Total Proved Plus Probable ("TPP") reserves of 106.1 million BOE
TPrepresented 80 percent of total TPP in 2024, consistent with 80 percent in 2023, showcasing the predictable and low-risk nature of Bonterra's asset base.
Net present valueof future net revenue discounted at 10 percent (before tax) for TPP totaled $1.4 billion, while TP totaled $1.0 billion and PDP totaled $572.1 million.
Recycle ratio1 including FDC of 1.6 times on TP reserves, 1.5 times on TPP reserves and a recycle ratio excluding FDC of 2.7 times on TP reserves and 2.4 on TPP reserves.
Future Development Capital ("FDC") for TP is forecast to be $786 million, an increase of ten percent or $71 million compared to 2023 TP FDC of $716 million, due to the addition of the two emerging plays and price inflation.
Reserve Life Index ("RLI")2 for TPP, TP, and PDP of approximately 19.5 years, 15.6 years and 6.3 years, respectively (based on 2024 average production of 14,846 BOE per day), thereby providing a lengthy development runway for Bonterra's future.
_______________________________
1 Recycle ratio is defined as field netback per BOE divided by F&D costs on a per BOE basis, see "Information Regarding Oil and Gas Disclosure". Field netback is a Non-IFRS Measure, see "Use of Non-IFRS Measures."
Summary of Gross Oil and Gas Reserves as of December 31, 2024
Light and Medium Crude Oil
Conventional Natural Gas
Natural Gas Liquids
Oil Equivalent
Future Development Capital
(MBbl)
(MMcf)
(MBbl)
(MBoe)
($000s)
Proved
Developed Producing
16,218.0
88,641
3,394.1
34,385.6
Developed Non-Producing
2,144.4
7,254
279.6
3,633.0
5,801
Undeveloped
23,076.0
118,684
4,121.7
46,978.4
780,568
Total Proved
41,438.3
214,579
7,795.5
84,997.1
786,369
Total Probable
10,286.0
53,211
1,918.6
21,073.1
5,082
Total Proved plus Probable
51,724.3
267,790
9,714.1
106,070.2
791,451
Reconciliation of Company Gross Reserves by Principal Product Type as of December 31, 2024
Light & Medium Crude Oil
Conventional Natural Gas
Natural Gas Liquids
Oil Equivalent
Total Proved
Proved + Probable
Total Proved
Proved + Probable
Total Proved
Proved + Probable
Total Proved
Proved + Probable
(MBbl)
(MBbl)
(MMcf)
(MMcf)
(MBbl)
(MBbl)
(Mboe)
(Mboe)
Opening Balance December 31, 2023
42,205
53,155
184,761
231,737
7,142
8,969
80,141
100,747
Extensions
1,719
2,164
25,077
31,625
685
863
6,584
8,298
Acquisitions
1,237
1,594
12,458
16,120
249
322
3,563
4,603
Economic Factors
146
35
(873)
(1,102)
(32)
(40)
(32)
(189)
Technical Revisions
(1,439)
(2,793)
7,857
4,110
304
153
175
(1,955)
Production
(2,430)
(2,430)
(14,700)
(14,700)
(554)
(554)
(5,434)
(5,434)
Closing Balance December 31, 2024
41,438
51,724
214,580
267,790
7,796
9,714
84,997
106,070
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1 "Reserve life index" does not have a standardized meaning. See "Information Regarding Oil and Gas Disclosure" contained in this news release.
Summary of Net Present Values of Future Net Revenue as of December 31, 2024
($M)
Net Present Value Before Income Taxes Discounted at (% per year)
Reserves Category:
0 %
5 %
10 %
15 %
Proved
Producing
930,846
707,085
572,134
483,891
Non-Producing
91,930
66,114
50,405
40,096
Undeveloped
995,773
617,634
403,117
273,456
Total Proved
2,018,549
1,390,833
1,025,656
797,443
Probable
768,399
476,725
336,627
257,341
Total Proved plus Probable
2,786,948.0
1,867,558
1,362,283
1,054,784
FUTURE DEVELOPMENT CAPITAL, F&D COSTS6 AND RECYCLE RATIOS6
FDC reflects Sproule's best estimate of the costs to bring Bonterra's proved and probable developed and undeveloped reserves on production. Changes in forecasted FDC occur annually because of development activities, acquisition and disposition activities, changes in capital cost estimates based on improvements in well design and performance, changes in service costs and changes to cost estimates for capital activities that do not directly drive additions in reserves or production.
Over the past three years, Bonterra has incurred the following finding, development and acquisition ("FD&A")6 and finding and development ("F&D")6 costs both excluding and including FDC:
TP Reserves Net Additions
TPP Reserves Net Additions
2024
2023
2022
3 Yr Avg 4
2024
2023
2022
3 Yr Avg 4
FD&A Costs per BOE 1,2,3,6
Including FDC
$ 17.81
$ 39.08
$ 24.85
$ 25.31
$ 18.33
$ 34.16
$ 23.34
$ 23.55
Excluding FDC
$ 10.45
$ 27.09
$ 10.47
$ 14.67
$ 11.65
$ 23.24
$ 10.02
$ 13.72
F&D Costs per BOE 1,2,3,6
Including FDC
$ 19.63
$ 39.08
$ 24.85
$ 26.49
$ 20.98
$ 34.16
$ 23.34
$ 25.61
Excluding FDC
$ 14.89
$ 27.09
$ 10.47
$ 16.16
$ 16.42
$ 23.24
$ 10.02
$ 15.72
Recycle Ratio2,5,6
F&D (including FDC)
1.6
1.0
1.8
1.4
1.5
1.1
1.9
1.5
F&D (Excluding FDC)
2.7
1.4
4.3
2.8
2.4
1.6
4.5
2.8
Notes for table above:
(1)
Barrels of oil equivalent 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.
