InPlay Oil Corp. ("InPlay" or the "Company") (TSX: IPO) is pleased to present the results of the Company's independent reserves evaluation (the "Sproule Report") prepared by Sproule Associates Ltd. ("Sproule") effective as of December 31, 2016 and an operations update.
In November 2016, InPlay completed a series of transformational transactions including the go-public reverse takeover (the "Arrangement") of Anderson Energy Inc., a "bought deal" equity financing for aggregate gross proceeds of $70.3 million and a significant asset acquisition in its core Pembina area (the "Asset Acquisition").
InPlay successfully executed its strategy in 2016 of assembling a light oil company with premier assets that can provide shareholders with top tier organic growth amongst light oil weighted peers. The Company's strategy was to build a sustainable light oil resource base backed by solid, predictable reserves with a strong balance sheet and supported by an inventory of high return quick payout drilling locations.
The InPlay team's efforts to date have resulted in proved developed producing, total proved and total proved plus probable reserve life indices of 5.7, 13.0 and 19.3 years respectively, with an estimated base 2017 proved developed producing decline of 21%. The Company is anticipating >20% per share organic production growth (>25% on a debt adjusted basis) forecasted for the month of December 2017 over December 2016 and debt to cash flow of 1.0 times or less. Also, we have put together a large inventory of drilling locations with payouts estimated at less than one year.
2016 Reserves Highlights:
Since the completion of the Arrangement and related transactions on November 7, 2016, the Company has drilled 10 (8.0 net) light oil Cardium horizontal wells. The drilling program was completed on February 10, 2017, of which 2 (1.9 net) wells came on production in late 2016 and 3 (3.0 net) wells came on production in the middle of February, 2017. There are currently 5 (3.1 net) wells remaining to be completed, equipped and tied in for production. We currently expect these wells will be completed and brought on production through March and April, and even with delays in completions due to high industry activity, we continue to be on target with our production guidance of 4,000 - 4,200 boed average for 2017 and 4,300 - 4,500 boed 2017 exit.
Early results from our new wells, which includes 3 net wells having only one month of production and still in the clean-up stage, are exceeding internal forecasts. These new wells coupled with the low decline asset base has current production, based on field estimates, at approximately 4,100 boed (65% light oil and liquids). The Company anticipates drilling an additional 8 net Cardium horizontal wells prior to yearend, with 7 of the wells slated for the second half of 2017.
We are pleased with the results that we have seen from the assets acquired in the fourth quarter of 2016 both on the base production and the drilling results to date and we look forward to further optimization and development of these assets. InPlay is well positioned financially to support our 2017 developmental capital program. Low debt levels, high netbacks and a solid suite of commodity hedges leaves us well positioned to continue to develop our asset base in the current volatile commodity price environment. Efforts will continue to be focused on operational excellence in order to execute a solid development plan over the entire asset base in a manner that should result in meaningful per share growth to InPlay shareholders.
Additional corporate information can be found on our website at www.inplayoil.com or on www.sedar.com.
SOURCE: InPlay Oil Corp.
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