CALGARY, March 9 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX: WAV) achieved outstanding reserves growth in 2008 and is pleased to
provide its 2008 reserves information (NI 51-101 compliant). Breaker grew its
Proved plus Probable reserves at all six of its major properties, underlining
the value and continued growth of Breaker's entire portfolio. The Company is
also pleased to provide updated production results from its highly successful
first horizontal multi-frac well at its liquids-rich Doig/Montney gas resource
play in Fireweed, British Columbia.
As Breaker plans to announce its audited 2008 financial statements after
the close of the market on March 18, 2009, certain financial estimates have
been made herein to facilitate discussion of its 2008 capital program. Readers
are advised that these financial estimates are subject to audit and may be
revised as necessary.
Highlights
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Breaker grew its reserves in 2008 by 51 percent to 27.2 million boe. The
Company achieved strong per share reserves growth on a cost effective basis.
Through maintaining fiscal discipline and selecting quality capital investment
opportunities, Breaker is pleased to report the following results for 2008:
Proved plus Probable Reserves Replacement Ratio 5.2 times
Proved plus Probable Reserve Life Index (est. Q4/08
average production 6,702 boe/d) 11.1 years
Growth in Proved plus Probable reserves per
fully diluted share 43%
Growth in Proved reserves per fully diluted share 36%
FD&A Proved (without future development capital (FDC)) $24.53/boe
FD&A Proved plus Probable (without FDC) $16.10/boe
FD&A Proved (with change in FDC discounted at 10%) $29.74/boe
FD&A Proved plus Probable (with change in FDC
discounted at 10%) $20.26/boe
Breaker's netback for 2008 was $47.36/boe (unaudited). Using this
netback the following recycle ratios are calculated:
For FD&A without change in FDC (Proved plus Probable) 2.9
For FD&A with change in FDC, discounted at 10%
(Proved plus Probable) 2.3
Estimated Net Asset Value (NAV) per fully diluted
share BT10% (forecast pricing) $8.35/share
The results presented above are based on unaudited, estimated total
capital expenditures for 2008 of $183.6 million and unaudited, estimated 2008
production totaling 2,211 mboe or an average of 6,041 boe/d, and forecast
pricing (Sproule December 31, 2008).
Breaker 2008 Reserve Information
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In accordance with National Instrument 51-101 - Standards of Disclosure
for Oil and Gas Activities (NI 51-101), Sproule Associates Limited (Sproule)
prepared the Breaker Sproule Report. This report evaluated, as at December 31,
2008, 100 percent of Breaker's oil, natural gas, and natural gas liquids
reserves.
The tables below disclose in the aggregate, the Corporation's gross and
net proved and proved plus probable reserves and Net Present Value (NPV) as
estimated in the Breaker Sproule Report. These estimates were calculated using
forecast prices and costs.
"Forecast prices and costs" means future prices and costs used by Sproule
in the Sproule Report that are generally accepted as being a reasonable
outlook of the future, or fixed or currently determinable future prices or
costs to which the Corporation is bound.
"Gross" reserves equate to those reserves that are referred to as
"Company Gross" reserves by the Canadian Securities Administrators (CSA) in NI
51-101. Gross Reserves are Company gross reserves, which are the Company's
working interest (operating or non-operating) share before deduction of
royalties and without including any royalty interests of the Company.
"Net After Royalty" reserves are the Company's working interest
(operating or non-operating) share after deduction of royalty obligations plus
the Company's royalty interests in reserves.
The net present value of future net revenue attributable to Breaker's
reserves is stated without provision for interest costs and general and
administrative costs, but after providing for estimated royalties, production
costs, development costs, other income, future capital expenditures, and well
abandonment costs for only those wells assigned reserves by Sproule. It should
not be assumed that the undiscounted or discounted net present value of future
net revenue attributable to Breaker's reserves estimated by Sproule represent
the fair market value of those reserves. 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 revenue for all properties, due
to effects of aggregations. Other assumptions and qualifications relating to
costs, prices and future production and other matters are summarized herein.
The recovery and reserve estimates of Breaker's oil, natural gas, and NGL
reserves provided herein are estimates only and there is no guarantee that the
estimated reserves will be recovered.