(2)
The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development capital generally will not reflect total finding and development costs related to reserve additions for that year.
(3)
The calculation of F&D and FD&A costs both includes or excludes, as labelled, the change in FDC required to bring proved undeveloped and developed reserves into production. The F&D or FD&A number is calculated by dividing the identified capital expenditures by applicable reserve additions including extensions, infills, revisions, acquisitions and disposals, and economic factors, after or before changes in FDC costs (as labelled).
(4)
Three-year average is calculated using three-year total capital costs and reserve additions on both a TP and TPP reserves on a weighted average basis.
(5)
Recycle ratio is defined as field netback per BOE divided by F&D costs on a per BOE basis. Field netback is a Non-IFRS Measure, see "Cautionary Statements." On a BOE basis, Bonterra's (unaudited) field netback used in the above calculations are as follows: 2024 - $28.34; 2023 - $37.01; 2022 - $44.93; Three year weighted average - $36.47.
(6)
"FD&A Cost", "F&D Cost", and "Recycle Ratio" do not have standardized meanings and therefore may not be comparable with the calculation of similar measures for other entities. See "Information Regarding Oil and Gas Disclosure" in this news release.
ABOUT BONTERRA
Bonterra Energy Corp. is a conventional oil and gas corporation forging a grounded path forward for Canadian energy. Operations include a large, concentrated land position in Alberta's Pembina Cardium, one of Canada's largest oil plays. Bonterra's liquids-weighted Cardium production provides a foundation for implementing a return of capital strategy over time, which is focused on generating long-term, sustainable growth and value creation for shareholders. Emerging Charlie Lake and Montney resource plays are expected to provide enhanced optionality and an expanded potential development runway for the future. Our shares are listed on the Toronto Stock Exchange under the symbol "BNE" and we invite stakeholders to follow us on LinkedIn and X (formerly Twitter) for ongoing updates and developments.
Use of Non-IFRS Financial Measures
In this release, the Company refers to "field netback" to analyze operating performance, which is not a standardized measure recognized under IFRS® and does not have a standardized meaning prescribed by IFRS. This measure is commonly utilized in the oil and gas industry and is considered informative by management, shareholders and analysts. This measure may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. The Company defines field netback as revenue and realized gain (loss) on risk management contracts minus royalties and production costs divided by total BOEs for the period.
Information Regarding Oil and Gas Disclosure
All amounts in this news release are stated in Canadian dollars unless otherwise specified. Bonterra's oil and gas reserves statement for the year ended December 31, 2024, which will include complete disclosure of its oil and gas reserves and other oil and gas information in accordance with NI 51-101, will be contained within its Annual Information Form which will be available on Bonterra's SEDAR profile at www.sedarplus.ca or on the Company's website on or before March 31, 2025. The recovery and reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. In relation to the disclosure of estimates for individual properties or subsets thereof, such estimates may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. The Company's belief that it will establish additional reserves over time with the conversion of probable undeveloped reserves into proved reserves is a forward-looking statement and is based on certain assumptions and is subject to certain risks, as discussed below under the heading "Forward-Looking Information".
This press release contains metrics commonly used in the oil and natural gas industry, such as "reserve life index", "recycle ratio", "finding and development costs", "finding and development recycle ratio", "finding, development and acquisition costs", and "field netbacks". Each of these metrics are determined by Bonterra as specifically set forth in this news release. These terms do not have standardized meanings or standardized methods of calculation and therefore may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Such metrics have been included to provide readers with additional information to evaluate the Company's performance, however, such metrics should not be unduly relied upon for investment or other purposes. Management uses these metrics for its own performance measurements and to provide readers with measures to compare Bonterra's performance over time.
Both F&D and FD&A costs take into account reserves revisions during the year on a per BOE basis. The aggregate of the costs incurred in the financial year and changes during that year in estimated FDC may not reflect total F&D costs related to reserves additions for that year. Finding and development costs both including and excluding acquisitions and dispositions have been presented in this press release because acquisitions and dispositions can have a significant impact on Bonterra's ongoing reserves replacement costs and excluding these amounts could result in an inaccurate portrayal of its cost structure.
Reserve life index is an index reflecting the theoretical production life of a property if the remaining reserves were to be produced out at current production rates. The index is calculated by dividing the reserves in the selected reserve category at a certain date by the annual production for the period. Recycle ratio is defined as field netback per BOE divided by F&D costs on a per BOE basis.
Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Bonterra's performance over time, however, such measures are not reliable indicators of the Company's future performance and future performance may not compare to the performance in previous periods. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.
Forward Looking Information
Certain statements contained in this release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this release includes, but is not limited to: estimates relating to reserves, future net revenue, future development capital and production; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital or maintain its syndicated bank facility; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
Frequently recurring terms
Bonterra uses the following frequently recurring terms in this press release: "bbl" refers to barrel; "NGL" refers to Natural gas liquids; "MCF" refers to thousand cubic feet; and "BOE" refers to barrels of oil equivalent. Disclosure provided herein in respect of a BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Numerical Amounts
The reporting and the functional currency of the Company is the Canadian dollar.
