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CALGARY, March 4, 2013 /CNW/ - Vermilion Energy Inc. ("Vermilion", the "Company", "We" or "Our") (VET - TSX) is pleased to announce summary 2012 year-end reserves and resource information. The estimates of reserves and resources and other oil and gas information contained in this news release has been estimated by GLJ Petroleum Consultants Ltd. ("GLJ") and has been prepared in accordance with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" of the Canadian Securities Administrators ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH"). For additional information about Vermilion, including Vermilion's statement of reserves data and other information in Form 51-101F1, please review the Company's Annual Information Form for the year ended December 31, 2012, to be filed on SEDAR at www.sedar.com on or before March 31, 2013.
Certain statements included or incorporated by reference in this news release may constitute forward looking statements or financial outlooks under applicable securities legislation. Such forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this annual information form may include, but are not limited to:
Such forward-looking statements or information are based on a number of assumptions all or any of which may prove to be incorrect. In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things:
Although the Company believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct. Financial outlooks are provided for the purpose of understanding the Company's financial strength and business objectives and the information may not be appropriate for other purposes. Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward looking statements or information. These risks and uncertainties include but are not limited to:
The forward-looking statements or information contained in this news release are made as of the date hereof and the Company 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 required by applicable securities laws.
RESERVES, FUTURE NET REVENUE AND OTHER OIL AND GAS INFORMATION
The following is a summary of the oil and natural gas reserves and the value of future net revenue of Vermilion as evaluated by GLJ, independent petroleum engineering consultants in Calgary in a report dated February 14, 2013 with an effective date of December 31, 2012 (the "GLJ Report"). The GLJ Report was prepared in accordance with National Instrument 51-101 and COGEH.
Reserves and other oil and gas information in this news release is effective December 31, 2012 unless otherwise stated.
All evaluations of future net production revenue set forth in the tables below are stated after overriding and lessor royalties, Crown royalties, freehold royalties, mineral taxes, direct lifting costs, normal allocated overhead and future capital investments, including abandonment and reclamation obligations. Future net production revenues estimated by the GLJ Report do not represent the fair market value of the reserves. Other assumptions relating to the costs, prices for future production and other matters are included in the GLJ Report. There is no assurance that the future price and cost assumptions used in the GLJ Report will prove accurate and variances could be material.
Reserves for Australia, Canada, France, Ireland and the Netherlands are established using deterministic methodology. Total proved reserves are established at the 90 percent probability (P90) level. There is a 90 percent probability that the actual reserves recovered will be equal to or greater than the P90 reserves. Total proved plus probable reserves are established at the 50 percent probability (P50) level. There is a 50 percent probability that the actual reserves recovered will be equal to or greater than the P50 reserves.
Estimates of reserves have been made assuming that development of each property, in respect of which estimates have been made, will occur without regard to the availability of funding required for that development.
With respect to finding and development costs, 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 costs generally will not reflect total finding and development costs related to reserve additions for that year.
Pricing used in the forecast price estimates is set forth in the table below and referenced in the notes to subsequent tables.
Table 1: Forecast Prices used in Estimates (8)
|Light and Medium Crude Oil||Crude Oil||
All forecast prices in Table 1 above provided by GLJ. For 2012, the price of Vermilion's natural gas in the Netherlands was based on pricing established by GasTerra, a state owned entity which purchases all natural gas produced by Vermilion in the Netherlands. For 2012, the natural gas price in the Netherlands was calculated using a trailing average of Dated Brent and the natural gas prices from European trading hubs. France natural gas production was benchmarked to National Balancing Point (UK). The benchmark price for Australia and France crude oil was Dated Brent. The benchmark price for Canadian crude oil was Edmonton Par and Canadian natural gas was priced against AECO. For the year ended December 31, 2012, the average realized sales prices before hedging were $117.03 per bbl (Australia) and $107.67 per bbl (France) for Brent-based crude oil, $82.84 per bbl for Canadian-based crude oil and NGLs, $9.81 per Mcf for European natural gas and $2.52 per Mcf for Canadian natural gas.
The following table summarizes the capital expenditures made by Vermilion on oil and natural gas properties for the year ended December 31, 2012:
Table 2: Capital Costs Incurred
(1) Includes costs of acquiring undeveloped lands.
The following table sets forth the reserve life index based on total proved and proved plus probable reserve and fourth quarter 2012 production of 36,265 boe/d.
Table 3: Reserve Life Index
|Commodity||Production||Reserve Life Index (years)|
|Oil and natural gas liquids (bbl/d)||24,875||7.1||11.2|
|Natural gas (mcf/d)||68,344||9.8||15.2|
|Oil Equivalent (boe/d)||36,265||8.0||12.5|
The following tables provide reserves data and a breakdown of future net revenue by component and production group using forecast prices and costs. For Canada, the tables following include Alberta gas cost allowance.
The following tables may not total due to rounding.
Table 4: Oil and Gas Reserves - Based on Forecast Prices and Costs (8)
|Light and Medium Oil||Heavy Oil||Natural Gas||Natural Gas Liquids||BOE|
|Gross (1)||Net (1)||Gross (1)||Net (1)||Gross (1)||Net (1)||Gross (1)||Net (1)||Gross||Net|
|Proved Developed Producing (2) (5)|
|Total Proved Developed Producing||50,746||47,179||17||16||88,190||81,453||2,393||1,597||67,855||62,368|
|Proved Developed Non-Producing (2) (6)|
|Total Proved Developed Non-Producing||1,151||1,054||-||-||22,860||22,253||184||143||5,145||4,906|
|Proved Undeveloped (2) (7)|
|Total Proved Undeveloped||9,062||8,157||-||-||132,901||130,170||1,051||866||32,263||30,717|
|Proved Plus Probable (2) (3)|
|Total Proved Plus Probable||96,136||88,484||20||19||377,984||362,521||5,713||4,188||164,867||153,111|
Table 5: Net Present Values of Future Net Revenue - Based on Forecast Prices and Costs (8)
|Before Deducting Future Income Taxes Discounted At||After Deducting Future Income Taxes Discounted At|
|Proved Developed Producing (2) (5)|